Guess Who’s Coming For Dinner?

dinnerBy William Rusteberg

Today we find ourselves in a dynamic and somewhat unpredictable market, particularly the political dimensions as government interference in health care continues to evolve. However, we do know, to a large degree, how we will be affected and what we must do to survive in each of our individual and unique places in health care.

We are seeing the initial effects of the Affordable Care Act on the market, which is increased competition and innovation. There is no doubt that everyone should agree that competition and innovation are positive indications.

It is hard to imagine a more competitive time that we are entering today.

The  winners of the fee-for-service game have been those who have historically been most adept at maximizing billing codes, which is what the system has rewarded.

What we are seeing now is a shift to value and outcomes. A premium will be placed on those organizations most able to deliver quality care on a transparent, value based cost.

Broadly speaking, health care is going to be subject to deflationary pressure as private and public sector budgets can no longer sustain the current level of spending, let alone future health care inflation.

Lower overhead models will demonstrate that lower costs does not  have to mean lower profits, or lower positive health outcomes. Healthcare providers will necessarily learn how to become more efficient, while those who don’t may not survive.

There are over 170 million Americans insured through employer sponsored health plans today. These employers, fearing the affects of the Affordable Care Act on their bottom line, are concerned and desperate for answers and solutions to ever increasing health care costs. To more and more of them health care costs can mean the difference between profit and loss.

Acceptance to change, historically, has been slow among employers who have traditionally relied on third party intermediaries to guide them through the complicated maze of our health care system.

But that is changing, and we are seeing the results in certain markets across the United States, particularly in Texas where I am from.

We are seeing a movement away from Managed Care Organizations (MCO) by some employers, and to a lesser degree, by health care providers, particularly health care professionals.

Employers are questioning contracts they cannot see but upon which their health costs are tagged. And some are entering new and unchartered waters with good success.

Some medical professionals have been, for a long time, concerned about what the perceive as adversarial contracts, dwindling reimbursements and practice restrictions and are acting to preserve their self interests and business through fundamental change, which many believe is long overdue.

A perfect storm is brewing. Neither employers nor medical care givers are satisfied with the status quo, yet sense there are alternatives worth exploring. What we have here are willing partners waiting for an invitation to dinner. But it will be dinner for two, not three.