Increasing competition forces HIP of New York to reduce staff.
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Competitive market forces may do more to ensure healthcare quality than government regulatory attempts. Independent research can show that healthcare quality drives profits and increases market shares. Greater market shares increase volumes, and increased volumes can lead to lower costs per case. These improvements may better position providers for payer contract negotiations, especially as payers are encouraging providers to assume more risk. Ultimately, however, a public more informed about costs and outcomes may be necessary for market forces to reduce national average costs per case.
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In this second part of a two-part column, Dr. Ruffin provides greater detail on seven key factors that he believes will govern the operations of integrated systems. Successful systems, he says, will be those that attract and retain physicians, have disciplined governance, integrate care through sharing of information among system elements, conserve capital, ensure strategic growth, control costs, and are proficient at processing information. It is important to understand, he says, that, in the movement from a fee-for-service payment mechanism, in which the various elements of the health care field bill for their services independently and according to rules designed for their benefit, to an integrated system, in which such independence can only lead to chaos, very substantial changes will be required in the governance of our health care institutions and organizations.
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In recent years, healthcare providers have expended a great deal of energy on merger, affiliation, and acquisition activities. Before entering into any of these arrangements, however, healthcare executives should answer the question: "Does my organization need to join with others to survive and thrive?"
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