The American health care industry has fallen down an “Alice in Wonderland” rabbit hole, and awakened in the strangest, wildest time in its history. Hospitals are spending millions of dollars trying to keep patients from being admitted to them, and health systems are becoming insurance companies. In turn, insurance companies are buying hospitals and physician groups so they can take care of patients and thereby, perhaps, finally control the costs of patient care. The way things are going, McDonald’s will soon be treating my high cholesterol while I wait for my fries.
These are times of epic change for America’s biggest industry, all the result of America’s decision it can no longer afford the industry we built into its biggest. These change are far more fundamental than the managed care frenzy of the ’90s. The health care industry is Detroit’s Big Three car makers with Japan about to eat our lunch, the record industry about to get warped by digital music, the airline industry about to fly into the mountainside of deregulation, and the book industry reading a horror novel titled “Amazon and Kindle Eat You Alive.”
Like those industries, traditional business models on which most of the industry is based are being torn apart. The piecework model of getting paid more money to provide more care — the basic model for almost every doctor, hospital and other provider of health care in America for more than a hundred years — is slowly dying. What will replace it remains unclear, but will probably involve us all getting paid more if we keep patients healthier and spend less patient money but more effectively. The problem is, most of us managing the industry don’t yet know how to make enough money in that new model to keep our patient care businesses viable. Every step we take to build for that new model costs us money we don’t have, may reduce what we get paid during the change, and feels like trying to live underwater before we grow gills.
As part of this massive retooling, where you get your health care is being turned on its head. CVS pharmacies are now providing free health screenings at some of their stores, and you can shop for urgent care at Walmart. Big employers are putting family physician offices in their buildings for their employees. Some physicians are now providing Internet and email-based “e-visits” to patients with simple medical problems that can be treated without the inconvenience of the call-your-doctor-and-wait-two-weeks-to-be-seen model of care. Most of the care hospitals provide now is outside the traditional hospital room with its two patient beds separated by a curtain.
No part of the industry will be more affected than hospitals, which have been the epicenters of the industry for the last 70 years and are now becoming its cost centers. More and more care is moving away from them, more and more money is being invested trying to keep people out of them, and the locus of control in health care is moving away from them. Giants of the hospital industry are making dramatic changes to adopt; the Cleveland Clinic — perhaps the most successful hospital company in America — is going to cut its workforce by thousands and stop paying doctors more money just to see more patients. It is investing millions of dollars in approaches to patient care substantially different from those that have been its core businesses; on a smaller scale, so is almost every other hospital in America.
As a result of those changes in hospitals, many health care experts are predicting that in another 10 years most American hospitals will be owned by a small number of big health care systems, and that the traditional small community hospital will be part of a larger system or part of history.
Those unhappy with the changes will be quick to blame so-called Obama-care, the president’s health care reform law. But Americans made this rabbit hole by finally saying enough is enough, we are not going to commit financial suicide as a country by killing ourselves with unaffordable health care. We have told the health care industry: “Don’t come out of it until you have rebuilt yourself into something effective and affordable.” And the industry will, whether it wants to or not; were Rip Van Winkle to fall asleep today, he would not recognize the American health care system he will awaken to in 20 years.
Erik Steele is the former chief medical officer of Eastern Maine Healthcare Systems. He now works at Summa Health System in Akron, Ohio.