Some Experts Suggest Decentralized Health System That Focuses On A Continuum Of Care

Main Category: Primary Care / General Practice
Also Included In: Public Health;  Health Insurance / Medical Insurance
Article Date: 03 Feb 2009 - 4:00 PDT

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The New York Times on Sunday examined some experts' ideas about changes to the U.S. health system.

According to the Times, the "century-old business models" used by hospitals and physicians focus on treatments rather than wellness promotion. Hospitals and physicians often have "no financial incentive to keep patients healthy," the Times reports. Hospitals make money by filling beds, and doctors make money from patients who have repeat visits.

Steve Wunker -- a senior partner at Innosight, a consulting firm -- said, "The business models were all created decades ago, and acute disease drove those costs at the time. Most businesses in this industry are looking at their business model as entirely immutable. They're looking for innovative offerings that fit this frozen model."

Clayton Christensen, a professor at the Harvard Business School and author of "The Innovator's Prescription," said, "Health care hasn't become affordable because it hasn't yet gone through disruptive decentralization." In 2003, Christensen introduced the concept of "disruptive innovation," which is "an unexpected new offering that through price or quality improvements turns a market on its head," the Times reports.

According to Christensen and his co-authors, the current health system places the "financial interests of hospitals and doctors at the center" and treats routine illnesses with the "same intensive and costly specialized care that more complicated cases require," the Times reports. Decentralizing the system could provide patients with a continuum of care, rather than focusing on crises, the Times reports.

Alain Enthoven -- an economist at Stanford University who has studied the U.S. health care system for more than three decades -- said that integrated systems "are the disruptive innovation we need to turn loose on the rest of America." In a recent report for the Committee for Economic Development, Enthoven wrote that he supports giving patients the option of either traditional fee-for-service plans or cheaper integrated systems and then providing them with the difference in premium costs. He said, "Medicine is a complicated team sport," adding, "It takes an integrated system to keep the patient at the center of it."

The Geisinger Health System, Intermountain Healthcare, Kaiser Permanente, the Mayo Clinic and the Veterans Health Administration each have set up fixed-fee integrated systems. Under the systems, patients contribute monthly payments and small copayments "in exchange for a promise of cradle-to-grave health care," the Times reports. Lower-cost facilities handle routine treatment, while higher-cost facilities and specialists take care of more complicated cases.

Uwe Reinhardt, a Princeton University economist, said that such systems provide a continuum of care that allows providers to follow patients throughout their care, to know what treatment a patient has received and to avoid duplicating tests or prescribing competing medications. He said that Kaiser Permanente's system "is much cheaper than pay-for-service systems, because they have absolutely no incentive to overtreat you, but they have every incentive to keep you healthy." He added, "Kaiser still makes mistakes -- any large system does -- but their facilities always come out ahead in every service quality survey I've reviewed" (Rae-Dupree, New York Times, 2/1).

Please note: The Kaiser Family Foundation is not associated with the Kaiser Foundation Health Plan, Kaiser Permanente or Kaiser Industries.

Reprinted with kind permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation.

© 2009 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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