A big shout out to Dr. Don MCanne for his Quote of the Day post Friday for today’s topic, and a belated shout out to him for his post last Tuesday about the gains from the ACA being reversed. See my post, ACA Gains Reversing.
This time, Don alerts us to the impact the new health economy disruptors will have and what it might mean for the push towards single payer health care.
Last month, the PwC Health Research Institute (HRI) released a report analyzing the new health economy landscape as more and more companies pursue acquisitions of companies in the insurance, pharmacy benefit management, health care services and retail spaces.
In the last six months, the report states, there has been an explosion of unusual deals between companies such as CVS Health buying Aetna, Cigna buying Express Scripts, UnitedHealth’s Optum buying DaVita Medical Group (Kidney disease and dialysis), Albertsons agreeing to merge with Rite Aid, as well as the much highly publicized partnership between Amazon, JP Morgan, and Berkshire Hathaway.
Naturally, these aren’t the only deals that have occurred. Last year, 67 deals occurred in the US health services market, including payers and providers, the report adds.
The value of these deals increased 146% over those in 2016. The US health care industry, the report states, is undergoing seismic changes generated by a collision of forces: the shift from volume to value, rising consumerism, and the decentralization of care.
The HRI identified four new archetypes of companies engaged in this new health care economy:
• Vertical integrators — CVS & Aetna, Optum & DaVita, Cigna & Express Scripts
• Employer activists — February 2016, 20 US companies form Health Transformation Alliance (HTA) and developed tools to help its members cut employee healthcare costs. In January, Amazon, JP Morgan and Berkshire Hathaway partnered to lower costs and improve employee satisfaction
• Technology invaders — Amazon selling over-the-counter medical products, offering discounted access to Prime service, Apple’s newest operating system allows users to access parts of their EHRs on their phones
• Health retailers — CVS, Walgreens, Walmart, Albertsons and others using their network of store locations, consumer insights, national and global supply chains, and national (and sometimes global) branding to attract consumers looking for affordable, convenient care and goods
The HRI report recommends that all healthcare companies should make the following moves:
• Invest in customer experience
• Plan for a broader workforce
• Focus on price
This is how Don McCanne commented on this report. He wrote that Arnold Relman, like Dwight Eisenhower did about the military-industrial complex, warned us about the medical-industrial complex, but did not realize how intense the disruption would be in health care that the HRI report discusses.
According to Don, we are about to see a takeover by the disruptors who “have a leg up on many established health players in understanding consumers and tailoring experiences for them.”
The disruptors are “positioned to address price through greater scale, ownership of middlemen and a wider grip on the US health system value chain.”
If you don’t believe Don, then read what Jamie Dimon, the CEO of JP Morgan said, “To attack these issues, we will be using top management, big data, virtual technology, better customer engagement and the improved creation of customer choice (high deductibles have barely worked). This effort is just beginning.”
This is exactly what the Waitzkin et al. book describes when explaining the methods used by the medical-industrial complex to control and direct the American health care system for power and profit of the members of the complex.
Dr. McCanne observes that it is almost as if the physicians, nurses and other health care professionals and the hospitals and clinics in which they provide their services have become a peripheral, albeit necessary, appendage to their wellness-industrial complex that is displacing our traditional health care delivery system and its more recent iteration of the medical-industrial complex.
In other words, the physicians and nurses and other professionals have become proletarianized, and the hospitals and clinics merely the places where the medical-industrial complex derives its power and profit from.
Dr. McCanne posits the following questions as to what the health care system would look like once the transformation is well along:
• Once the silos of the health care system are flattened, how will health care be financed?
• Will there still be networks?
• Cost sharing barriers such as high deductibles?
• Will it be possible to fund this expansive model of the wellness-industrial complex through anything remotely resembling an insurance product, especially when the insurers are being amalgamated into what was formerly the health care delivery system?
• And now that the plutocracy is in control, how could we ever remove the passive investors that extract humongous rents through the wellness-industrial complex?
• And what about the patients? Did we forget about them?
It is obvious from his comments that this new health economy is going to be more problematic for providing universal health care to all Americans and will only make things worse. His Rx is to begin now to move to a single payer, Medicare for All program, and not worry about what has passed.
Smart diagnosis and prescription.