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Disruptive Healthcare Innovations Trump SCOTUS Worries

Philip Betbeze, for HealthLeaders Media, June 8, 2012

Those changes require huge capital investments that can only be recouped over time. In the case of disruptive innovation, by definition, time is not on the incumbent's side. One of the most intriguing disruptors evident in the direct primary care model is the ditching of the third-party payer.

One key to most accountable care strategies involves hospital-centric organizations building out primary care networks, often with employed physicians. They realize not only that revenue growth will be constrained on the hospital side, but that in addition to diversifying the revenue stream, primary care practices will help close the loop on the accountability missing from today's predominant fee-for-service payment system.

You hear CEOs talk a lot in terms of gambling metaphors these days. As in, where are they placing their bets to ensure long-term survival and success? Accountable care strategies are all different, but even if not fully formed or built out, they require huge investments in facilities, acquisitions, and manpower in realization that payers are moving quickly toward reimbursing them not on how many services the patient consumes, but how well the system keeps the patient healthy.

Yet no matter how innovative such strategies are, they depend on the third-party payment system.

If that system can be effectively circumvented on a large scale, many health systems worry they won't be able to compete. They may be right. Direct primary care is only one of  many disruptive innovations that might dramatically decrease the competitiveness of hospitals and health systems. But apparently, it's of much greater worry than the decision the Supreme Court is about to make.

See Also:

Disruption, Not Destruction Will Save Medicine


Philip Betbeze is senior leadership editor with HealthLeaders Media.
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