Healthcare: A changing industry

Kevin Kussman


• Pharmaceutical cost per person per year: $983.1 U.S.; $495.4 OECD Avg.

• Healthcare as a percentage of GDP: 17.6 percent U.S.; 9.5 percent OECD Avg.

• Infant mortality per 1000: 6.1 U.S.; 4.3 OECD Avg.

• Doctor Consultations per year per capita: 3.9 U.S.; 6.4 OECD Avg.

Changes in our region’s healthcare

Many of the factors that create our high healthcare costs are not issues the healthcare industry can directly impact: population life style, high pharmaceutical costs, uninsured populations, complex insurance billing, heavy litigation and the resulting need for defensive medicine.

Hopefully, right about now you are ready for some good news – and there definitely is some good news locally. A majority of public and private organizations involved in health and mental healthcare in our region are cooperating to accomplish the triple aim in healthcare of:

• Better patient outcomes

• Healthier populations

• Lower healthcare costs for everyone

Patient Centered Medical Homes

A key concept many of our local providers are moving toward to accomplish the triple aim is that of the Patient Centered Medical Home (PCMH). The Patient Centered Medical Home is a care concept, not a home, or even a building. The PCMH:

• Is a team based system of care that is centered on the patient

• The patient has a direct and on-going relationship with a personal, primary care physician

• The personal physician works with the patient to direct and coordinate care

• The physician treats the whole person, mental and physical, and in all life stages

• Care between organizations is well coordinated and integrated

• Holds itself accountable for the critical goal of quality, safe healthcare and patient outcomes

• Access to care is enhanced, with alternative and innovative scheduling

I’ve seen care groups that are very close to being a full Patient Centered Medical Home and the results were impressive from a patient perspective. The PCMH saves overall cost by being more proactive in treating the patient. Chronic conditions are better managed to reduce complications and the need for hospitalization. The coordination of care between providers reduces mistakes, lowers the chance a patient will get “lost,” and increases the probability of a positive outcome.

The difficulty with PCMHs is that they are focusing on the whole person and achieve their goals when a patient is healthy – and that is not what insurance companies pay for. The good news is there are active discussions right now between the groups (including insurance providers) on how to make the model work. After all, all parties benefit with lower costs and a healthier population.

Accountable Care Organizations

Accountable Care Organizations (ACOs) are something we are likely to start seeing here in the not-too-distant future. Focused on the Medicare eligible population, ACOs are a diverse group of healthcare providers that together create a team that manages the Medicare funded healthcare for individual patients. The patient benefits because the care is seamless and there is less of a chance of an error in the system. The system lowers costs by ensuring timely care, while reducing duplication and unnecessary costs.

The financing for ACOs is different than for PCMHs. The Centers for Medicare and Medicate Services (CMS) provide the ACOs with a set amount of funding to manage the health of a population. Financial risk is shifted from the tax payers to the providers who then have the incentive to run a very cost effective system. Any cost savings is shared between the providers and the CMS. The ACOs are measured on quality metrics around patient experience, care coordination, patient safety, preventative health and at-risk population/frail elderly health.


The healthcare industry has started the multi-year process of restructuring itself using innovative programs to achieve the triple aims of better patient outcomes, healthier populations and lower costs for everyone. The move to PCMHs and ACOs are but the first of many changes in healthcare we will see over the next decade. It is difficult to predict what the healthcare industry will look like in ten years, but I think it is safe to say it will be significantly different from what we see today.

Kevin Kussman serves on the Southwest Washington Regional Health Alliance Board of Directors. He is also the associate vice president of corporate and continued education at Clark College. He can be reached at

{jathumbnail off}