Michael Leavitt on Retail Health Care

Former Utah governor tells health care professionals that reform is an econmic reality; changes must take place.


I think Americans understand that we have to have change. I think that until it begins or however when it becomes personal to them, like any change, it begins to be more difficult. But I think that American's understand that the system is going to change and they are buckling their chin strap to see how it will affect them.

The areas that I am focused on now are essentially how can we drive more quickly? The concept of measuring value not volume and that isn't controversial any longer, but the implementation of it is and does begin to drive a lot of change that people are uncomfortable with.

The parable of buses, taxis, and limos basically says that there is a lot of ways to get from point A to point B and after all, what we are after is transportation in healthcare. After all, what we're looking for is good, quality care. The setting in which we get it, how fancy it is or how comfortable it is, in the context of convenience, it may be that some people will say, "I'm prepared to have a narrower network of choices for a lower premium." We've seen that begin to happen already. Those are choices that consumers can make. They can make them in any other area, and they can make them in healthcare as well.

I think that big change to the future is we are going to start to value both of those, cost and quality. As opposed to simply having access to unlimited amounts of care.

There are four basic entities or types of entities that I think are making competitive entries in the market. They are obviously hospital driven, doctor driven, insurance company driven, and a new group that I call strategic aggregators. These are unlikely entries into the market with people like Walgreens and CVS who have footprints on almost every corner and are beginning to turn parts of their retail stores into care centers. And I think we will begin to see them play much more pronounced and perhaps prominent role.

All four of those types of entities are looking to become what I refer to as a general contractor in medicine. I think that's the struggle that's happening.

We are now moving into a period where care is going to have to be much better coordinated and the question becomes in a coordinated environment, who is the general contractor and who is the sub-contractor and who is bearing the risk? And that's being redefined in every medical market in the country. No one has all of the competencies that are required.

If we look back 25 years and we looked at industries like the restaurant business or the hotel business, there were lots of independent hotels and restaurants. And now we have Marriot and Hilton and brands we know. I think health care will always be local. But I do think we will begin to see health care, particularly primary care, begin to consolidate into a series of brands that we're better familiar with and will compete on a more national or regional basis.

I'm probably more optimistic today that we're actually getting a handle on the problems of health care than I have been for some time. Because hard things are beginning to happen and people are having to make choices and they're working with certainty to get a handle on their costs. And that's not easy. It's hard. But hard things are happening and because hard things are beginning to happen my optimism goes up.