Health Care in the Next Curve Health Care in the Next Curve Transforming a Dysfunctional Industry John Abendshien A PRODUCTIVITY PRESS BOOK Routledge Taylor & Francis Group 711 Third Avenue, New York, NY 10017 © 2019 by Taylor & Francis Group, LLC Productivity Press is an imprint of Taylor & Francis Group, an Informa business No claim to original U.S Government works Printed on acid-free paper International Standard Book Number-13: 978-1-1386-2654-6 (Hardback) International Standard Book Number-13: 978-1-3152-2813-6 (ebook) This book contains information obtained from authentic and highly regarded sources Reasonable efforts have been made to publish reliable data and information, but the author and publisher cannot assume responsibility for the validity of all materials or the consequences of their use The authors and publishers have attempted to trace the copyright holders of all material reproduced in this publication and apologize to copyright holders if permission to publish in this form has not been obtained If any copyright material has not been acknowledged please write and let us know so we may rectify in any future reprint Except as permitted under U.S Copyright Law, no part of this book may be reprinted, reproduced, transmitted, or utilized in any form by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying, microfilming, and recording, or in any information storage or retrieval system, without written permission from the publishers For permission to photocopy or use material electronically from this work, please access www copyright.com (http://www.copyright.com/) or contact the Copyright Clearance Center, Inc (CCC), 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400 CCC is a not-for-profit organization that provides licenses and registration for a variety of users For organizations that have been granted a photocopy license by the CCC, a separate system of payment has been arranged Trademark Notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe Library of Congress Cataloging‑in‑Publication Data Names: Abendshien, John, author Title: Health care in the next curve : transforming a dysfunctional industry / John Abendshien Description: Boca Raton : Taylor & Francis, 2018 | Includes bibliographical references Identifiers: LCCN 2018009308 | ISBN 9781138626546 (hardback : alk paper) | ISBN 9781315228136 (ebook) Subjects: | MESH: Health Care Sector economics | Economics, Medical | Health Care Sector trends | Insurance, Health economics | Delivery of Health Care economics | United States Classification: LCC RA410.53 | NLM W 74 AA1 | DDC 338.4/73621 dc23 LC record available at https://lccn.loc.gov/2018009308 Visit the Taylor & Francis Web site at http://www.taylorandfrancis.com and the Productivity Press Web site at http://www.ProductivityPress.com Contents Foreword xi Preface xv Author xix SeCtion i inDUStRY DYSFUnCtion: itS Root CAUSeS AnD eFFeCtS It’s Not the Future We Used to Have The Old Future The Curves of Health Care The Root Causes of Industry Dysfunction The Economic Human and the Next Curve .10 Fast Forward: A New Future .12 This Book: A Look Ahead 13 References 15 Health Care’s Perfect Storm 17 The Gathering Forces 18 What’s Wrong with This Picture? .20 Costs on an Upward Trajectory 22 Heading toward a Spending Ceiling 23 Is Rationing the Default Scenario? .24 References 25 What Happened to Health Insurance? 27 A Perfectly Dysfunctional Model 28 Affordable Access: Still No Fix 30 v vi ◾ Contents Mandates Mean Fewer Products, Higher Prices 32 Employer Health Plans: Not What They’re Cracked Up to Be .33 Medicare Trouble Ahead 36 Medicaid Also Facing an Uncertain Future .38 One Size Doesn’t Fit All .39 References 40 Follow the Money: A Broken Payment Model 41 Why Not “Food Insurance?” 