“It is not the strongest species that survives, not the most intelligent, but the most responsive to change.” Charles Darwin
Today’s big idea focuses on change and how recent news accounts regarding the big three business coalition may be a tipping point to the long awaited transformational reform of healthcare. We will look at those issues and how these changes might shuffle the traditional healthcare career paths and job titles.
People too often look at their careers through rose colored glasses without taking into account major changes that could effect their lives. And that is certainly the case in healthcare where regulatory and market reforms, which includes consolidation, have introduced significant disruptions that will only become more profound.
The primary drivers of this disruption are the cost of healthcare, the rapid growth of Medicare, and outcomes that are frequently not reflective of the price we pay.
There is probably not going to be a grand plan or “bargain” for meaningful healthcare reform from the hollowed halls of Congress, a body Mark Twain called the “grand benevolent asylum for the helpless.” Not now, or any time in the foreseeable future.
That conclusion, or some variation thereof, is probably one reason Messrs. Buffet, Bezos and Diamond, Berkshire Hathaway, Amazon and JP Morgan Chase respectively, have come together to focus on the admirable and sufficiently challenging goal of addressing America’s healthcare crisis — exceptionally high costs for the quality and effectiveness of the service. Another way to look at what these three companies are saying is this: “Healthcare! Pay attention, you are making us uncompetitive in the global economy and we aren’t getting much for what we pay an awful lot for.”
Because Congress cannot effectively tackle anything this big, this complex and this political, the challenge will fall to others. I hate to use the hackneyed phrase free market since the federal government exercises so much indirect control as the largest payor for healthcare services, but the “market” is where this will play out. The real burden for fixing healthcare — reducing costs, improving quality, effectiveness, access, and enhancing patient safety – is falling to three groups: businesses, healthcare providers and insurers. Corporate American and Main Street businesses have the strongest economic incentive to attempt to drive change. Healthcare providers have the least, many analysts argue.
So what does this have to do with career management? Quite a lot.
Even with industry consolidation, healthcare providers — hospitals, physicians, home care and others who deliver the care — must start now (and many are) looking at transformational redesign of how care/service is delivered. We must achieve more for much less. As the pace of Medicare spending on the Baby Boomers accelerates, this goal will become much more urgent.
Industry consolidation, a reflection of the pressures of the need to transform healthcare that some see as an important, first step strategy, may be necessary to enable healthcare providers to compete more effectively for payor contracts, but the fact that the overwhelming majority of these mergers result in higher costs, not lower, means that the leaders of the larger systems will have much work to do to be competitive or even to survive with lower levels of reimbursement.
As businesses strive to pay less for healthcare so they can compete more effectively, and as the federal government reels in what they spend on Medicare and other healthcare related programs in a must-do effort to control growing deficits, there will be less money flowing into the system. I hope you will forgive me for this fundamental lesson of economics, but less money means fewer jobs. For more than 40 years, healthcare was considered a recession-proof industry where the risk of layoffs was much lower than in other industrial sectors. Boy, has that changed!
One system CEO I know said recently that he would have to take out $500 million in costs over the next 10 years. I remember thinking at the time, I hope inflation remains under control.
This transformation that will challenge us to consider what we do, how we do it and how much money we can use to do it, will give birth to some important career opportunities.
If you are in healthcare there will never be a better time to think about the future of your career.
Here are four areas that I believe will provide talented and skilled executives with career and financial growth opportunities.
While that is but one perspective, whether you are a traditionalist or a creative innovator, it is food for thought.
© 2021 John Gregory Self