A Note on Health Care Reform and Children’s Health Care

The affordable care act was designed in part to reduce health care costs.   A principal strategy is to bring the issue of cost per “unit” of care to the table of decision-making in a much more transparent way, while shifting the burden of costs more directly to those receiving the care (the patients) and to those delivering the care (the providers). The presupposition is that if the patients share more of the cost they will utilize fewer health care resources and if the providers share risk they will make health care delivery more efficient and safe, with less overuse and waste.  With price as a more prominent driver of consumer choice, prices will drop in a competitive market place.  Disruptive innovations will be encouraged.

So, what does this mean for us involved in delivering children’s health care?  It means that in addition to improving health increasingly more effectively and on a larger scale, we must also lower the cost per unit of care.   Preventive care, subspecialty care, treatment of acute and chronic illness, procedures, and many of the things we do to help our patients, we must do at a lower cost. Preventable harm and complications, reworks and duplications of care, and inefficient use of people and resources must be minimized.

We have been rewarded on volume (fee-for-service) for a very long time. Our systems, processes, and the way we think are all geared towards producing high volumes.  Many physicians’ compensation is largely dependent on this one measure of work. This has created a way of doing things that will make it difficult for many health care organizations to do well in the new order of health care, whenever that might arrive.

And therein lies the conundrum, when will value based purchasing truly arrive?  Some are thinking it will be years and its best to not change things until it arrives.  What do you think Children’s Hospitals ought to do to position themselves for the future?

I for one think children’s hospitals need to lead the way.

One thought on “A Note on Health Care Reform and Children’s Health Care”

  1. Presumably the ACA will have less impact on children’s hospitals than on adult providers, and the impact will lag. I for one am not sure that children’s hospitals need to radically alter their care delivery processes or their business models. Children’s hospitals within a hospital will face significant challenges if their parent network isn’t prepared for the coming changes.
    Free-standing children’s hospitals in states where there is increased medicaid enrollment and an increased number of children insured through the exchanges will likely benefit from the ACA without making a lot of modifications to how they do business.

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