42 Fee-for-Service an Incentive for Utilization 44 Impact on Care Coordination 45 A Recipe for Waste, Fraud, and Abuse 46 Moving toward Value 48 Problems Measuring Value 51 References 53 Silos, Everywhere 55 Automobiles Get Pretty Good Health Care… 56 Where’s the “System” in Health Care? .58 The Problems of Service Fragmentation 60 Information Silos: Part of the Problem 62 Geographic Silos, Too 64 Population Health: More Teamwork Needed 64 Silo Culture Part of the Industry’s DNA 65 References 69 The Real Costs of Regulation .71 The Perils of Regulatory Overreach 72 The Computer Will See You Now .73 The Price of Regulating Prices 76 Certificate of Need a CON Job 78 More Regulation, Less Innovation 80 Frozen in Time 82 Tort Reform, a Critical Need 83 The Real Costs of Regulation 84 References 85 Contents ◾ vii Where’s the Competition? .87 Competition and Value 88 More Government, Less Competition 89 Independent Physicians: An Endangered Species 92 Eroding Competition in the Insurance Market 93 Conflicting Market Signals 94 Narrow Networks, Narrower Choices 96 Consumers Caught in the Middle 97 References 97 Why Government Health Care Isn’t the Answer .99 “It’s the Government: They Know Best….” .100 Medicare for None? 103 Single Payer Means Higher Costs 106 Rationing Is an Inevitable Outcome 108 Impacts on Education, Research, and Innovation 109 Administrative Costs Aren’t Necessarily Lower 110 Single Payer Very Popular—Until People Understand What It Is 111 Americans Don’t Do Socialism Very Well 114 References 115 Market Disruptors and Transformers 117 Big Data and a New World of Precision Medicine 118 The Patient Is in .120 A Fusion of Segments 122 Employers/Health Care 123 Big Pharma/Insurance/Health Care 125 Providers/Health Plans 126 Providers/Suppliers .126 Is the Community Hospital Becoming Obsolete? 126 Collective Consciousness and an Empowered Market 129 References 130 viii ◾ Contents SeCtion ii HeALtH CARe in tHe neXt CURVe: A RoADMAP to inDUStRY tRAnSFoRMAtion 10 Destinations of the Next Curve 135 Access, Choice, and Value .136 Access 136 Choice 137 Value .138 A Roadmap to Industry Transformation 139 11 First, the Safety Nets 143 Facing the Realities of Safety Net Needs 144 I-1 Provide Universal Catastrophic Coverage 145 I-2 Put Invisible Reinsurance Safety Nets in Place for Those with Pre-Existing Conditions 146 I-3 Assure Guaranteed Issue, but with Incentives for Continuous Coverage .148 I-4 Overhaul Medicaid: Make It a True Safety Net for the Chronically Ill and Disabled, and a Transitional Program for the Able-Bodied 149 I-5 Restructure Medicare to Ensure Long-Term Solvency 152 I-6 Give Military Veterans Choices, Too 155 References 156 12 Insurance and Choice, Once Again 157 Restoring the Concept of Insurance 158 II-1 Promote the Growth of Consumer-Directed Health Plans and Health Savings Accounts 158 II-2 Get Rid of the Employer Tax Exclusion; Give Employees Options 160 II-3 Repeal Anti-Trust Exemptions; Energize Competition in the Insurance Market 162 II-4 Eliminate Regulations That Standardize Insurance Product Design 162 II-5 Revise IRS Rules to Make Preventive and Health Maintenance Care Pre-Deductible 164 Contents ◾ ix II-6 Promote Interstate Insurance “Regulatory Competition” and Sales 165 13 From Production to Value 167 Value in the Next Curve 168 III-1 Complete the Transition to Value-Based Payment Methodologies .169 III-2 Make the Patient-Centered Medical Home the Standard for Primary Care 170 III-3 Apply Bundled Payment Approaches to Chronic Diseases and Conditions 171 III-4 Design Multi-Provider Payment Methodologies to Support Inter-Disciplinary Care 172 III-5 Pay Providers for High-Value Services and for Virtual Care 172 III-6 Make the Shift to Transparent, Market-Based Reference Pricing 173 References 175 14 No More Silos: Patient-Centered Care in the Next Curve 177 A Team of Teams 178 IV-1 Target High-Risk Patient Populations for Early-Stage Intervention 179 IV-2 Organize