Global economic forces will compel the U.S. healthcare system to change the way it delivers care – whether the key players are ready or not, former Health and Human Services Secretary Michael O. Leavitt told an audience of about 700 healthcare CIOs Wednesday morning.
Leavitt, former governor of Utah, who served as HHS Secretary in the George H. W. Bush administration, today heads his own consulting firm, Leavitt Partners. He was in San Antonio, Texas, to speak to attendees of the annual fall conference of the College of Health Information Management Executives (CHIME).
“If we want to be the great nation we are, we have to accomplish this change,” Leavitt said. “You can fight it and die, participate and survive, or you can lead it and prosper.”
He acknowledged that change would be difficult. For 50 years, he said, the American healthcare system has been built on compassion.
“We want to live in a country where people are cared for,” Leavitt said. He proffered that the United States is beginning to see a new driver for reform – a catalyst he calls “global economic dispassion.”
Leavitt, who championed health information technology, connectivity and value-based purchasing when he served as HHS secretary, envisions a revamped healthcare delivery system that is networked and collaborative.
He recalled the mid 1980s when the personal computer emerged (Leavitt went out to Radio Shack to buy a TRS-80). In those days there was a lot of debate about whether the mainframe or personal computer was a better approach.
“Civil war broke out in geekdom,” Leavitt said.
There’s no doubt where Leavitt stands on which camp was right.
“A network (a group of networked PCs) is always superior in its adaptability and speed than a mainframe,” he said.
Leavitt pulled on examples from warfare and the airlines to make his point. The U.S. forces were tied up inn knots, he said by Al Qaeda’s small, well-networked army. On the airline front, he pointed to the Star Alliance, founded in 1997 by United Airlines, Air Canada, Lufthansa, Scandinavian Airlines and Thai Airways International. Within three years every airline in the world had joined one of three alliances.
“It takes a network to survive,” Leavitt said.
In healthcare, networks are already beginning to form, he said. Integrated care settings, with shared costs, are beginning to unfold.
He drew nervous laughter from the audience when he suggested that no one really knows what an accountable care organization (ACO) is.
“There is no general contractor,” he said. Multi-specialty clinics control the patients, but they have no brand, no brand, no access to capital way to aggregates lives. Hospitals may have branding and access to capital, but no experience in aggregating lives or managing risks. Insurers can manage lives and risks, but have not control over patients.
“There is a scramble to figure out who is going to commoditize whom,” he said. “Who the general contractor’s going to be will be answered in 350 separate markets. We’ll see competition.”
“In this paradigm, what happens to innovation?” asked an audience member.
Innovation has been integral to new molecules, new devices and new protocols, Leavitt said, adding, “We are creating a new category of innovation – and it’s all about finding value. The area of medical informatics and value will define new innovation.”
