Monday, February 21, 2011
The Health Care Bubble
10:39 AM | Posted by
Matthew
OK, let me just get this out of the way now: I am not a big fan of Orlando. Here's my theory on Florida: the state’s biggest selling point is that there are two coasts. So why would anyone choose to live in the middle of the state?
That said, I'm happy to be here enjoying sunshine and 70 degree temps (well, I can see the sunshine when walking through the convention center concourse). It's been a long winter up in Chicago!
My week-long visit to Orlando actually started on Sunday with the CHIME's CIO Forum. About 530 CIOs, vendors and other senior technology officials were on hand to network, get an overview of health information exchange and hear a sobering diagnosis of the nation’s health care market. Nate Kaufman, managing director of Kaufman Strategic Advisors, delivered an opening keynote and he did not pull any punches. He described the stark realities of the country's economic situation and how that will impact health providers: government payments will continue to shrink, the ability to cost shift to private insurers is disappearing and greater accountability for outcomes is coming your way.
"We are in a health care bubble," he said, explaining that a bubble is when you have exceptionally high market prices that can't be supported by fundamental economics. Now, I'm not an economist, but I guess that mean prices far exceed value. We saw it in IT and housing and we know what happened to those sectors and, more importantly, the overall economy. He said providers need to start planning now for the health care bubble to burst. That means avoiding some deadly sins: absence of alignment around a shared mission and vision, cognitive dissonance and institutional self-deception.
In other words, it's time to start aligning your goals/mission/vision with physicians and other providers and be sure you are equipped both culturally and operationally to respond to changing market demands. The Affordable Care Act and meaningful use are, at their core, about adding more accountability to the quality of care. That pressure is not going away.
"Winners," Kaufman said, "will be high-functioning, digitally connected, physician-lead, evidence-based, and patient-centered organizations."
During the lunch break the folks at my table were pretty unanimous in their opinion that while stark, Kaufman's speech painted a realistic picture of things to come and was something they said they needed to hear.
That said, I'm happy to be here enjoying sunshine and 70 degree temps (well, I can see the sunshine when walking through the convention center concourse). It's been a long winter up in Chicago!
My week-long visit to Orlando actually started on Sunday with the CHIME's CIO Forum. About 530 CIOs, vendors and other senior technology officials were on hand to network, get an overview of health information exchange and hear a sobering diagnosis of the nation’s health care market. Nate Kaufman, managing director of Kaufman Strategic Advisors, delivered an opening keynote and he did not pull any punches. He described the stark realities of the country's economic situation and how that will impact health providers: government payments will continue to shrink, the ability to cost shift to private insurers is disappearing and greater accountability for outcomes is coming your way.
"We are in a health care bubble," he said, explaining that a bubble is when you have exceptionally high market prices that can't be supported by fundamental economics. Now, I'm not an economist, but I guess that mean prices far exceed value. We saw it in IT and housing and we know what happened to those sectors and, more importantly, the overall economy. He said providers need to start planning now for the health care bubble to burst. That means avoiding some deadly sins: absence of alignment around a shared mission and vision, cognitive dissonance and institutional self-deception.
In other words, it's time to start aligning your goals/mission/vision with physicians and other providers and be sure you are equipped both culturally and operationally to respond to changing market demands. The Affordable Care Act and meaningful use are, at their core, about adding more accountability to the quality of care. That pressure is not going away.
"Winners," Kaufman said, "will be high-functioning, digitally connected, physician-lead, evidence-based, and patient-centered organizations."
During the lunch break the folks at my table were pretty unanimous in their opinion that while stark, Kaufman's speech painted a realistic picture of things to come and was something they said they needed to hear.
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