and Coordinate Health Services Delivery Around the Patient 181 Develop Coordinated Disease Management Centers 182 Integrate Behavioral and Social Services into the Coordinated Disease Management Center Model .184 Align Addiction Treatment with Medical Care 185 Develop Specialized Acute Care Units for Elderly Patients 186 Manage Post-Acute Care Transitions and Processes 186 IV-3 Rationalize Delivery Platforms for Optimal Access, Effectiveness, and Efficiency 188 238 ◾ Appendix 2018 and Forward: Lessons Learned? You may be asking, “What’s the relevance of legislation going back some 100+ years? What does that have to with where we’re at today?” The sad answer is that most of the laws and regulations passed since the early part of the twentieth century are still with us They provide both the basis for existence and the agenda for our constant companion, MAC A great deal of this book is focused on the need to unwind, revise, or otherwise fix the financial and regulatory structures that we have inherited As George Santayana warned, “Those who cannot remember the past are condemned to repeat it.” References Health at a Glance, OECD Indicators, Organization for Economic Cooperation and Development, Paris, France, 2015, pp 80–81 The Complexities of Physician Supply and Demand: Projections from 2015–2030, The American Association of Medical Colleges, Washington, DC, 2017 Update, p vii index Note: Page numbers followed by f and t refer to figures and tables respectively A Abbreviated New Drug Application (ANDA), 205 Abuse claim in health care, 46–48 ACA See Affordable Care Act (ACA) Academic health system, 109–110 Accountable Care Organizations (ACOs), 48–50, 199, 231 Actuarial value, 43, 111 Acute Care for Elders (ACE) units, 186 Addiction treatment, 185 Adjusted Clinical Group, 180 Administrative costs, 110–111 Administratively-driven health care See Second Curve of health care Adverse selection of health insurance, 32 Advocate Health Care, 94 Aetna Inc., 125 Affordable Care Act (ACA), 4–5, 22, 30–32, 89, 95, 149, 234–237 ACOs, 48–50, 199, 231 actuarial values under, 112 drawback, 30, 147 health care costs and, 22 in health insurance, 30 hospital M&A transactions, 90, 90f individual market and, 28 insurance, 148 invisible reinsurance program by, 147 IPAB, 25, 102 mergers, 90, 94 one-size-fits-all health plans, 8–9 Aging population, 60 Medicaid, 39 Medicare, 36–37 AHA (American Hospital Association), 7, 231 Allegis, 219 Alternative payment models (APMs), 48, 169, 172 gainsharing, 48 shared savings, 48–49 AMA (American Medical Association), 119, 200, 225–226 AMA Masterfile, 58 Amazon, health care in, 123 239 240 ◾ Index American Hospital Association (AHA), 7, 231 American Medical Association (AMA), 119, 200, 225–226 Ameriplan, 231 ANDA (Abbreviated New Drug Application), 205 Anti-steering provisions, 200 Anti-trust exemptions, 162 APMs See Alternative payment models (APMs) Artificial intelligence (AI) centers, 191 Attorney contingency fees, 208 B Bauer, J., 24 Behavioral conditions, 60 Berkshire Hathaway, 123 Big Data, 11, 88, 180 analytical offspring, 119 patient-centered care and, 118–119 and precision medicine, 119 Big Five companies, 93 Big pharma/insurance/health care, 125 Billing and insurance-related (BIR) functions, 46 Blue Cross Blue Shield, 174, 226–227 Blue Zone, 18 British health system, 101 Broad-based safety nets, 136 Buffett, W., 123 Built-in insurance model, 83 Bundled payment model, 50, 237 advantages, 169–170 APMs and, 172 for chronic care, 171–172 in Netherlands, 171–172 in Taiwan, 172 C Canadian health system, 113 Capitation, 50 advantage, 50–51 drawbacks, 51 payment method, 50 Caregiver, 11, 45, 50–51, 59t chronic disease, 60 coordination among, 65–66 disciplines, 59t extensivist, 187–188 The Catalyst for Payment Reform, 174 CDHP (consumer-directed health plans), 158–159 CDMC See Coordinated