“You know the old adage, ‘Change is good. You go first,” quipped AAMC President Darrell Kirch at the association’s annual meeting in early November. While that may have described the attitude of academic medical centers (AMCs) in the past, Kirch says he’s finding more people are willing to go first.
There may be no bolder example of this shift than Massachusetts General Hospital’s decision to convert all of their major contracts from a fee-for-service contract to global payment contracts. While other systems are working on how to maximize profits in the current system, Mass General President Peter Slavin, M.D. believes that we need to “head-on” address the most serious health care problem our country is facing—the rising cost of health care. “I think we need to take a leadership role and chart a path for how we can deliver better and more affordable care to the American people,” says Slavin.
His strategy? Take the risk and then force the innovation. Slavin believes that putting the system at financial risk to care for hundreds of thousands of people in the Boston area will force them to rethink and transform their primary care system, how primary care relates to specialty care and how they care for people in the hospital.
“There is a sense of urgency to try to get out in front of this tidal wave, and I think the more urgently and aggressively we move ahead, the better chance we have to do this in a methodical, thoughtful way rather than a slash and burn sort of way,” says Slavin.
"Our addiction to high-margin business is toxic, dangerous and wasteful," says Paul Grundy, the global director of health care transformation at IBM and adjunct professor in the University of Utah Department of Family and Preventive Medicine. It’s also short-sighted because Grundy believes that if the value proposition you offer to employers and patients isn't competitive, quite simply, they'll take their business elsewhere. Grundy believes that it’s people like Slavin who stay ahead of the tidal wave that will survive the inevitable transformation. "Over the next couple of years, there will be winners and there will be losers,” says Grundy. “And though it may not be easy to see now, I believe we will see new leaders emerge who win not by surviving the storm, but by changing the game."
TRANSCRIPT
I think academic medical centers have been among the most innovative part of our health care system. But I think they're going to have to innovate even more aggressively and in different ways than they've previously.
Clearly we've been the places where we've made progress against heart disease and cancer and melanomas and other diseases that are affecting our patients and the community. But I think we also need to head on address that's arguably the most serious health care problems our country is facing, and that's the rising cost of health care.
A lot of institutions that are ducking that problem, trying to make as much hey as they can out of the existing system. But I think we need to take a leadership role and chart a path how we can deliver a more affordable care to the American people.
One of the ways we're innovating in this arena is basically to force the innovation. We've converted all of our major contracts from fee-for-service to global payment contracts who are now at risk for hundreds of thousands of people in the Boston area. And that's forcing us to look differently at how our primary care system and how primary care relates to specialty and to care patients in the hospital.
So there's a sense urgency to get ahead of this tidal wave. And I think the more urgently aggressively we move ahead, the better chance we'll have to do this in a methodical thoughtful way, rather than a slash and burn sort of way.
President - Massachusetts General Hospital