Hospitals, doctors shifting to coordinated care and assuming more risk
CHICAGO--Since the state of Massachusetts passed legislation in 2012 to control healthcare costs, there has been consolidation among hospitals and providers, which are trying to adapt to a new system.
On Tuesday, Lahey Health CEO Howard Grant, MD, discussed his company’s experiences dealing with the reforms. He spoke at the American College of Healthcare Executives’ Congress on Healthcare Leadership.
In 2006, Massachusetts enacted a healthcare reform bill, which has led the state to have the highest rate of health insurance coverage in the U.S. In Massachusetts, 96.9 percent of its residents and 98.1 percent of its adults have insurance.
Founded in 1923, Lahey Health is a coordinated healthcare system with five hospitals, a behavioral medicine practice with 39 locations, 586 employed physicians and 38 primary care practice locations.
Today, 30 percent of Lahey’s business is in risk-contracting, but Grant expects it to grow in the coming years. He predicts fee-for-service will continue to decrease.
“The whole market will be in risk in the not too distant future,” Grant said.
Grant said he believes there will be more consolidation in Massachusetts, leaving only three or four health systems in the state. The surviving systems will each have their own health plan, according to Grant.
In the past two years, Lahey’s community hospitals have seen a 9 percent increase in volume compared with a 6 to 8 percent decrease for its competitors. Still, Grant said all hospitals are worried about decreasing admissions and the shift away from fee-for-service, which could reduce their revenues.
Alan Zuckerman, a healthcare strategist and president of Health Strategies & Solutions, said organizations need to scale and take more risks to succeed in the new healthcare environment.
“You’ve got to try different things,” he said. “You’ve got to experiment.”
In the next few years, Zuckerman said integrated systems may need to assume financial risk for a defined population with a single signature, manage quality and cost of care, engage patients and health plan members, provide real-time and comprehensive price and outcomes data to consumers, deliver standard care and work with care coordinators.
“We as a field have been risk-averse,” Grant said. “We have to become more risk-bearing.”
Executive Editor
Tim Casey joined TriMed Media Group in 2015 as Executive Editor. For the previous four years, he worked as an editor and writer for HMP Communications, primarily focused on covering managed care issues and reporting from medical and health care conferences. He was also a staff reporter at the Sacramento Bee for more than four years covering professional, college and high school sports. He earned his undergraduate degree in psychology from the University of Notre Dame and his MBA degree from Georgetown University.