Disease Management Center (CDMC) Centers for Medicare and Medicaid Services (CMS), 22–23, 74, 206–207, 233 Centers of Excellence (COEs), 182 CER (clinical effective research), 118 Certificate of Need (CON) laws, 10, 78–80, 198 in United States, 231–232 Certificate of Public Advantage (COPA) laws, 198–199 Chicago, disease profile, 18 The Children’s Health Insurance Program (CHIP), 151–152 CHP (Comprehensive Health Planning), 78–79 Chronic disease, 18–19, 19f bundled payment model for, 171–172 caregivers, 60 patients, care coordination and, 187 Clinical effective research (CER), 118 Clinical pathways, 61 Index Cloud-based information, 118 Clover Health, 121 CMS See Centers for Medicare and Medicaid Services (CMS) COEs (Centers of Excellence), 182 Cognitive map, professional, 66 Community hospital, 126–129 Company store, 33 Competition government and, 89–92 in insurance market, 93–94 in Medicare, 105 in provider segment, 88 reduction by government policy, 94–95 regulatory in interstate insurance, 166 and value, 88–89 Competitive market, 88 Comprehensive Health Planning (CHP), 78–79 Computerized axial tomography (CT) technology, 82 Condition-related care services, 216 CON laws See Certificate of Need (CON) laws Consumer-directed health plans (CDHP), 158–159 Consumer Financial Protection Board, 102 Consumer price index (CPI), 107f Consumers, health insurance/health care for, 137–138 Coordinated Disease Management Center (CDMC), 182–184, 183f behavioral/social services integration into, 184–185 elderly patient population care in, 186 COPA (Certificate of Public Advantage) laws, 198–199 Cost cross-subsidization, 105 ◾ 241 Cost-plus reimbursement formula, 78, 233 Coverage gap, 31 CPI (consumer price index), 107f CPT (current procedural treatment), 120 “Crossing the Quality Chasm: A New Health System for the Twenty-First Century” report, 65 Current procedural treatment (CPT), 120 CVS Health Corp (CVS), 125 D Dartmouth–Hitchcock health system, 206 DaVita, Inc., 125 Death panels, 101–102 Diagnosis-related groups (DRGs), 120, 233 Disease-related care services, 216 Disruptors, 213–214 DNA sequencing, 119 Double-dipping, 48 DRGs (diagnosis-related groups), 120, 233 Drug, low-cost, 203 generic drugs, approval process, 204–205 market competition and, 203–204 “right-to-try” legislation, 205 Dysfunctional regulations, 9–10 e The economic human, xvii, 10–11, 196–197 e-health, 192 Elderly patient population, 186 242 ◾ Index Electronic health records (EHRs), 45, 62–63 drawbacks, 75 impacts on patient care, 75t meaningful use rules, 74 systems, 207 usage process, 73–74 Employer-based health insurance, 227–228 Employers/health care in industry segments fusion, 123–124 Employer-sponsored health plans, 31, 33–36, 160 company store, 33 group insurance, 34–35 tax exemption, 34 tax-free benefits, 34–35 tax provision for, 34 Employment Retirement Income Security Act (ERISA), 164, 232 End-stage product, 52 Essential benefits provisions, 8–9, 28, 163 Excess inflation, 22 Explorys, 118 Extensivist, 187–188 F Facebook, health care in, 124 FDA approval process, 81–82 Federal student loan program, 108 Federal Trade Commission (FTC), 95, 125, 199 Fee-for-service payment, 6, 44, 168 First Curve of health care, 6, 220f Flipped classroom model, 181–182 Food insurance, 42–43 Four-firm market concentration level, 93 Fraser Institute, 113 Fraudulent claim in health care, 46–48 Free health insurance, 33 FTC (Federal Trade Commission), 95, 125, 199 G Gainsharing programs, 48 limitations, 49 GDP percentage, spending growth as Medicaid, 38f Medicare, 37f national health care, 23f Generic drugs, 204–205 Genomic science, 119 Geographic area, health care and, 64 Germs, 60 Global capitation, 50 GMENAC (Graduate Medical Education National Advisory Committee), 226 Google, health care in, 120, 124 Gottlieb, J., 77 Government, 100–103 academic health system, 