Oncology Stakeholders Summit, Spring 2016 - Episode 20
Bruce A. Feinberg, DO: We talked before about the 3 different kinds of economic models. One could argue, as other countries come to the conclusion, that only the single payer system is really able to remove the fragmentation and create an economic model that allows for driving down cost and creating value.
Alan Balch, PhD: Yes.
Bruce A. Feinberg, DO: If that is the underlying initiative here, is that a bad thing?
Alan Balch, PhD: Consolidation to what end? I think motive is very important. In a lot of cases, consolidation is not necessarily a mechanism for reducing costs—it usually ends up increasing price.
We’ve seen that as airlines consolidate, it usually leads to economies of scale for the business. But, it doesn’t necessarily translate into cheaper prices for the consumer—the patient. The healthcare marketplace is what we were talking about before, and I’m going to take my organizational hat off and put [my] political comments hat on.
Part of the schizophrenia of the system that we have is that it’s not built on any solid rock of any market—whether it’s government controlled, whether it’s regulated utility, or whether it is more free market or mixed economy. So, we’ve got this hodgepodge of different things and it’s chaos.
Bruce A. Feinberg, DO: Right.
Alan Balch, PhD: Sometimes you have solutions that are more market-oriented. Sometimes you have solutions that are more command and control. Sometimes you have solutions that don’t really make sense in any particular way—they’re kind of left to interpretation (like the way you’ve interpreted Part B, potentially). I think that’s one of our big problems. You have to pick a place and say, “We’re trying to design.” “We want this to be the fundamental economic bedrock of this sector.” And until we decide that, I think we’re just going to continue to have this chaos.
Now, from a patient perspective, I think there could be some benefit—depending on the consolidation and to what end. If it’s consolidation to accommodate payment reform, it could drive costs down or at least create a better environment for delivering quality and value (as opposed to fee-for-service). You do get a better care coordination model, potentially, and all of the benefits and the upsides to consolidation. If that’s the purpose, then in some ways it could be better for patients.
Oftentimes, though, when these things happen, they don’t end up [working]. It seems to be, continually, that patients in every case are losing—particularly the low-income patients. None of these conversations really resonate down to that level. If anything, it’s [not] going to bring reform or change to them, because we’re not talking about how to change value and delivery of service to the patient population that is the most ill and the most in need.
So, a lot of this is kind of lost in translation for them. I don’t have a good answer. I think we welcome payment reform and we welcome this conversation about value because it does open the door to rethinking healthcare system payment and delivery; and how to align incentives against what we’re trying to achieve, ultimately, in terms of what we’re trying to deliver. But, I don’t think we’ve determined, yet, what it is that we’re trying to deliver. What is the goal of healthcare? What are we trying to achieve with healthcare? Until we have that answer, you don’t have a central organizing principle around which to organize delivery, payment, et cetera.
James Gilroy: I’ll just say that in order to figure that all out, you do need all stakeholders. When you talk about “back dooring” and “agenda,” if you don’t have providers at the table when you’re developing a new way of paying providers, or you don’t have patient advocacy at the table when you think about patient care being the central component of what you’re actually trying to deliver on, I think there’s reasons that there’s some backlash around the CMS (Centers for Medicare & Medicaid Services) experiment right now.