If the furious debate around the state of healthcare in the US has led to any consensus, it’s that the system should be delivering better quality for less cost than it does. The truth is that our healthcare system is a sprawling mix of competing interests in which those of the patient are valued least. Too much discussion has devolved to simplistic scapegoating, and too few comprehensive, constructive solutions have been offered. It’s time for a fresh vision.
In straightforward language, Healthcare at a Turning Point: A Roadmap for Change outlines a new market-based business model that aligns industry financing mechanisms with the goals of prevention, improved quality, and reduced costs. Drawing on more than 25 years of cross-industry consulting experience, the authors:
For all the uncertainty in the current environment, there is also a rare opportunity to fundamentally redefine who wins in this market. Healthcare at a Turning Point provides guidance to executives ready for that contest as well as a roadmap for change.
This book is a compelling and thought provoking analysis of critical choices facing health care leaders. It offers a detailed prescription for stakeholders on how to proceed and how to implement genuine accountability at each stage of care management. … Numerof and Abrams offer a road map for sustainable market reform with remarkable clarity and vision.
—Book review byPeter Boland, PhD, appearing in The Journal of Ambulatory Care Management, Vol. 37, No. 1, pp. 38–41
Everyone complains about the state of healthcare in this country—patients feel uninformed, mistrustful and lost; clinicians and hospitals are frustrated in their efforts to improve the quality of care while meeting demands for lower costs; employers are burdened with the rising expense of employee health insurance; payers who provide the coverage are pushing for greater evidence before approving reimbursement for new drugs, technologies, procedures and tests; the medical product industry is struggling under the weight of increasing costs, longer development timeframes, shifting regulatory requirements and resistance from the other stakeholders to pay for new products; and politicians and state and federal government agencies are mandating a patchwork of fixes that seem to only make things worse. What we have lacked are tangible solutions that can actually work—until now.
Rita Numerof and Michael Abrams in their new book, Health Care at a Turning Point: A Roadmap for Change have offered a fresh look at the current state of healthcare in America, providing a detailed diagnostic assessment of what’s wrong, and importantly offer a comprehensive strategy to fix the problems. They begin with a vision of what a viable future state could look like in 10 years for providing affordable, accessible healthcare that promotes innovation in business models, products and services. Numerof and Abrams identify clearly and objectively the obstacles that must be overcome and gaps that must be closed by each of the important participants in the healthcare ecosystem, and then as the book's title implies, they deliver a roadmap, which is not only plausible, but if followed, will undoubtedly succeed in getting all of us there.
—Harlan F. Weisman, M.D., Former Chief Scientific and Technology Officer, Medical Devices and Diagnostics, Johnson & Johnson
Numerof and Abrams have crafted a thoughtful, and often provocative, analysis of the challenges and opportunities facing the healthcare industry today. At its heart is a clarion call for the sector to become much more patient and consumer-centric -- before their existing business models become obsolete.
—Paul Howard, Director and Senior Fellow, Center for Medical Progress, Manhattan Institute for Policy Research
A pair of strategic management consultants intelligently scrutinize America’s healthcare industry. … The authors’ blueprint for healthcare redesign is impressively conceived yet decidedly business-minded. Chapters defining their proposed remedies emphasize a market-based approach that objects to recent legislation and ideas of federally financed accountable care organizations (ACOs) while promoting models of bundled payment systems in which services are funded through a fixed-price schedule. … they offer fresh, clear approaches to restructuring the healthcare system and place appropriate emphasis on the fostering of informed, accountable consumers. … Numerof and Abrams’ ambitious study succeeds in illuminating problems within the multifaceted system … . An elucidating, relevant discourse on the precarious future of medical care.
—Kirkus Reviews, August 2012
The authors present thought-provoking ideas for the 'disruptive innovation' needed to uncover pragmatic solutions for our country's healthcare delivery system. … this suggested blueprint for market-based action is a must-read for all sides of the healthcare reform debate.
—Marc Boutin, Executive Vice President & Chief Operating Officer, National Health Council
Everyone agrees that the American healthcare system needs to change, but there is little agreement about how it should change. Abrams and Numerof paint a picture of how healthcare could look in an ideal future, and offer to manufacturers, payers, and providers a way to get there. Examining the healthcare system today, changes already taking place in attitudes towards innovation and medical education, … they show how the key players in healthcare must change their thinking to survive. … The main, and certainly provocative, message: if we move to a value-based system based on patient choice, rather than a cost-based system that assumes one size fits all, the consumer of health care is the ultimate beneficiary.
The book will stimulate the thinking of industry across functions, and should be read not only by management but by R&D, Strategic Planning, and Sales. Sections on the need to form partnerships and alliances can change the way industry, payers, and providers think about each other. By examining the four forces they see as dominating our healthcare environment today, namely changes in the regulatory environment, a changing competitive landscape, shifting technology, and changing market expectations, Abrams and Numerof have indeed provided an insightful guide to how the industry needs to change its strategic thinking.
