199991 Changing politics of healthcare reform: The case of the demise of market driven solutions

Tuesday, November 10, 2009: 12:30 PM

David Barton Smith, PhD , Department of Health Management and Policy, Drexel University, Philadephia, PA
The real estate and investment banking driven financial crisis and resulting federal bailout was foreshadowed by similar death spirals of so-called market driven health care reforms. Five historical case studies involving: (1) market driven solutions to organ procurement, (2) publicly traded Independent Practice Associations (IPAs), (3) concierge medicine, (4) physician-owned specialty hospitals and (5) publicly traded assisted living corporations will be presented. They failed to live up to their promotional hype, not just in terms of the cream skimming/social justice critique often made of such entrepreneurial profit driven ventures but in terms of profitability. The combination of a public backlash and the unanticipated practical complexities of organizing and financing medical services doomed most of the ventures under each of these headings to failure. Publicly financed regional organ procurements services and donor-ship rather private organization and sale prevailed and are now widely accepted. A backlash against IPAs has eliminated most of the financial incentives providers had to deny services and has blurred any differences between them and traditional insurance products. Many concierge practices were victimized by the inevitable adverse risk selections that attended their higher priced quasi insurance product. Most physician-owned specialty hospitals have failed over concerns of surgeons over the safety and potential malpractice risks and the failure to attract sufficient volume. The largest publicly traded assisted living corporations now teeter on the edge of bankruptcy. The market has spoken and more universal publicly controlled models for the organization and financing of care are indeed the wave of the future.

Learning Objectives:
1. Describe the rise and fall five different market driven health care reforms (organ procurement, for profit IPAs, concierge practice medicine, physician-owned specialty hospitals and publicly traded assisted living corporations). Explain the ethical, organization and financial reasons that resulted in their failure.

Keywords: Access to Health Care, Financing

Presenting author's disclosure statement:

Qualified on the content I am responsible for because: Ph.D. University of Michigan, author of five books and more than thirty peer reviewed articles related to this topic.
Any relevant financial relationships? No

I agree to comply with the American Public Health Association Conflict of Interest and Commercial Support Guidelines, and to disclose to the participants any off-label or experimental uses of a commercial product or service discussed in my presentation.