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The Private Sector Is Shaking Up the Health Care Industry


Companies are starting to get proactive about reshaping the health care market, and the results could be revolutionary. The Times reports on new efforts GE is taking to drive down costs for its employees. Its current big push is for so-called “medical homes”:

Over the last few years, G.E. has pushed for the creation of so-called medical homes, in which an individual medical practice closely coordinates a patient’s care by having access to all of the patient’s medical records. […]

In Cincinnati, there are beginning to be grudging signs of success. Early results are promising: patients enrolled in medical homes had 3.5 percent fewer visits to the emergency room and 14 percent fewer hospital admissions over the four years from 2008 through 2012. G.E. plans to ask an outside firm to do a more detailed analysis.

The concept of “medical homes” is still largely untested, and even if it works as well as GE hopes, it won’t be a cure-all for our system’s ills. But more important than the particular experiment GE is employing right now is the fact that bigger employers with large market clout are increasingly invested in helping to actively transform the health care system. Different companies are experimenting with different models, from GE’s medical homes to private insurance exchanges:

“I don’t know anybody who isn’t trying almost everything,” said Helen Darling, president of the National Business Group on Health, which represents employers providing benefits. “We’re going to see a lot of activity in the next couple of years.”

Right now companies are taking the old, familiar approach of throwing everything at the wall and seeing what sticks. Because they’re private entities, they conduct these kinds of experiments without throwing the whole system into crisis if things don’t work out. And if any ideas do work, they could become models for future health care reforms.

This renewed interest in cost savings couldn’t come at a better time. The health care crisis now calls for all hands on deck.

[Photo of stethoscope and money courtesy of Shutterstock.]

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  • ljgude

    Yup – that is the key to reforming US healthcare. The medicine isn’t the problem – America’s health outcomes are about the same as other 1st world countries. What is different is that the US spends about twice as much to achieve those results as other countries – 16% to 17.5% of GP. Switzerland for example spends 11% with a private health insurance system. Here is a bar graph from the Peter G Peterson Foundation showing the problem:

    • Kevin

      How much of this is driven by high wages in the US health care system? My understanding is that US physicians, for example, have a much higher income relative to the national average than do those in Western Europe. Still this is unlikely to account for the majority of the difference.

      • ljgude

        Sorry to be slow to respond. A bad case of flu. From what I’ve seen salaries are not the major problem. The biggest single cause seems to be price gouging by hospitals. Steven Brill’s Bitter Pill; Why Medical Bills are Killing Us is the best analysis I’ve read. It is behind a paywall at Time, but it is available in PDF here:

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