—David L. Horwitz, MD, PhD, FACP, Chief Medical Officer, Johnson & Johnson Diabetes Institute
Here it is in Healthcare at a Turning Point healthcare must restore control and accountability for intimate, personal decisions to each of us as our own consumer. No one else can define our quality-value-price equation, and discipline our providers … Such is the economics, humanity, history, and even politic of western innovation…it is time for the Renaissance of those principles, just as articulated here in Healthcare at a Turning Point.
—Steve Bonner, President and Chief Executive Officer, Cancer Treatment Centers of America®
Numerof and Abrams have conducted a thorough analysis of the implications of market and non-market forces on all players in the health industry -- carriers, care providers, governments, consumers and employers. They have hit the nail on the head that it will take disruptive innovation and a collaborative approach across all these stakeholders to drive solutions to the fundamental problems of high cost and poor quality in health care.
I appreciate that Numerof and Abrams focus in on three major principles: 1.) Rethink the customer: It’s really the consumer, the end-user of health care services. The consumer needs to be at the center of the work that we are undertaking. It is imperative that we provide them transparency to cost, quality and value. 2.) Watch out for non-traditional competitors: There are many other industries which have been historically very close to the consumer. The players in our industry are changing, and all of those who serve the consumer need to rapidly evolve ourselves in order to differentiate and succeed. 3.) Segment care providers: We need to apply the discipline of market segmentation to our relationships with care providers. That is, we cannot assume that a one-size-fits-all approach on paying for value or outcome will succeed with each and every physician or hospital. Rather, we must segment our networks and identify which care providers are most likely to succeed in a partnership to reform payment in a particular way, work with them closely and then allow that success to breed other success in the market place.
—Elena McFann, VP Network Strategy and Implementation, UnitedHealthcare
For every professional engaged in the financing and delivery of medical care, this book is essential. Like it or not, sparked by the renewed debate over the controversial Affordable Care Act, we find ourselves in the midst of a major transformation in the health care sector of the economy. The convergence of biomedical breakthroughs, new medical technologies, new organizational structures is upon us. But the authors got it right: change will be frustrated, and energies will be diverted into unproductive channels, unless and until we change health care financing and put the patient in the center of the process as the key decision-maker.
—Robert E. Moffit PhD, Senior Fellow, Center for Policy Innovation, The Heritage Foundation
Congratulations on the publication of Healthcare at a Turning Point. …[You] really hit the ball out of the park with this book. First, you identified the real root problem in our healthcare system [payment], and then provided the key solution, a consumer-driven market model. This book should be the new reference text for healthcare reform and should be read by every healthcare provider, administrator, insurer, product developer, and lawmaker. Thank you for delivering such remarkable insight and strategic guidance to a very complex and polarizing issue in the U.S.
—Kurt Weingand, D.V.M., Ph.D., Chief Science Officer, Central Garden & Pet
Have there ever been three not-so-little words that turned an industry upside down, virtually paralyzed the planning process and left providers and consumers alike adrift as much as "health care reform"? The authors bring a calm, dispassionate tone to the dialogue, underscoring the unsettling nature of transition (a much more palatable word than change) and offer reasonable strategies that override politics. I found the emphasis on collaboration especially comforting and doable.
—Ellen Sherberg, Publisher, St. Louis Business Journal
…it is important to have a clear bridge between the issues of today and the possibility of a much brighter future. Without glossing over serious issues…this book describes a way forward for those inside and outside the Healthcare system.
—Jeff Thompson, MD, Chief Executive Officer, Gundersen Lutheran Health System
I appreciate that Rita and Michael call out the "ultimate objective" in the debate—to improve health outcomes at lower cost. It would seem that all sides can agree we save money when we decrease and change the demand for services. There are two approaches that allow us to do it. Approach 1 is to ration care. Approach 2 is that we incentivize and align consumers AND providers toward a plan for health which the authors rightly refer to as the consumer-driven market model.
—Amanda L. Adkins, General Manager and Executive, Healthcare Information Technology, Cerner Corporation
A Vision for Tomorrow
Vision of a Fundamentally Different Future
Seeds of Disruption
Healthcare Isn’t the First Industry in Transition
Where Are We Currently?
Whose Agenda Controls Your Healthcare?Why a Market-Based Model for Healthcare Is a Good Thing
How Did We Get into This Mess?
End of the Model Year
Understanding Healthcare Reform as Business Model Change
Central Role of Payment Reform
Unintended Consequences: The Hospital Example
Paying for Volume, Not Results
Real Impact of CMS on Quality of Care and Costs
Unintended Consequences: The Primary Care Example
Discouraging the Type of Care That Results in Better Outcomes
Creating a Critical Shortage of the "Right" Kind of Doctors
Healthcare Is Big Business
Creating a Competitive, Functioning Market
There Is Little Accountability in the Current System
There Is Little Information Available on Which to Base Responsible Care Decisions
There Is Already Enough Money in the System
There Is a Solution, and It’s Closer than Some Think
In the Eye of the Storm: The Role of Consumers and EmployersA Personal Example
Whose Agenda Controls Your Healthcare? Another Look
Perversion of the Concept of Insurance
Where Do Employers Fit into the Equation?
