OPINIION -- January 29, 2013 -- Clouds around health care transformation lifted as election results became clear. Health care changes have huge—but still hidden—ramifications for the entire nonprofit community. Without deliberate preparation, many nonprofits may experience unpleasant surprise and declining financial support.
Why will health care transformation affect the larger nonprofit community and not just groups related to health care? To get to an answer, let’s follow the money.
Health care transformation is about creating networks of providers working together. These networks, called accountable care organizations (ACO), will ultimately replace today’s system of fragmented care. To make health care transformation work, we must do two things: 1) find lots of cost savings in the clinical side of care, and 2) help people to get and stay healthy to limit future costs.
Breaking the cost curve
To make this transformation successful, we must break the cycle of increasing health care costs. By way of comparison, if food costs increased as much as medical costs since the 1930s, we might pay $108 for a dozen oranges or $80 for a dozen eggs at the grocery store today. There are many reasons to believe that we can effectively cut health care costs.
Oregon is leading the way in health transformation, according to Secretary Kathleen Sebelius at the US Department of Health and Human Services. And she is not the only one who expects Oregon to serve as amodel for the nation. In Oregon ACOs, called coordinated care organizations there, have been given $1.9 billion in federal money to get to work. Supported by additional state funds, the CCOs will be held accountable for a number of outcomes or results. The CCOs get to spend the money on things that arebased on evidence and that do the job—not a private wish list or simply billing for medical services provided.
Of course, CCOs will start by doing things that cut the most cost quickly. The state’s largest CCO,Health Share of Oregon (HSO), for example, may focus on expensive emergency room visits and reasons for avoidable hospitalizations. Some savings will be accomplished more easily than others; many will be one-time wins.
Excerpted with permission from the Stanford Social Innovation Review.To read the rest of this story, click here.
Kevin Johnson believes there is undiscovered power in partnerships among nonprofits, the public sector and passionate donors. He works with visionary leaders to help them get the resources they need.
