Table Of ContentHealth 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
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© 2019 by Taylor & Francis Group, LLC
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International Standard Book Number-13: 978-1-1386-2654-6 (Hardback)
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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
Routledge
Taylor & Francis Group
711 Third Avenue, New York, NY 10017
© 2018 by Taylor & Francis Group, LLC
Contents
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 Foreword ..............................................................................xi
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 Preface .................................................................................xv
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 Author ................................................................................xix
copyright material has not been acknowledged please write and let us know so we may rectify in any
future reprint.
SeCtion i inDUStRY DYSFUnCtion: itS Root
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 CAUSeS AnD eFFeCtS
hereafter invented, including photocopying, microfilming, and recording, or in any information
storage or retrieval system, without written permission from the publishers. 1 It’s Not the Future We Used to Have ........................3
For permission to photocopy or use material electronically from this work, please access www. The Old Future ...................................................................4
copyright.com (http://www.copyright.com/) or contact the Copyright Clearance Center, Inc. (CCC),
The Curves of Health Care .................................................6
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 The Root Causes of Industry Dysfunction .........................7
photocopy license by the CCC, a separate system of payment has been arranged.
The Economic Human and the Next Curve .....................10
Trademark Notice: Product or corporate names may be trademarks or registered trademarks, and are
Fast Forward: A New Future .............................................12
used only for identification and explanation without intent to infringe.
This Book: A Look Ahead .................................................13
Library of Congress Cataloging‑in‑Publication Data
References ..........................................................................15
Names: Abendshien, John, author.
Title: Health care in the next curve : transforming a dysfunctional industry 2 Health Care’s Perfect Storm ...................................17
/ John Abendshien.
The Gathering Forces ........................................................18
Description: Boca Raton : Taylor & Francis, 2018. | Includes bibliographical
references. What’s Wrong with This Picture? .......................................20
Identifiers: LCCN 2018009308 | ISBN 9781138626546 (hardback : alk. paper) |
ISBN 9781315228136 (ebook) Costs on an Upward Trajectory .........................................22
Subjects: | MESH: Health Care Sector--economics | Economics, Medical | Health
Heading toward a Spending Ceiling .................................23
Care Sector--trends | Insurance, Health--economics | Delivery of Health
Care--economics | United States Is Rationing the Default Scenario? .....................................24
Classification: LCC RA410.53 | NLM W 74 AA1 | DDC 338.4/73621--dc23
LC record available at https://lccn.loc.gov/2018009308 References ..........................................................................25
3 What Happened to Health Insurance? ...................27
Visit the Taylor & Francis Web site at
http://www.taylorandfrancis.com A Perfectly Dysfunctional Model ......................................28
and the Productivity Press Web site at Affordable Access: Still No Fix ..........................................30
http://www.ProductivityPress.com
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
4 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
5 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
6 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
7 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
8 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
9 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