What Can Consumers and Employers Do?
Demand Transparency and Accountability
Move Conversation toward a Continuum of Care
Create/Become Informed Consumers
Create Incentives for Better Health Behaviors
Change Is Never Easy, but It Is Possible
Comparative Effectiveness Research: Creating an Environment for ChangeDrivers of CER
Role of Cost Containment
Role of Political Expediency
Why Is the Federal Government Specifically Involved?
Focus of CER
Expected Criteria for Choosing Priorities
Redesigning Healthcare Delivery: Hospitals Were Never Meant to Be Destinations of ChoiceAdapting to the Changing Landscape of Healthcare
Needed: A Transfusion of Fresh Thinking
Misuse of IT
Comparative Effectiveness Research Is Shaping Healthcare Delivery
Development of Predictive Care Paths
Changing Quality Metrics
Impact of CER on Hospital Operations
Prudent Responses and Defensive Strategies
Accountable Care Is Needed, ACOs Are Not
Any Provider Can Provide More Accountable Care
What Are You Waiting For?
Bundled Payment: The Next Step in Improving Quality and Reducing Cost
Why Will Bundled Payment Models Do Any Better?
So How Do We Get There?
St. Elsewhere: A Case Study in Bundled Pricing
Taking a Proactive Approach to a Market in Transition
Competing with a Bundled Price
A Brave New World for PayersAdapting to the Changing Landscape of Healthcare Insurance
Needed Here, Too: A Transfusion of Fresh Thinking
Rethinking the Customer
Implications for Healthcare Insurers
What Payers Can Do
Develop Partnerships with Providers
Focus Partnerships on the Prevention of Never Events
Require and Pay for Predictive Care Paths
Change the Basis for Paying Primary Care Physicians
Increase Consumer Engagement and Personal Responsibility, Reducing the Abuse of the System by Consumers
Reduce Fraud and Abuse by Providers
Are You Ready for Disruptive Innovation?
Big Pharma: How to Regain SuccessVulnerabilities of the Current Model
Market-Driven Business Model
Ensuring Stakeholder Value
Strategic Marketing Capabilities
Pressures on Innovation
Role of CER in the Pharmaceutical Industry
Focus on Cost Effectiveness
End of the Placebo-Only Controlled Trial
Impact of CER on Pharmaceutical Operations
Prudent Responses and Defensive Strategies
Develop Service Wraps
Diversify Revenue Streams Away from Payers
Adopt a Rolling Blockbuster Approach
A New Day Is Dawning for Medical Device and Diagnostics ManufacturersGetting Products to Market: Change Is in the Wind
Implications for the Industry
CER: The Threat for Medical Devices
End of the "Last Version Plus 5%" Business Model
Increased Pressure to Rightsize Functionality
Increased Competition with Drugs
Restricted Qualification for Devices
Impact of CER on Medical Device Operations
Prudent Responses and Defensive Strategies for Medical Device Companies
Adopt Strategies Suited to the New Environment
Focus on Reducing the Cost of the Procedure
Develop Service Wraps
Embrace the Cost–Functionality Trade-Off
CER: The Opportunity for Diagnostics
Reduced Tolerance for Redundant Testing
New Commercial Model
Possibility of Mass Screening
Impact of CER on Diagnostics Manufacturer Operations
Prudent Responses and Defensive Strategies for Diagnostics
Diversify the Revenue Base
Begin to Develop Partnerships for Custom Diagnostics
Where Do Medical Device and Diagnostics Companies Go from Here?
Hospital-as-Customer Requires a New Sales Model
Putting Value at the Center of HealthcareRecent Legislative Solutions and Why They Won’t Work
Accountability for Care Is a Good Concept
ACOs: Their Original Purpose
ACOs: Their Role in PPACA
Government-Sponsored Payment and Delivery Systems
Top-Down Approach to Complex Health Policy Problems
ACOs: Key Deficiencies
Recommendations for Policymakers: Healthcare Delivery
Enabling Markets to Create Access to Care
Creating Access to Affordable Health Coverage
Recommendations for Policymakers: Access to Care
Supporting Innovation: Finding the Right Balance at the Food and Drug Administration
Regulation’s Impact on Innovation: A Two-Edged Sword
Making the Rules Clearer, More Transparent, and Simpler
Patent Life: Shooting Ourselves in the Foot
Creating a Roadmap for ChangeRevisiting the Challenge of Industry Transition
Safety in Size? The Rush to Affiliation
Consolidation and the Challenge for Manufacturers
Additional Challenges for Manufacturers
Creating Collaborations to Develop Lifetime Value
Reprising the Consumer
Power of Choice
Increase Perceived Quality
Creating and Sustaining a New Business Model
Harnessing Consumer Choice and Competition to Ensure Accountability: Final Thoughts for Policymakers
About the Authors