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Health Care Reform Memo:
September 3, 2013

Deloitte Center for Health Solutions publication


The health care reform memos are issued on a weekly basis, highlighting news from the previous week's activities in the administration and implications for the C-suite and various stakeholder groups.

My take: Health Reform 2.0 will likely be more challenging than the current chapter 

From Paul Keckley, Executive Director, Deloitte Center for Health Solutions

This is Monday Memo number 243 and my last. Friday, I retire from my role as Executive Director of the Deloitte Center for Health Solutions in Washington, D.C.

This memo began, simple enough, as a recap of pending news about health care reform 14 months before passage of the Patient Protection and Affordable Care Act (ACA). It’s now circulated to more than 20,000 companies, schools, legislative offices and more. Then, as now, its intent has been to provide a weekly summary about the journey to health care reform and its implications for the industry’s policymakers, stakeholders and observers.

I never used the term “Obamacare” and steered the Memo’s editorial voice away from partisan-flavoring to encourage objective analysis of the health care system’s challenges. In many ways, the ACA is the centerpiece of Health Reform 1.0: it prompted unprecedented attention to the ways the health care industry operates and unparalleled changes in how the system operates. It’s the first chapter in transforming the U.S. health care system.

I believe the next chapter, Health Reform 2.0, will be more challenging than the current. Health Reform 1.0 addressed health insurance changes and sought to reorganize the ways the delivery system is structured spanning 2010-2018. But the ACA was premised on full economic recovery by 2014 and stability in world affairs.

Health Reform 2.0 is framed against the harsher reality that our economic recovery is slower than anticipated and world events will likely strain our defense resources and global trade efforts. In Health Reform 2.0, the issues will be bigger than health insurance exchanges and accountable care pilots. They’ll be about accelerating changes to extract more value from the system’s output. They’ll be about paying for care that’s necessary and limiting that which isn’t. And the bright light of transparency into every element of our system’s operations will bring intensified attention to secrets of the system.

Health Reform 1.0 got the ball rolling, but the reality is clear: incumbents in the system prefer gradual changes. After all, the status quo has worked well for the industry—profits for many have improved since passage of the ACA. And our longstanding sectarian silos remain largely intact. We still circle the wagons, always defending the status quo while cautioning against radical change.

In Health Reform 2.0, the market will force acceleration of changes that need urgent attention. The market—employers and consumers—will force the system to resolve its intramural tensions—between insurers and providers, primary care and specialty physicians, government regulators and industry operators, innovators and risk takers ready to test new solutions and regulators inclined to make it more difficult than what might seem reasonable. And the market will weigh in on the balance between profits and purpose, transparency about quality and costs, regulation, ethical business practices, consolidation, executive compensation, boards that serve independently and a host of other issues.

Health Reform 2.0 means every sector in the system will face uncomfortable changes and for some, redefinition of their role altogether. Discussions about the effectiveness of the health care system on main street will be more frequent, more compelling and unavoidable. Indeed, we’re on the cusp of an Occupy Health Care movement in this country because the health care system has fallen short in responding to the needs and values of its market. While many in the health care system have prospered even since the passage of the ACA, increased numbers of consumers and employers have fallen under the weight of its costs and the ranks of those without coverage is at all-time high. That’s the context for Health Reform 2.0.
Some thank yous…

I am grateful for the opportunity to have led the Deloitte Center for Health Solutions for the past seven years as Health Reform 1.0 became reality. The Center’s founders—Bob Campbell and John Bigalke, former leaders of the government and health care industry practices in Deloitte—saw the need for industry research and policy analysis that spanned traditional sectarian guardrails to probe solutions to the industry’s issues of high costs, variable quality and unequal access. Through primary research and policy analysis, the Center’s focus was to bring objective cross sector insight to issues and prompt discussion in the c-suites and board rooms based on our studies. We were successful. With the support of Deloitte’s client account teams serving health care clients in state and federal agencies, health insurers, hospitals, medical device and biopharma manufacturers and distributors and investors in the industry, the Center participated in more than 1,000 c-suite briefings in those seven years. The frontline account teams in Deloitte are its strength—committed to serving clients with distinction and true partners with the Center.

I appreciate the 85 folks—the reviewers, editors, graphics and web design professionals and the communications team—that took my weekend prose and got them to your inbox each Monday so you could start each week with a short recap of the last. What started innocently with Jennifer Bohn, Chief of Staff for the Center and me became a significant team effort under her guidance.

I am indebted to the incredible team of analysts and researchers with whom I’ve worked in the Center and the solid, dependable support I received from the Center’s chief operating officer, Jennifer Bohn and our “queen of first impressions” Karen Phillips, Executive Assistant. They were with me for the entire seven years and give character to the Center team. I will miss the team deeply and the steadiness Jen and Karen provided to the team’s work.

And most of all, I am deeply grateful to my family who loaned me to D.C. and to Deloitte for this adventure. Travelling 200 days a year and spending weekends writing doesn’t lend itself to normalcy. They stood by me, knowing my passion—bringing honest discussion to thorny health care issues—was fulfilled as a part of the Center team.

I am not leaving the industry, just stepping out of Deloitte. I will continue to teach, research, write and speak. The myths and misinformation in Health Reform 1.0 have contributed to the mounting problems facing the industry and fundamental issues not addressed in the ACA will need to be addressed in the future. The current system evolved over 80 years. Medicare just celebrated its 48th birthday, so transformation in this industry will not result overnight. But it’s clear a new set of pressures will impact the industry as the market demands more value and is growing impatient.

I started my career in health care working in the operating room at Erlanger Medical Center in Chattanooga, Tennessee in high school. Along the way, I have worked as a health plan CEO, academic medicine faculty and independent director for investor-owned health care companies. Never in my 35-year career have the stakes for the future of the industry been so high and never has there been such tension in the system that negates honest pursuit of solutions. It’s not about bad people: it’s a flawed system and it’s the system that will be the focus in Health Reform 2.0.

I want to be part of that pursuit and I know the team in the Center for Health Solutions shares that passion.

So the Memo will continue in a new format and on a different day—Tuesdays. Stay tuned and thank you for allowing me the opportunity to be a scribe in your Health Reform 1.0 journey.

Paul Keckely
P.S. I can be contacted at Continued best to all.

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