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Healthcare Business Models Clash with Reforms

John Commins, for HealthLeaders Media, August 29, 2012

"Effectively, what the health systems are saying is 'we know to retain our traditional profitability we have to maintain or increase commercial reimbursement rates.' Four out of five say 'we have the market power to do that,'" he says. "How can you map out that against the results from the health plan perspective and what the employers are saying in the marketplace? You cannot connect the dots."

"Looking in the mirror is very difficult because the real work is around clinical integration, driving value out of technology, and thinking about sites of service," Benton says.

Even with suspect business models in place, KPMG found that 47% of health system executives and 49% health plan executives said they would prefer to see a rapid implementation of value-based payment models over the next five years. In roughly the same percentages, however, those executives believe that the process will be more incremental.

"They desire rapid integration even though they may not be sustained after five years in terms of the dollars," Benton says. "Because of what we think is the lack of sustainability in the U.S. economy in terms of overall spending we still think the drivers are in place to move us more quickly to something that is more economically sustainable and that will be some kind of value based purchasing."

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