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Straight Talk
A weekly update from management on the issues that matter most.

Jul 5, 2018
A momentous shift in the delivery of healthcare is today’s reality. As consumerism, transparency, interoperability, profit margin squeeze, and the quest for quality all accelerate, the existing legacy model will erode. There is hope.

Our nation had almost 7,000 hospitals at the peak.  We now have 5,534 according to the American Hospital Association’s most recent count.  Many believe that the number will continue to drop over the next five to ten years.  We will see both continuing consolidation in an effort to maximize efficiency/effectiveness and accelerating financial stress.  However, Bigger Isn’t Always Better written by Robert Tomasko has a notable pertinent theme; no one anticipates increased reimbursement.  

 

Physician independence has also changed as the percent of physicians employed by hospitals and healthcare systems has increased from 25% in 2012 to 42% in 2016 and continues to grow.  Adding to the employment roles for physicians are those employed by other groups including insurance companies.  Over 50% of physicians are employed today. 

 

Non-physician clinicians—such as advanced registered nurse practitioners (ARNPs), physician assistants (PAs), and certified registered nurse-anesthesiologists (CRNAs)—will continue to grow in numbers and responsibilities.  The Association of American Medical Colleges recently projected that the supply of physicians will increase by only 0.5% per year between 2016 and 2030 according to a recent “Perspective” in the New England Journal of Medicine.  However, ARNPs and PAs are anticipated to grow at 6.8% and 4.3%, respectively.  The training time and cost for non-physician clinicians is a fraction of that needed for a physician and, in general, the current physician workforce is much closer to retirement.  Collaborative care teams will become standard best practices and have already been shown not to increase costs or threaten quality of care.

 

Traditionally, controlling costs has been an imperative.  The government—federal, state, and local—accounted for 46% of total spending; employers and private insurance picked up another 27%.  Drug prices and hospital costs have been the primary drivers of increases with both now being scrutinized for cost transparency (e.g. whether a drug is priced according production expense or what the market will bear), increased efficiency, and excessive profitability. 

 

Other less traditional entities are entering healthcare with a current example of Amazon’s buying PillPack for $1 billion dollars.  Recently, the following have partnered with others most likely to follow: CVS and Aetna; Amazon, Berkshire-Hathaway, and JP Morgan; Walmart and Humana; United Healthcare’s Optum and DaVita Medical Group; Cigna Corp. and Express Scripts; Apple and thirteen healthcare institutions.

 

What is missing?  Prevention.  How can we decrease the need for healthcare?  The Blue Zones Project, a comprehensive, holistic, planned approach to community health and wellness that recruits a critical mass of community institutions, individuals, and government leaders to drive measurable improvement in the key metrics that affect health care costs (especially those related to chronic illness), has already demonstrated success.  The Project is premised on extensive evidence-based research and fifteen years of validated results.  To date, the Blue Zones Project has been rolled out in forty-three areas, nine states, and three million people around America; the results have been impressive.  While many institutions can drive the Blue Zones model, healthcare providers often play a critical role in helping everyone live a longer, happier, and healthier life. 

 

P.S.  DO YOU HAVE A COLLEAGUE OR FRIEND WHO WOULD BE INTERESTED IN UPDATES?  Please enter their email address at nchmd.org/straighttalk, and we will add them to our complimentary mailing list.  

AUTHOR

Allen Weiss, M.D.

President and CEO

You may contact Dr. Allen Weiss and The NCH Healthcare System by clicking here.