109–110 aortic valve replacements criteria, 103 competition and, 89–92 health care costs and, 106 infusion into single payer system, 106–107 payers, 129 provider systems, insurers and, 97 role in physicians, 92 -run health care, 99–115 spigot, 108 Graduate Medical Education National Advisory Committee (GMENAC), 226 Index Group insurance, 34–35, 161 Gruber, J., 111 H Hagland, M., 24 Half-life issue, 49 Health and Human Services (HHS) Department, 101, 110 Health care AI centers, 191 Big Data and, 180 British, 101 Canadian, 113 computer technology in, 74 coordination, 45, 61, 64–65 curves of, 6–7 delivery segments, 59t dysfunctional regulations, 9–10 in eighteenth century, 60 executives, 197 financing, 12, 29 First Curve, geographic area and, 64 government-run, 99–115 industry groups, 94 insurance See Insurance, health care issues, 8–10 national health care spending on, 23, 23f Next Curve, 11–12, 11f non-profit prepaid plan, 226 organizations, 222 payment approaches in See Payment approaches political and, 10, 23, 77 safety nets See Safety nets Second Curve, xvii, 6–7 stages, 59t system, 58 third-party payer and, 42–43 transaction parties, 11 ◾ 243 in Trump presidency, 4–5 in twenty-first century, 60 UK, 114 vs auto service business, 56–57 Health care costs, 22–23 ACA and, 22 BIR functions impacts on, 46 government and, 106 measuring value, 51–53 of OECD countries, 21f rationing, 24–25 regulations, 76–78, 84–85 waste, 64 Healthcare Effectiveness Data and Information Set (HEDIS) indicators, 52, 193 Health care regulations, 72–73 administrative burden and, 206–207 competition restricting laws and, 197–200 dysfunctional regulations, 9–10 insurance, 32–33 low-cost drug and, 203–205 market pricing barriers removal, 200–201 medical malpractice laws and, 207–209 price, 76–78, 84–85 risk adjustment, 83 Stark law removal and, 201–202 Health care segments, fusion of, 122–123, 123f big pharma/insurance/health care, 125 employers/health care, 123–124 providers/health plans, 126 providers/suppliers, 126 Health care services, 9, 12, 42, 60–61 categories, 215–217 disease- and condition-related care, 216 244 ◾ Index Health care services (Continued) health and wellness coordination, 217 price transparency, 174 routine stuff, 215–216 Health Information Exchanges (HIEs), 63 Health Information Technology for Economic and Clinical Health Act (HITECH Act), 62–63, 74 Health Insurance Portability and Accountability Act (HIPAA), 146 Health plans benefit, 165 in competitive market, 89 employer-sponsored, 31, 33–36 high-risk enrollees in, 181 Medi-Cal, 18 one-size-fits-all, 8–9, 85 Health reimbursement account (HRA), 161 Health savings account (HSA), 159 Health Security Act, 235 Health services delivery, 181–182 ACE units, 186 addiction treatment with medical care, 185 CDMC, 182–185, 183f post-acute care, 186–188 Health system delivery platform, 189–190 HEDIS (Healthcare Effectiveness Data and Information Set) indicators, 52, 193 HHS (Health and Human Services) Department, 101, 110 HIEs (Health Information Exchanges), 63 High-risk patient, 179–181 care coordination, 187 health plans, 181 High value care, 172–173 Hillarycare, 235 limitations, 236 Hill–Burton Act, 78–79, 228–229 HIPAA (Health Insurance Portability and Accountability Act), 146 HITECH Act (Health Information Technology for Economic and Clinical Health Act), 62–63, 74 Home insurance, 28–29 Homo economicus, 10, 223 Hospital M&A transactions, 90, 90f network relationship, 96 Hospital Survey and Construction Act, 78, 228–229 HRA (health reimbursement account), 161 HSA (health savings account), 159 i IBM Watson, 118 ICD10 (International Classification of Diseases version 10), 72, 76 Improper payments, 46–47 Independent Payment Advisory Board (IPAB), 25, 101–102, 108 Independent physicians, 92–93 Individual market, 28 Industry dysfunction, xvi insurance and, 8–9, 157–166 