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“The Coming Healthcare Apocalypse”
Specifically, how to avoid it…
… and what you really can learn from the New York Times and similar media
… and how the humanities serve business decisions
… and why you should take The Road Not Taken, even if it makes you look silly
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Health Care in 2012?
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Recently the NY Times published a Sunday article that would lead one to believe the Government Accountability Office (GAO) is urging the cancellation of the Medicare Advantage Bonus Payment Demonstration (aka STARS).
We’ve laid out how the MA bonus program for payers is illustrative of the New Profit Paradigm elsewhere – for instance here.
Now typically, we don’t like to pick on newspapers in general (or buggy whip manufacturers , VHS rental companies, etc.) – or to point out significant oddities and inconsistencies in their reporting (again, same blog post analyzes their article entitled “The End of Health Insurance Companies” – note, they’re completely wrong on that too.).
But since inquiring readers want to know…
Although the NYT article makes it sound as if the GAO is urging the cancellation of the entire pay-for-performance concept (and admittedly it’s hard to follow their ‘reporting’ in the midst of their sense of Self)…
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Um, “No comment.”
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… the exchange is actually around the exact definition of pay-for-performance, specifically what the bonus amounts are tied to, how high the bar is set to received substantial bonuses, and who has the authority to define such things in the first place (legislators, CMS, etc.). So of course, it’s a different situation than one would believe from reading the NYT.
Now on to pushing a bit further beyond traditional ‘media’. The next question you learned to ask in your post Foucault-ian deconstruction grad school seminars on ‘research’ is: “What question are they not asking?” In other words, what are they not telling you (i.e. the context they are not sharing to heighten their position or increase the general degree of sensationalism: “Extra, extra, read all about it!”)?
Well, that would be the entire PFP program is already in motion throughout the various entities and populations (performance metrics, sometimes called Stars – but could be Circles our Squares for all it matters – for long term care facilities, for hospitals, for providers, for Medicaid, etc.). The trend’s already here and accelerating. Now these performance-based reimbursement metrics have different definitions, different labels, and different formulas – might not even be reimbursement but simply penalties for repeat low performers.
Just as with the complete misread in their “End of Insurance Companies” article, the NYT gets it backwards. The fact that the big boys are now hashing out the details and playing Game of Thrones…
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Stay tuned for more
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… means it’s simply moving from trial to part of the infrastructure – this is a typical and expected phase of the maturation process (hegemonic crystallization if you will – hey, we already told you to read Gramsci – don’t the business folks ever take humanities classes?)
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Wire-rimmed glasses make the look
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Oh, but RowdMap, don’t you have a vested interested or a biased read? Yeah, sure – just like everybody – but not as much you might think. Anyway, do something thinking about the narrative and see if it fits.
Or take a look at the overall demographic trends (10,000 individuals aging into Medicare every day for the next couple of decades, at the same time a bit of a budget crunch/economic shift happening)…
… or the market trends (lack of demonstrated ability to exclusively show cost-savings based ROI on a commercial population with job rotation – i.e. tough to get savings from COPD when the employee is only there on average for 36 months – for alternative approaches that actually work see RedBrick Health and Bloom Health ),
… or the current policy environment (notably we already have a single payer system when you split the proverbial health care dollar between Medicare, Medicaid and everything else – and this will only increase from say 60 cents of every dollar to well over 90 cents in the coming years – cf. the demographic changes)
… or, my personal favorite, M&A activity (always follow the money to see what’s real) – top 10 plans having dropped billions (double digit billions), in cash, in the past few months on specific investments around this New Profit Paradigm, explicitly explaining that this is what they see as their ‘strategy’, i.e. where they’re placing their bets (if you don’t get this, you don’t know how to read M&A activity as market direction – again, take a peek at this post).
Now we won’t plumb the reasons why the NYT et al is shaping the narrative as they are – whether it’s motive-driven or lack/ability-driven, but that’s a subject worth some thought.
