Important changes in the health care system are being tracked by the Center for Studying Health System Change, established and funded expressly for this purpose by the Robert Wood Johnson Foundation. Center staff recently summarized what they learned in interviews with top leaders in 15 national professional organizations and trade associations about the changes underway in the health system and the efforts of their members to adapt (Corrigan and Ginsburg 1997). We summarize below the major findings they reported.
Center staff identified five themes running through the interviews which they published in Health Affairs: (1) large private purchasers heavily influence change by their efforts to slow the rising cost of health care but change also reflects fundamental shifts in medical practice and in the use of technology; (2) the health care system is still in transition, and the considerable geographical diversity in markets is likely to remain; (3) the system simultaneously is experiencing positive change with the growth of managed care and competitive markets (e.g., care coordination and increasing clinical and operational efficiencies) and adverse effects (e.g., siphoning of dollars to investors); (4) the system still faces fundamental problems, such as the large uninsured population, and potential new problems, such as erosion of the clinical foundation of care as reflected in the doctor-patient relationship; and (5) the majority of leaders perceive that reliance on marketplace dynamics should continue, since efforts at federal health reform in their perception failed dismally.
Center staff also reported that different stakeholders have both similar and different concerns. Among purchasers, large employers are much more active than small or medium-size employers in pushing change, and national/regional companies differ from local business coalitions in their interest in practice standardization versus community-based improvements. Purchasers and consumers are frustrated about the limitations in comparative data on health plan performance and outcomes. Insurers and health plans are enthusiastic about managed care’s potential value, particularly in forming a clinical information infrastructure to enhance health outcomes. But insurers and plans also feel challenged to develop stable relationships with physicians. Hospital concerns are shaped by the extensive horizontal integration and downsizing occurring in different ways in a variety of markets and industry segments. Academic medical centers are concerned about how core functions (education, research, and patient care) are challenged by the competition introduced by managed care that is reducing the ability to cross-subsidize. Physicians and other provider groups perceive that there is a movement into multi-specialty group practice that is better able to invest in infrastructure and share risk. They also perceive the role of practice management companies to be increasing and they are concerned about the effects of capitation. That is, increasing consolidation within the system is leading to new organizations involved in managing health care as well as arrangements that involve physicians in the risk for the cost of care.
According to Center staff analysis of their interviews, the future system envisioned by leaders includes large national organizations and smaller market players, and insurer- and provider-sponsored entities. The interviews also suggest that there are pressure points throughout the system. These include the uninsured, underinsured, and safety net providers; the elderly and the disabled and how they are integrated into managed care; and the potential erosion of public confidence in the health care system. These pressure points show how system change affects people and entities of different types and with different policy interests. Demand for information from consumers is perceived to be growing, though serious limitations exist in available information.
The perceptions Center staff identified with association leaders are consistent with prominent academic and popular perceptions elsewhere in the literature. For example, a 1996 Business and Health summary of the state of the American health care system highlights the shift from inpatient to ambulatory care settings, the massive economic reconfiguration of the health system as a function of hospital downsizing and emerging oligopolies like Columbia/HCA, and changes in academic medical centers. The summary also includes a managed care perspective arguing for the importance of data to monitor and improve provider performance in a managed care environment (Halvorson in Business and Health 1996). The perceptions of Wall Street health security analysts also parallel the perceptions of others. They predict continued rapid growth of managed care and greater development of physician organizations; however, they see hospitals remaining a key and powerful player, with the nonprofit sector continuing to have considerable community-based and political support (Ginsburg and Grossman 1995; Center panel 1997). Miller and Luft (1994), Gold et al. (1995), and Gold and Hurley (1997) highlight the considerable complexity in emerging managed care models and products. For example, managed care plans offer multiple products, their provider networks are structured in complex ways, provider entities are given major responsibility for managed care functions, and there is considerable variation in all of this across markets. Finally, the proliferation of products (e.g., HMOs, PPOs, and point-of-service products) with similar brand names but sometimes different features lead to further confusion and complexity.
Similar trends are perceived to exist outside the acute-care sector. For example, Kane (1995) notes the blurring distinction between home and institutional care and between providers in these two areas. Shaughnessy et al. (1995) observes the growing interest in outcomes and effectiveness of such care in diverse settings when needs are growing and costs are a concern. Freeman and Trabin (1994) highlight the use of firms that provide “carved-out” managed behavioral health care in contemporary models of managed mental health care delivery. These entities often represent new structures that are influencing patient flow and delivery of care.