patient-centered care, 9, 177–194 payment methodologies, 9, 167–175 regulation and, 9–10, 195–209 root causes, 7–10, 8f safety nets, 8, 143–156 Information systems, 62 Insanity, Index Institute for Healthcare Improvement, Second Curve and, Insurance, 158 Insurance companies, 126 Clover Health, 121 Oscar, 121 Insurance, health care, 8–9, 28–29 ACA, 30–32 actuarial value, 111 adverse selection, 32 built-in insurance model, 83 competition in, 93–94 employer health plans, 33–36 government policy merger, 95 group insurance, 34–35, 161 inter-state, 165–166 malpractice insurance, 83–84 Medicaid, 38–39 Medicare, 36–37 narrow networks, 96 perfectly dysfunctional model, 28–29 premiums, 22–23 products, 158 rating rules, 32 regulation of, 32–33 restoring See Restoring health insurance state insurance regulations, 32 as tax, 33–34 uninsured people, 31–32 in U.S., 30–31, 31f, 93 value, 88 Interdisciplinary care, multiprovider payment for, 172 Internal Revenue Service Code, 84–85 International Classification of Diseases version 10 (ICD10), 72, 76 Interoperability, 62 ◾ 245 Interstate insurance markets, 165–166 Invisible risk sharing program, 146–147 IPAB (Independent Payment Advisory Board), 25, 101–102, 108 J JPMorgan Chase, 123 K Kaiser Family Foundation, 112 Kerr-Mills Act, 230 Kodak, 212 L Large-scale health care delivery systems, 90–91 Life expectancy at birth, 21, 21f Low-cost drug, 203 generic drugs, approval process, 204–205 market competition and, 203–204 “right-to-try” legislation, 205 M MAC (medical-administrative complex), xvi, 10, 84–85 McCarran-Ferguson Act, 162, 228 Machine learning technology, 120 MACRA (Medicare Access and Children’s Health Insurance Program (CHIP) Reauthorization Act of 2015), 74, 192, 206 Malpractice insurance, 83–84 Mandated benefits, insurance, 32 246 ◾ Index Mandatory community-rating provision, 163–164 Market competition in insurance, 93–94 concentration, 97 consolidation, 90 ecosystem, 212–214 structure, 91f Market disruptors and transformers Big Data/precision medicine, 118–120 collective consciousness/ empowered market, 129–130, 130f community hospital, 126–129 fusion of segments, 122–126, 123f Market-driven health care See Next Curve Market pricing barriers, 200 anti-steering provisions, 200 MFN clause, 200–201 Massachusetts Blue Cross, Partners Health and, 91 Meaningful use rules, EHR, 74 Medicaid, 38–39, 38f, 149 aging population, 39 restructuring for safety nets, 149–150 Medical malpractice laws, 207–209 management information systems, 180 marketplace, 10–11 price index, 107f Medical-administrative complex (MAC), xvi, 10, 84–85 Medi-Cal health plan, 18 Medicalization, 65 Medicare, 36–37, 37f, 137, 204 administrative costs, 110 age of eligibility, 152–153 aging population, 36–37 competition in, 105 cost cross-subsidization, 105 costs of care, 153 fair price by, 76 and Medicaid in United States, 230 MSSP, 48–49 patient readmissions in, 72–73 pricing, 76–77, 92, 105 subsidies for, 153 sustainable, 152–155 as unified plan, 154 Medicare Access and Children’s Health Insurance Program (CHIP) Reauthorization Act of 2015 (MACRA), 74, 192, 206 Medicare Advantage, 36, 95, 153–154 Medicare Catastrophic Coverage Act, 234 Medicare for all, 37, 39, 77, 103 Medicare for All Act, 105 Medicare-Medicaid legislation, 30, 106–107 Medicare Modernization Act, 153 Medicare Shared Savings Program (MSSP), 48–49 Mergers between Chicago-area health systems, 94–95 hospital, 90, 90f insurance and, 92–93 MFN (most-favored-nations) clause, 200–201 Micro-hospitals, 128 Military industrial complex See Medical-administrative complex (MAC) Morrison, I., Most-favored-nations (MFN) clause, 200–201 Index ◾ 247 MSSP (Medicare Shared Savings Program), 48–49 Multi-tier program, 148 NorthShore University Health System, 94 Northwell Health system, 82–83 n o Narrow network, 96 National health care, 23f National Health