Variations and Consolidations of New Healthcare Delivery Systems

The sole health system in a small city, in which every doctor is employed by the system, is a much easier system to organize for today’s healthcare redesign than a situation where multiple systems serve a more populated area, says Arthur Vercillo, MD, FACS, a surgeon and regional president of Excellus Blue Cross Blue Shield. Upstate New York is an excellent example of the geographic variation found in much of the country. “Developing a healthcare delivery system in that environment is different,” he concedes, and one size doesn’t fit all. In this area, he says, “We still have mom-and-pop type of doctors,” where the next closest physician is 50 miles away. “Some are still taking notes and doing records by hand, not electronic medical records.” Dr Vercillo’s organization is trying to be an “available collaborative resource,” in an effort to create effective systems of care in which providers of nearly any size can participate, regardless of sophistication.

Dennis Scanlon, PhD, session moderator, comments that “We’re asking these new delivery systems to do a lot,” including population management, care coordination, quality measuring and reporting, in addition to taking on risk. This seems to favor mega-organizations, or at least a big enough organization that has the resources, staff, and health information technology to do all this.

There are many ways to take on financial risk, even for smaller providers, says Francois de Brantes, MS, MBA, executive director, Healthcare Incentives Improvement Institute, and he is seeing innovation in the risk-taking arena. He believes in the dictum that “Form should follow function, and function should follow incentives.” Reinsurers are beginning to understand the big business of possibly starting a reinsurance layer and boundaries for providers that allows them to take on certain financial risks.

An important issue, Mr de Brantes acknowledges, is how and when the patient affected. He believes that the physician should be able to refer the patient to whoever is best, “without locking [the patient] into a single kind of organization.” This also means allowing the 30% to 40% of members who require little more than preventive care to get it where they want, especially if it is being paid out of pocket.

Ateev Mehrotra, MD, MPH, associate professor of health care policy and medicine at Harvard Medical School and a hospitalist at Beth Israel Deaconess Medical Center, also expresses concern for patients because of the consolidation brought on by delivery system reform. He states that coordinated care is important for a certain subset of individuals, but it is not critical for all patients, and that could limit choices. When he deals with large organizations that are considering the ACO route, he feels they may try to discourage patients from going out of the system. Beyond limiting patient choice, another real problem in consolidation, he says, is “when you have a large organization with a lot of market power; we know what happens if they drive up prices.”