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David Dranove, Kellogg’s Walter J. McNerney Professor of Health Industry Management; Josh Soven (U.S. Dept. of Justice), Katy Pinter ’05 (The Chartis Group) and Kevin Cassidy ’08 (Blue Cross and Blue Shield of Illinois)

2012 Business of Healthcare Conference

2012 Business of Healthcare Conference

New health law challenges payers, providers to lower costs, improve outcomes, says expert panel

By Cheryl SooHoo

11/28/2012 - In late July, the Supreme Court upheld the controversial Patient Protection and Affordable Care Act. In early November, President Obama got four more years to work on his healthcare plan. Now, said experts at the 2012 Kellogg Business of Healthcare Conference (subtitled, “Transformations in Healthcare”), it’s time for key stakeholders, from providers to payers, to adapt quickly to a changing health care landscape.

‘Readiness is the question’
The recent election has placed health policy at top of mind for everyone in the health care sector as well as employers looking to contain the cost of health benefits, said David Dranove, Kellogg’s Walter J. McNerney Professor of Health Industry Management. Dranove moderated a panel discussion on “The Implications of Recent Political and Policy Developments” at the Nov. 17 conference, which brought industry leaders and academic experts to the James L. Allen Center.

Panelists agreed that, from a payer perspective, transitioning from a business-to-business to a business-to-consumer model will require immediate work on setting affordable pricing and creating new products. In early 2014, the federal government hopes to roll out state-developed Affordable Insurance Exchanges, which would individuals to purchase qualified health benefits plans directly. “Readiness is the question,” said panelist Kevin Cassidy ’08, the vice president of national accounts at Blue Cross and Blue Shield of Illinois. Cassidy pointed to the foot-dragging of some states to adopt the concept and the complexity of launching the public exchanges as challenges for insurers and state governments in the months to come.

Incentives for lower-cost care
Another provision of the new health law, Accountable Care Organizations (ACOs), has providers scrambling to shape themselves into the go-to ACOs in their markets. A voluntary network of physicians and hospitals, ACOs agree to provide Medicare patients a variety of services — from office visits to long-term care. For lowering medical costs and improving quality of care, ACOs receive financial incentives.

Katy Pinter ’05, a principal at consulting firm The Chartis Group, said that about 80 percent of her clients are sold on developing ACO architecture. During the past year, Pinter has observed large health systems coming together to build material scale and hospitals and physicians more closely aligning. Providers are also looking to partner with payers to offer products such as health networks, Pinter says.

Before the panel discussion, keynote speaker Emad Rizk, president of McKesson Health Solutions, shared his thoughts on the transformation of care management and healthcare delivery.

The conference featured a total of six panels, with topics including international emerging-market access, healthcare consumerism and accountability, and “design thinking” in health care.