Planning and Resources Development Act, 78, 231 National Institute for Health and Care Excellence (NICE), 101, 109 NDA (New Drug Approval), 81 Negative impact, EHRs, 75t Netherlands, bundled payment model in, 171–172 Network, 96 New Drug Approval (NDA), 81 Next Curve, 11–12, 11f access as destinations, 136–137 CDMC, 182–184, 183f choice as destinations, 137–138 consumers and value, 214–219 destinations, 137f future perspective, 211–223 health system delivery platform in, 189–190 new market ecosystem, 211–214 patient-centered care, 177–194 positioning, 219–221 from production to value, 167–175 restoring health insurance, 157–166 strategic focus, 219–220, 220f transformational goals, 140f value See Value NICE (National Institute for Health and Care Excellence), 101, 109 Non-economic damages cap, 208 Obamacare See Affordable Care Act (ACA) One-size-fits-all health plans insurance, 8–9, 85 Opportunity cost, 24 Organization for Economic Cooperation and Development (OECD) health care costs, 20, 21f life expectancy at birth, 21, 21f Organizations positioning agenda in Next Curve, 220–221 Oscar (insurance companies), 121 Out-of-pocket payment, 22, 106, 113, 159 Overpricing, 43, 46 Overutilization, 42 in U.S., 47, 47f P Paradox and Imperatives in Health Care (book), 24 Partial capitation, 50 Partners Health and Massachusetts Blue Cross, 91 Patent system, 80–81 Patient-centered care, 177–179 Big Data and, 118–119 computer technology in, 74 delivery platforms, 188–190 EHR impacts on, 75t health services delivery, 181–188 high-risk patient populations, 179–181 248 ◾ Index Patient-centered care (Continued) home as health care center, 190–192 IT interoperability and, 192–193 Patient-centered disease management center, 139 Patient-centered medical home (PCMH) model, 170–171 Patient information exchange, 61–62 Patient Protection and Affordable Care Act See Affordable Care Act (ACA) Pay-for-doing approach, 50 Pay-for-performance method, 48–49, 202 Payment approaches, 9, 12, 45 APMs, 48 bundled payment model, 50, 169–170, 237 capitation payment method, 50 fee-for-service, 6, 44, 168 gainsharing, 48 high-value and virtual care, 172–173 Medicare, 76–77, 92, 105 MSSP, 48–49 multi-provider, 172 out-of-pocket, 22, 106 PCMH, 170–171 shared savings programs, 48 value-based, 169–170 PCMH (patient-centered medical home) model, 170–171 Perfectly dysfunctional model, 28–29 Perloff Report, 231 Perry, M J., 42 Petrie, H., 66 Physician Quality Reporting System (PQRS), 206 Phytel, 118 Platform (health delivery system), 188 Population health, 64–65 Porter, M., Positive impact, EHRs, 75t Post-acute care, 186–188 PPS (Prospective Payment System), 79, 233 PQRS (Physician Quality Reporting System), 206 Precision medicine, 119 Preventive and health maintenance services, 164–165 Primary care, PCMH model for, 170–171 Private and commercial pay customers, 129 Prospective Payment System (PPS), 79, 233 Proton beam therapy, 100–101 Provider -driven health care See First Curve of health care and insurers, 91 mandates of insurance, 32 organizations, 59t R Rating rules, insurance, 32 Rational choice theory, xvi, 10 Rationing, 24–25, 108–109 Regulators, 82 Resource-Based Relative Value Scale (RBRVS), 76 Restoring health insurance, 157 anti-trust exemptions cancellation, 162 CDHP and HSA, 158–159 expanded employee plan options, 160–162 Index flexible insurance product design, 162–164 interstate insurance markets, 165–166 pre-deductible preventive care, 164–165 Retail clinics, restrictions on, 199–200 “Right-to-try” legislation, 205 Risk adjustment regulations, 83 Routine care services, 215–216 Ryan, P., 153 S Safety nets, 8, 144–145 broad-based, 136 guaranteed issue for continuous coverage, 148–149 invisible reinsurance, 146–147 military veterans and, 155–156 overhaul Medicaid, 149–152 restructuring Medicare, 152–155 UCC, 145–146 San Bernardino, disease