Audit and consulting company KPMG has published a report on the transformation of the health care system, which was and is occurring without regard to any health care “reform. (KPMG Report) The report identifies six key drivers of this change, which the firm believes is accelerating. The drivers include the shift from fee-for-service payment for health care services to value-based purchasing and episode or global payments; ongoing consolidation of providers, particularly the inclusion of more outpatient providers in hospital-based systems; new sites and methods of service, such as online and retail or on-site clinics; greater engagement in health care by at least some consumers and better tools to support that engagement; a renewed focus on prevention and wellness; and unspecified new market entrants, which sound more like new kinds of vendors with analytic or other tools.
KPMG believes health care organizations will need to step up their planning capabilities to effectively prepare for all the changes. Primary issues to address in strategic planning include addressing the likelihood of shrinking revenues; figuring out how to be appropriately compensated for encouraging wellness and prevention; and enhancing the understanding of the risk a firm may have, and how to manage that risk profitably. KPMG believes the excessive spending in the United States for health care, especially for the elderly, is a key opportunity and challenge. The piece is relatively non-specific and seems largely to be a marketing effort for consulting, but it does help spur some thought. Health care, particularly the provider segment, has traditionally been very poor at planning and anticipating change. The will make life very difficult for many organizations, because it seems almost certain that the pace of change will continue to accelerate.