Hospital Impact—A skeptic's view of healthcare transformation

Amazon.com building
Amazon's new venture with Berkshire Hathaway and JPMorgan Chase has gotten a lot of buzz, but will it really disrupt the healthcare delivery system? (Robert Scoble/CC BY 2.0)
Kent Bottles
Kent Bottles

Some say that a skeptic is merely an optimist with experience. 

One person who fits that bill is Alan J. Burgener, a full-time skeptic and provocateur who is one of the smartest and most insightful healthcare leaders I have encountered over several decades.

Burgener was not impressed with my latest Hospital Impact post, which concluded that the Amazon-Berkshire Hathaway-JPMorgan Chase venture and the proposed CVS-Aetna merger might actually disrupt our dysfunctional healthcare system.  

In the following email exchange, I get to the heart of why:

Bottles: Do you think these recent collaborations will disrupt healthcare?

Burgener: You can color me skeptical when it comes to the prospects for transformational change in healthcare delivery in the U.S. I'm now old enough to have lived through the breathless hype associated with the introduction of Medicare's DRG-based payment system in the mid-1980s (the first in a career-long string of developments that promised to change healthcare as we know it); the gatekeeper HMO era; the capitation/risk-based contracting era; the primary care practice acquisition frenzy; the hospital merger/acquisition era (join a big system or you won't survive); the integrated delivery system craze (everyone should look like the utopian Geisinger or the Cleveland Clinic); the volume-based to value-based purchasing era; and the most recent push for quality, outcomes and population health as drivers of provider change. 

RELATED: Should insurers be worried about Amazon’s entry into healthcare?

All have created small ripples—and many outsized overreactions from the true believers—but none have led to anything resembling transformative change in healthcare delivery or hospital management. Every time a new fad comes along, I feel like Charlie Brown running up to kick the football, only to have Lucy pull it away once again. 

Bottles: What do you think hospital leaders should be doing during this time of uncertainty?

Burgener: The people who get all worked up about the transformative effect of each new initiative, like the Amazon-Berkshire Hathaway-JPMorgan venture—most of whom are consultants and/or pundits—have a strong self-interest in keeping hospital leadership on edge and therefore in perceived need of the wisdom of the so-called experts. The fact is, the only things that demonstrably contribute to long-term success in healthcare organizations are the extent to which senior executives go to work every day focused on these five questions:

  1. What can we (meaning my organization) do to improve the quality, outcomes and safety of the care we provide?
  2. What can we do to improve the efficiency and effectiveness of clinical processes in order to lower the cost of care and be better stewards of scarce resources?
  3. What can we do to enhance the experiences our patients and families have when they seek our services?
  4. What can we do to improve the health and well-being of the broader community we serve, whether that be a neighborhood, city or state?
  5. What can we do to make our organization a more stimulating and vibrant environment for everyone who works here?

Bottles: Why are you so dismissive of the conventional wisdom that healthcare is ripe for disruption?

Burgener: I'm not the least bit dismissive of the need for transformative change in the American healthcare system. The system as it is structured and financed today is clearly not sustainable in the face of relentlessly increasing costs, an aging baby boomer generation, and a simultaneous decline in social and economic equity. My skepticism is not dismissiveness but rather a recognition of the long-standing effectiveness of the system's resistance to significant change. This resistance isn't merely a function of self-interest or the natural human preference for maintenance of the status quo. There are a whole host of fundamental realities surrounding American healthcare that support perpetuation of the current state of affairs over any forces that purport to bring about disruptive change—even when many in leadership positions agree that such change is necessary.  

If you want to write an interesting follow-up to today's post, you should consider asking and answering this question: Why do so few of the seemingly disruptive changes in healthcare actually produce any significant or sustainable change? There are a lot of plausible answers to that question, including the fact that the American healthcare "system" is anything but a system. Instead, it is a constellation of overlapping loose-knit confederations of semiautonomous assets, many of which have more characteristics of cottage industries than they do of highly developed systems or markets. 

Another factor is that well over 50% of the country exists in geography in which there is, for practical purposes, a local monopoly on the provision of healthcare services—not the competitive market that underlies the assumptions about provider behavior made by the supply-and-demand folks. Yet another factor is that most healthcare services are not perceived as "discretionary" by those seeking the services, namely the patients. Thus, they don't make rational market-based decisions when they seek care. 

The list goes on and on. Ultimately, it's much more important for commentators and health policymakers to understand these "market realities" of healthcare in the U.S. than it is for them to understand the inner workings of the latest alleged disruptive innovations.

Kent Bottles, M.D., is a lecturer at the Thomas Jefferson University School of Population Health and chief medical officer of PYA Analytics.

Alan J. Burgener is a former senior hospital administrator at the University of Iowa Hospital and Clinics and currently is an independent healthcare consultant located in Iowa City, Iowa.