profile, 18 Sanders, B., 104–106 Second Curve of health care, xvii, 6, 220f in AHA, in Institute for Healthcare Improvement, The Second Curve (book), Self-insured companies, 121 plans, 232 Self-pay patient, 144 Service fragmentation, 60–61 mandates of insurance, 32 ◾ 249 Shared savings programs, 48 limitations, 49 MSSP, 48–49 Shumlin, P., 111–112 The silver tsunami, 20 Single-payer health care model, 100, 103, 106–108 administrative costs, 110–111 advantages, 103–104 government infusion into, 107–108 implementation in Vermont, 111 market-based incentive, 106 in State of California, 112 tax and, 112–113 in United States, 112–113 Single payer social insurance program, 36 Social Security Act, 48, 227 Social Security Administration, 110 Social Security Amendment of 1965, 230 Social Security Amendments of 1983, 233 Specialized acute care units, 186 Spending growth, 22–23 Dartmouth research on, 64 Medicaid, 38f Medicare, 37f, 107–108 national health care, 23f Stark law, 48, 201–202, 234–235 Stark, P., 201–202 Start-up companies, 121, 124 State insurance regulations, 32 System, health care, 58 t Taft, 225–226 Taiwan, bundled payment model in, 172 Tax exemption, 34, 160 250 ◾ Index Tax-free employee health benefits, 229 Telecommunications deregulation, 140 Telemedicine technology, 121 Third-party payers, 42–43 and influencing organizations, 67t–68t Tyson, B., 190 U UCC (universal catastrophic coverage), 145–146 UK health care system, 114 Uninsured people, 31–32 UnitedHealth, 125 United States health care ACA See Affordable Care Act (ACA) Blue Cross Blue Shield, 226–227 bundled payment methodology, 237 chronic diseases growth in, 18–19, 19f CON processes in, 231–232 costs, 20, 21f electronic information of, 63 ERISA, 164, 232 expectancy at birth, 21, 21f GMENAC, 226 health insurance in, 30–31, 31f, 93 Hillarycare, 235–236 Hill–Burton Act, 78–79, 228–229 Kerr-Mills Act, 230 McCarran-Ferguson Act, 228 Medicare and Medicaid, 230 Medicare Catastrophic Coverage Act, 234 merger in, 95 overutilization and waste, 47, 47f patent system, 80 Perloff Report, 231 physician supply, limits on, 225–226 PPS, 233 regulation, 85 Social Security Act, 227 Stark law, 48, 201–202, 234–235 system, 20–22, 58, 91 tax-free employee health benefits, 229 treatment/technologies to public, 100–101 uninsured people, 31 Universal catastrophic coverage (UCC), 145–146 Universal health care, 103–104 Universal Medicare, 104, 107–108 Unnecessary health service, 44 Unreimbursed costs, 33 V VA health care system, 105–106 Value, 6–7, 136, 138–139, 168 -based payment model, 169–170 -based reimbursement, 233 competition and, 88–89 differentiators of health care, 217–219, 218f Value-based modifier (VBM), 206 Value, from production to bundled payment for chronic care, 171–172 high-value and virtual care payment, 172–173 market-based reference pricing, 173–175 multi-provider payment for interdisciplinary care, 172 Index PCMH payment for primary care, 170–171 value-based payment model, 169–170 VBM (value-based modifier), 206 Vermont, single-payer model in, 111 Veteran’s Administration health system, 155–156 Virtual care, 173, 191 ◾ W Wasteful payments, 46–47, 64 Wearables technology, 122 The Welfare Reform Act of 1996, 150 Whole Foods, 124 Whole-genome sequencing, 119 251 .. .Health Care in the Next Curve Health Care in the Next Curve Transforming a Dysfunctional Industry John Abendshien A PRODUCTIVITY PRESS BOOK Routledge Taylor & Francis Group 711 Third Avenue,... Cataloging in Publication Data Names: Abendshien, John, author Title: Health care in the next curve : transforming a dysfunctional industry / John Abendshien Description: Boca Raton : Taylor & Francis,... removing the barriers to care coordination; and finally, eliminating harmful or otherwise counterproductive regulations If the industry and an information-enabled market can effectively make these