If you really want to dig into legislative landscape and its trends it’s worth broadening your horizon to things like the accepted ‘merger’ of two of the largest Primary Benefit Managers (Express Scripts & Medco) and how readily that passed review, and more importantly ‘why’ it did so. (Again, a subject for another time, but it’s part of the march to the New Profit Paradigm, specifically the move from Fee-for-Service to Pay-for-Performance as a means of budget trend mitigation and market consolidation, in a way that works for and ultimately benefits consumers.)
OK , okay. Since you asked, we’ll go ahead and delve into why the NYT et al is constructing this narrative. One short answer, of course, is that the NYT is giving its audience what it wants to hear. The much more interesting question is why its audience wants to hear that the sky is falling in the first place/
It’s worth noting that this is a strategic, or interpretive framework, for analysis of all the various sky-is-falling messages. Let’s practice. “Todd Park is leaving the Department of Health and Human Services; it will all fall to pieces!” (Um, no. Todd’s a savvy bird for sure, but there is a whole flock he’s intentionally helped, um ‘breed’ (hmm… have to think of a more appropriate extension of the metaphor here). Anyway, the promotion to US CTO should be interpreted the other direction – it lends credence to the movement’s validation at the highest levels – at the same time giving an opportunity for more folks to fly into key spots – natural maturation from revolution to paradigm (seriously, go read this, will you?). Okay one more example. Actually, no. You pick the next one and try – just go to the NYT, etc., and watch for a few days:
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Exclusive interview coming soon
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Anyway, to really spell it out for the folks who have trouble keeping up (i.e. folks like myself): expect to see numerous exchanges over the details, but the system will continue to march to the tune of pay-for-performance. And in that world, however the details are defined, having visibility into your performance and knowing what actions increase quality for your book of business, is paramount. The fact that details of the structure are still crystallizing doesn’t negate the value of this having this ability – actually it’s even more important now, precisely because the contours are still shifting – that’s exactly where you gain your advantage in any paradigm shift, particularly one based on a zero-sum dynamic.
Okay, and as long as we’re spelling things out, let’s finish up with the NYT and what it means that it’s giving its audience what it wants via various (and internally conflicting) sky-is-falling pieces.
The real question is not so much about the vested interests of the audience members strapping on their sky-proof crash helmets, but what typically happens to those birds when the paradigm actually changes. Note: Chicken Little is just simply the flip side of keeping your head in the sand. (Read that last sentence again).
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Watch out ahead
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If you’re a vendor, provider, payer, policy analyst or even M&A/equity-ish type person, as odd as it sounds, adopting the sky-is-falling narrative actually helps you sleep at night – it gives you ‘cognitive rest’. You don’t have to do the hard work of really thinking through what change would mean, much less putting together anything besides a pro forma plan – and best of all you can avoid action and public failure – refraining from pulling the trigger or making your bets; no need to specifically put your chips on the table and spin the proverbial Wheel ‘O Health Care to bet on the market.
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Also known to make appearances in outcomes analysis
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You won’t get fired – and you’ll look reasonably savvy and get to dismiss folks espousing this ‘silliness’ in meetings. Not too bad!
But the funny thing about this paradigm change, the specific move from fee-for-service to pay-for-performance, is that sooner-or-later, if the shift does take place, if P4P really ‘sticks’, then your value from merely offering your opinion/service won’t be enough. Ultimately you and your position will be judged on performance. (“Oh, frick… now I get it. No, no, no – that isn’t happening.”)
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Actually, this is about security
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But frankly you shouldn’t play not-to-lose anyway.
Far better to get out ahead of the train and take advantage of the zero-sum nature of this new game – we assure you it’s tough, but worth it.
And it’s not that tough, it just takes “intestinal fortitude” – and the trains rolling to the bottom of the Bell Curve (‘peer’-based performance and profit) are already boarding folks who see they sky falling – side by side with those who would use that narrative as ‘savant’ pretext to keep their heads in the sand.
Take The Road Not Taken – not only does it make all the difference – this time it leads to the top.
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Add this to your reading list for health care market analysis
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