Can things keep going the way they’ve been going in the healthcare world?
Health expenditures edged towards $2.6 billion in 2010, and though they’re rising more slowly these days, the only way is still up. But with more and more demand for reductions in cost, business models are coming under fire as they never have before.
A new survey of 200 senior executives at leading U.S. healthcare systems, health plans and pharmaceutical organizations has found that most agree their current business model “was somewhat sustainable over the next five years,” while a more depressing 20 to 27 percent of respondents in each group said current business models were either not very or not at all sustainable over the next five years, according to a statement.
The survey was conducted by KPMG LLP, the U.S. audit, tax and advisory firm.
“The findings really underscore the key question of whether or not any organization can be both committed to non-volume-based care economics while at the same time working to sustain a volume-driven reimbursement status quo,” said Ed Giniat, national sector leader, KPMG healthcare & pharmaceuticals, in the press release. “The institutional schizophrenia that emerges will be challenging to manage at best. Going forward, the winners—whether health plans, healthcare systems, life science companies, or other organizations—will be defined by their leadership in recognizing the necessity of change and then planning and executing effective strategies based on this recognition.”
And change for the healthcare world is certainly in the works. Retail clinics, monitors that track patients remotely for chronic diseases such as heart failure and diabetes, and tablets that let doctors stay in touch online at all times (not to mention the new health insurance exchanges and accountable care organizations or ACOs), all act as a part of the healthcare reform, redesigning – and redefining – the way medicine is practiced today.
The survey also found that, while most executives stood together on their current business models being at least somewhat sustainable, “many provider (65 percent) and health plan (41 percent) executives do expect major business model changes in the next five years.”
Interestingly, most pharmaceutical executives said they expect only moderate changes, according to the survey, though none would discount the changes ACOs will bring to healthcare, including slashing fee-for-service and replacing it with lump sum payments based on outcomes and quality of care.
Nearly half of providers and health plans, and a third of pharmaceutical executives are in favor of “a more rapid progression to some type of value-based payment.” But most feel that any transition will be accomplished gradually, not dramatically, “with less than a quarter of all provider reimbursement fashioned as some type of value-based payment,” according to the findings.
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Edited by
Allison Boccamazzo
