Thoughts on Reform: When ACOs, Vectors, and Spin Collide

Michael Silver, PhD, Vice President, Sg2, for HealthLeaders Media, June 16, 2011

Health care reform has passed the point of no return. One way or another (or more likely, multiple different ways), it will evolve dramatically over this decade, although the final script probably has yet to be written. Reform will continue to follow two separate but "attached-at-the-hip" paths—payment reform and care delivery redesign. The former is largely driven by national and state politics and commercial interests, while the latter will be determined largely by provider organizations in response to various quality, smart growth, Systems of CARE (Clinical Alignment and Resource Effectiveness) and cost reduction initiatives. The sad reality is that you can't cut your way to greatness. Unless care delivery redesign advances management significantly, we face a decade of payment cuts and inefficient health care delivery.

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Personally, I view health care reform as a complex vector process in which a wide range of local, regional and national forces act on the players in the health care drama—consumers, employers, providers and payers. Some of these major vectors include population demographics, the economy, new technologies, diseases and payment models. It's more than a coincidence that these are the same health care modeling vectors that Sg2 has employed for almost a decade to drive its forecasting engine. These vectors will interact nationally and regionally to produce different outcomes. They also comprise various sub-vectors such as bundled payment and accountable care organizations (ACOs).


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