Darden Conference: Big Changes Coming to Health Care

31 October 2012

Though the long-term effects of health care reform are still murky, the health care landscape in the United States will change significantly, with ongoing consolidation of health insurers and hospitals, the influx of more patients into the health care system, and a growing demand that people take responsibility for their own health.

A panel of four experts made those predictions Friday, 26 October, at the University of Virginia Darden School of Business as part of the 2012 Darden Health Care Conference titled “What Does Health Care Reform Mean for ME?” The conference was hosted by Darden’s Health Care Leadership Club.

The featured speakers included Dr. Paul Matherne, the J. Francis Dammann Professor of Pediatrics and vice chair for clinical strategy and program development at the University of Virginia Health System; Steve Arner, senior vice president of the Carilion Clinic; Owen Hunt, associate general counsel for Anthem Blue Cross and Blue Shield, and Anna McKean, executive vice president of Strategic Initiatives, Health Diagnostic Laboratory Inc.

Panelists spoke about the effects of the Patient Protection and Affordable Care Act, which was signed into law 23 March 2010 by President Barack Obama. The law, which is bringing sweeping changes to the country’s health care system, will be phased in over a number of years. Health care coverage will be required for all citizens by 2014.

The outcome of the law will be felt on many fronts.

“Expect a wave of consolidation of health plans,” says Owen Hunt. “The economies of scale will force consolidation over time.” Hospitals will also consolidate or align to cut costs.

Hunt said the entry of the formerly uninsured into the health care system, coupled with an aging population, will be challenging, especially since the number of physicians won’t increase. “Where we’re going to fall short is at the primary care level,” he warns.

The reforms will also require employees to have insurance coverage either through employers or a state or federal insurance exchange — a kind of insurance marketplace where coverage can be bought by individuals and small businesses. Those exchanges are scheduled to open in 2014.

That could change the face of the workforce. Arner predicts that “as those exchanges become more robust, you’ll no longer need an employer for insurance.” That could mean more and earlier retirements and allow more people to start their own businesses. “I think that’s exciting.”

Dr. Matherne said academic centers will face new funding problems as traditional sources of revenue used to pay for the uninsured go away, though he believes “the business of medicine is medicine, but it’s a business. We can improve outcomes and decrease costs.”

Dr. Matherne told Darden students at the conference that, “I think the opportunity for entrepreneurship is phenomenal. You just need to find innovative ways to apply nonmedical solutions to medical problems.” The medical field itself is sometimes blind to answers, he says.

HealthCareConference2012Also looming is a growing belief that patients should take care of themselves. “The demand on the patient is coming,” says Dr. Matherne. “It’s going to be a whole different ball game.” That demand, for example, may mean that patients with lung problems will have to stop smoking and those with diabetes may need to lose weight to be treated.

“It’s going to be a huge problem,” says Dr. Matherne. “You have to go back to the start and educate people. There may be separate rules for high-risk patients who brought it on themselves.”

Arner said “care coordinators” will be needed to talk to and educate high-risk patients. Though expensive, the coordinators will save money in the long run.

McKean echoes those concerns. “Who is responsible for your health?” she asks. “Increasingly the responsibility is being driven back to the patient.” McKean’s business — with more than 7,000 physicians using its services — provides preventive-focused healthcare, which she says is the model for the future. “We focus on cardiovascular disease and diabetes. You beat it one patient at a time.”

She urges the Darden students, who will lead and start companies, to “create a culture of health in your company.”

Arner said preventative medicine is the future. “We have an amazing health care system for acute episodes, but we need to figure out how to have less of these acute episodes.”

In the end, consumers don’t pay anywhere near the full cost of top medical treatment. “That’s the biggest misconception. That it doesn’t cost anything,” says Dr. Matherne. “But you don’t pay the real cost. Imagine if you were paying only one percent of a car’s cost. I’d be driving a Maserati. Red.”

About the University of Virginia Darden School of Business

The University of Virginia Darden School of Business delivers the world’s best business education experience to prepare entrepreneurial, global and responsible leaders through its MBA, Ph.D., MSBA and Executive Education programs. Darden’s top-ranked faculty is renowned for teaching excellence and advances practical business knowledge through research. Darden was established in 1955 at the University of Virginia, a top public university founded by Thomas Jefferson in 1819 in Charlottesville, Virginia.


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Sophie Zunz
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Darden School of Business
University of Virginia