Reform's Bright Side: You Get to Reinvent How Care is Delivered

You've got a lot of re-engineering to do. The Patient Protection and Affordable Care Act promises nothing less than a tectonic shift in the way your organization is paid and otherwise incented, whether you lead a health plan, physician practice, hospital, or health system. It's not hyperbole to say that survival is on the line for many such organizations.

Meanwhile, you get to soldier on under a highly regulated current system that essentially pays you per unit of service, with precious little of the equation connected to quality. Your payer mix is getting ready to change, and not for the better it appears, in many cases.

One only needs to look at the Massachusetts experiment with near-universal healthcare for a road map as to how things can go wrong when such a large number of people instantly get health insurance and overrun an already taxed primary care system. And oh yeah, that state's insurance exchange, meant to manage the risk of bringing so many uninsured under the umbrella, is hemorrhaging money, thanks mainly to political cowardice relating to penalties for not meeting the individual insurance coverage mandate.

Bricks and mortar expansion to meet this expected new patient demand, depending on what form it takes, is expensive, and it takes years to come online from the planning stage to construction. Meanwhile, more attention will be paid—and less money, too—for outcomes that don't reach or surpass some minimum standards, many of which are yet to be written.

And on top of all that, 20 million people will still be uninsured in this country (mainly illegal immigrants and a few other small groups) even when the major insurance provisions in PPACA go into effect. Of course, that group's lack of insurance doesn't mean you don't have to incur the expense of treating them, like always.

But despite all these storm clouds on the horizon, there is a silver lining. Healthcare is about to find out, as so many other industries have, that offering a quality product or service at a competitive cost means your services will always be in demand, and that eventually, you'll be paid fairly for them.

As I talk to senior leaders across the country during the course of my job, that's the positive attitude on which the overwhelming majority of my sources seem to be leaning. Color me surprised as I've encountered this attitude time and again. I've been conditioned, covering healthcare for a decade, to (understandably) hearing wailing and gnashing of teeth by the government regulation change du jour. But instead of focusing on the negative, many CEOs are seeing the new normal as an opportunity, as befits leaders' generally optimistic personalities.

Chris Borr, as the vice president of marketing for McKesson, one of the industry's largest IT companies, hears frequently from his colleagues about individual stories of innovation that are still in the early stages of execution.

For example, while he hasn't seen any really bold moves to address the accountable care organization concept central to PPACA, he sees opportunities for innovative healthcare leadership to define those organizations, while regulators provide a framework in which hospitals, health systems, health plans and physician practices fill in the blanks. Many organizations are beginning to debate what an accountable care organization actually is.

"There's a myriad of structures that it could take and it's still a definition that's waiting to be written," says Borr. "That's an opportunity in many respects. The government doesn't have a good track record in defining or prescribing how care should be delivered, but they do have a good record on setting minimum expectations that allow the market to figure it out."

Borr's not overly concerned.

"There's no alarm with [ACOs] that they aren't tightly defined," he says. "That's actually a benefit."

The other thing that's glaringly apparent is the level of concern in being able to place large bets for their orgs with very little information to back up the decisions on where to place those bets.