Healthcare payment models are changing. Since the passage four years ago of the Affordable Health Care act, even the total optimists have become somewhat frustrated with the ups and downs of implementation, and many progressives continue to call for even greater change, with new attempts at single-payer mechanisms that are unlikely to happen even if the Democratic Party were to control the Presidency and both houses of Congress. However, we have experienced improvement in the cost and quality of government-subsidized care through the ACA. More people are covered than ever before.
What has also occurred that has not gotten much press is that private exchanges and commercial ACOs are emerging as effective new healthcare payment models that are rapidly growing and spreading. More and more employers are meeting their mandate to provide care by putting their employees into these exchanges. The result is a new world of finance for hospitals and practices. The new world is not a world based on fee-for-service economics with customers who demand more because someone else is paying. It is a world where a market that lowers cost and improves quality can have a chance of working. Perhaps too much cost has been shifted under the new healthcare payment models to middle-class patients who now have deductibles that force them to think about price and whether a service adds value, but it is happening.
I recently had the thought that even if the ACA were repealed tomorrow, we would not return to the world of healthcare finance of 2008, the year the President was elected, or the world of 2010, the year the ACA was passed. It is not the government that is providing the momentum for the transition in healthcare payment models now; it is the business world of payers and employers. I do not think that employers will pass on this new opportunity to continue to use their ability to lower costs through these new mechanisms.
Several years ago I said that although I personally preferred a single-payer mechanism of healthcare finance coupled with entitlement and not a mandate, I was sure that was unlikely to happen. I also said then that just as it took business that wanted access to the lower costs of manufacturing in China, to open up China, we would not get a better healthcare product at a lower cost until it became a demand of business. The cynic in me notes that business knows how to get Congress to work.
Despite my cynicism, though, I am happy to see the death of fee-for-service care on the horizon and moving slowly toward us.
