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Duke Clinical Research Institute - Health Industry …...Prescription: A Disruptive Solution for...
Transcript of Duke Clinical Research Institute - Health Industry …...Prescription: A Disruptive Solution for...
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Provider Perspective
Kevin Schulman MD, MBA
Professor of Medicine
Gregory Mario and Jeremy Mario Professor of Business Administration
Associate Director, Duke Clinical Research Institute
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http://www.nytimes.com/2012/12/01/business/a-
hospital-war-reflects-a-tightening-bind-for-doctors-
nationwide.html?pagewanted=all
http://www.charlotteobserver.com/2012/09/24/3549634/prices-soar-as-hospitals-dominate.html
http://www.charlotteobserver.com/2012/12/17/3728676/as-doctors-flock-to-hospitals.html
Recent Press on Providers
Novant-owned Presbyterian
Matthews Hospital - 35%
gross profit margin in 2010
Health costs are
rising…where hospital
mergers allow the larger
systems to use their size to
negotiate higher prices.
-Susan Voss, Iowa Insurance
Commissioner
http://www.charlotteobserver.com/2012/04/21/3189821/nonprofit-hospitals-thrive-on.html
http://www.nytimes.com/2013/01/06/business/despite-new-health-law-some-see-sharp-rise-in-premiums.html?pagewanted=all
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Provider Prices in North Carolina
Change in
Utilization1
Increase in Cost2
Individual -2.3% 14.4%
Group -3.8% 39.5%
Source: BCBSNC 2007-2010 claims data
2007-2010 Change
1 Utilization based on inpatient admission per 1000 members
2 Cost based on allowed cost per admission
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Market Concentration
Health Aff (Millwood). 2011 Jul;30(7):1265-71. doi: 10.1377/hlthaff.2011.0220.
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Market Concentration
Source: Avik S. A. Roy; MAHP Annual Conference, 11-19-2011
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Strategic Impact Over Time
Alan Sager and Deborah Socolar, Boston University; 2010
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Why Are Our Costs So High?
Mission complexity
Facility complexity
Process complexity
Management complexity
Service line complexity
Business process complexity (third-party payment)
Complexity and infrastructure drive overhead costs
Clayton M. Christensen, The Innovator's
Prescription: A Disruptive Solution for
Health Care, 2008
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What’s New: Physician Organization
Source: Medical Group Management Association
Note: Practices not owned by hospitals or physicians are owned by a variety of groups including
the government, universities, and insurers.
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Policy Approaches
Iglehart (2011); NEJM; Vol 364; No 3; pp 198-200
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ACO’s: Problems or Solutions
JAMA Vol 306; No. 6; pp 602-603; 2011
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The Transformation Gap
Today: Fee-For Service Tomorrow: Capitation