“Where Have You Gone, Marcus Welby?”

According to the 2012 edition of AHA Hospital Statistics, hospitals now employ 212,000 physicians, reflecting a 12-year, upward trend. Since 2000 the number of physicians employed by hospitals has soared by 32 percent.

This trend appears to be irreversible. A recent report by MedSynergies, Inc. and HealthLeaders Media reveals that 70 percent of American hospitals and health systems plan on hiring more physicians in the next one to three years and that 76 percent of hospitals and health systems use a full-employment, medical-staff model.

There are at least three forces taking the market in this direction.  One, many physicians are crying “uncle” and deciding that the independent practice of medicine is no longer worth the long hours, administrative burdens, and ongoing downward pressure on reimbursements.  These physicians are capitulating and seeking the relative safety that a hospital system provides.

The second force driving consolidation is the lax scrutiny being applied to hospital-physician combinations.  Unlike the past, state and federal regulators are being more accepting of combinations that in the past would have invited antitrust scrutiny.

The third, and most powerful force favoring consolidation, is the future outlook for reimbursements from government and private payers.  One needs look no further than the recent actuarial estimate of the Medicare Trust Fund. 

According to A Summary of the 2011 Annual Reports, Social Security and Medicare Boards of Trustees, “Medicare’s HI Trust Fund is expected to pay out more in hospital benefits and other expenditures than it receives in income in all future years...The share of HI expenditures that can be financed with HI dedicated revenues is projected to decline slowly to 75 percent in 2045, and then to rise slowly, reaching 88 percent in 2085. Over 75 years, HI’s actuarial imbalance is estimated to be equivalent to 21 percent of tax receipts or 17 percent of program outlays.”

Stop for a moment to think about what you just read.  Unless fundamental changes occur, the Medicare program will spend more than it collects in revenue for each of the next 75 years!  Unless we choose to continue ignoring reality, higher Medicare premiums, eligibility cutbacks --including means testing--and lower reimbursements are a given, and overt  rationing is a real possibility.

Health systems read the same reports the rest of us do, and know that they can’t print money.  Therefore, they must recreate themselves as fixed fee providers of bundled care.  This is hard to do unless you control physicians, one of the primary means of health care production.

This is really what the Accountable Care Organization movement is about – nudging health systems to redefine their business models to create savings by operating at a lower cost.  While the savings are shared today, the shared savings model is just a warm up for the hard decisions yet to come.  Better to learn the rules of the new game with the government’s help and support now, than wait until later when the learning curve is much steeper and the penalties for failure are much greater.

These changes represent a huge transformation in business orientation and organizational culture for physicians and health systems.  While physicians will enjoy being relieved of many of the administrative burdens of owning and managing a practice, they will adapt less easily to the loss of freedom and independent decision making that must certainly accompany their integration into a health system.

For their part, health systems are being challenged to transition from service-driven revenue centers to output-focused organizations in which quality and cost are equally important.  They will do so by engaging physicians in an employment setting that is much different from the past model in which hospitals competed against each other for revenue-generating practitioners

There’s a saying I’m fond of, that goes like this: “Culture eats strategy for breakfast.”  The hardest work to come will not be getting the strategy right, but managing the change it requires.

The Battle of the Bulge – America’s Obesity Epidemic

"Some people are born to fatness. Others have to get there."
Les Murray

The news lately has not been kind when describing the state of American health.  Last week, I shared a report that detailed the dramatic rise in diabetes worldwide, and in particular, within the United States.  Issued by the Trust for America's Health (TFAH) and the Robert Wood Johnson Foundation (RWJF),  F as in Fat: How Obesity Threatens America's Future 2011 reveals the continuing and worsening rise in obesity rates across the country.  According to the report, adult obesity rates increased in 16 states in the past year and didn’t decline in any state.

Twelve states now have striking obesity rates above 30 percent. Four years ago, only one state was above 30 percent.  To understand just how out of shape we’ve become, the state with the lowest obesity rate would have scored the highest rate of obesity in 1995!

The obesity epidemic continues to be most dramatic in the South, which includes nine of the 10 states with the highest adult obesity rates. States in the Northeast and West tend to have lower rates. Mississippi maintained the highest adult-obesity rate for the seventh year in a row. Colorado has the lowest obesity rate and is the only state with a rate under 20 percent.

Obesity is closely linked with other, severe health problems, most notably diabetes and high blood pressure. These, in turn, are precursors to other health risks.  The report shows how rates of diabetes and high blood pressure have also climbed dramatically over the last two decades.

Since 1995, diabetes rates have doubled in eight states. Back then, only four states had diabetes rates above 6 percent.  Now, 43 states have diabetes rates over 7 percent, and 32 have rates above 8 percent. Twenty years ago, 37 states had hypertension rates over 20 percent. Now, every state is more than 20 percent, with nine over 30 percent.

Obesity is nothing, if not epidemic. This year, for the first time, the report examined how obesity has surged over the past two decades. Twenty years ago, not one state had an obesity rate above 15 percent.  By contrast, today, more than two out of three states -- 38 in total -- have obesity rates over 25 percent, and just one has a rate lower than 20 percent.

Since 1995, when data was available for every state, obesity rates have doubled in 7 states and soared by at least 90 percent in 10 others. Obesity rates have grown fastest in Oklahoma, Alabama, and Tennessee, and slowest in Washington, D.C., Colorado, and Connecticut. What’s noteworthy is that obesity rates haven’t declined in any of the 50 states since 1995, the first year of this continuing study.

Obesity is complicated.  Its cause can often be as straightforward as too many calories stacked up against too little exercise.  Obesity can also manifest psycho-social factors that are harder to address.  Whatever the cause, individuals who suffer from obesity can find it as hard to conquer as cancer. 

We’ve been arguing quite a bit over the past few years about health care in the U.S. and who’s to blame for its high cost.  Depending on your point of view, you may believe that insurance company profits are the culprit, or that an inefficient delivery system is to blame.  Regardless of how important these factors are, it’s hard to ignore the reality we see face every morning when arise from a sound sleep and look in the mirror. We’re just not as healthy as we used to be. And we’re taking care of ourselves with far less attention than we used to.

For most of us, it’s not hard to see why we’ve become so overweight.  We walk and exercise less.  More than ever before, we consume more high-calorie, low-nutrient foods.  We lead more stressful lives than we did in the past and have difficulty de-stressing ourselves.  It’s not hard to imagine a lifestyle in which each of us gains 5 to 10 pounds each year.  Before you know it … well, you get the picture.

Two factors account for the unprecedented growth in obesity. First, obesity is a cultural issue.  We all live within a larger, cultural fabric that carries with it norms that pervade our thinking and influence our decisions about weight gain. 

Second, obesity is an individual health issue that carries with it huge, health-care cost ramifications. Each one of us will make progress on obesity only by mustering the individual courage it takes to tackle the characteristics of modern life that make obesity so hard to avoid and so easy to accept.