Healthcare, a “Remarkably Inefficient, Unproductive” Industry

Bodaken recommended that the healthcare industry focus on the 1 percent of patients who account for 30 percent of healthcare costs. A move in that direction, he said, are 50,000 providers in Sacramento who took on the challenge of forming accountable care organizations (ACOs) with shared risk to get costs down to zero.“The one challenge is devoting the amount of money that we’re going to have to devote to information technology to support automation, which is absolutely necessary, not only so providers can communicate to make sure they know what the evidence base is to provide care, but also so members and patients can look on a portal and see what the history of this physician doing this type of procedure is and how much it costs at hospital A versus hospital B,” he said.  He said that this initiative would broaden to include 20 different ACOs over the next three years.

“Those progressive physicians and hospitals will be more than happy to be paid on an outcomes basis because they in fact think they can make as much or more money,” said Bodaken. “They see it as a competitive advantage with those physicians who still want to be paid on a fee-for-service basis.”