Forty years ago John Fraser’s graduate school professors warned that the health care industry was about to change.
Today, after all that time, Fraser said, a health care overhaul is perhaps 15 percent underway, but has the momentum to turn the industry 180 degrees — switching from incentives that promoted high-volume care to incentives that reward wellness and penalize poor care.
The impact won’t be just on doctors and hospitals, Fraser said, but also on the average person, who will have more financial motivation to stay healthy.
In an interview leading up to his Dec. 31 retirement, the CEO of Methodist Health System said the change is overdue and likely will be “pretty far along the road” in another five or six years.
“It is a time of revolution and evolution in health care,” said Fraser, a native of St. Louis who, along with his wife, Debbie, has adopted Omaha as home. “But I think it’s necessary and appropriate.
“Government and private payers have finally woken up and want to incent us to provide care differently, and there’s nothing wrong with that.”
No matter what happens with the Affordable Care Act or other laws the federal government may pass, he said, hospitals soon will be viewed as cost centers rather than money machines, and that means big changes.
“The health care industry is like any living organism,” said Fraser, who is 63. “It responds to incentives,” and in the 1960s health care needed to meet the growing demand for services, especially with the enactment of Medicare.
Under any payment system, he said, doctors try to keep their customers healthy. But decades of financial incentives work the other way: Someone with an illness brings in more money than a healthy person who visits a doctor a few times a year. MRIs bring more revenue than diagnosis with an informed touch.
“Our reimbursement was based on volume, and of course it grew and overgrew,” Fraser said. “The whole point of health care reform is to redefine the incentives for the industry so that we are incented to keep people healthy to begin with, to keep them out of the hospital and to keep them well, which is perfectly appropriate.”
Already some physicians and hospitals receive bonuses if their patients’ health measurements — blood pressure, body mass, blood sugar, infections, readmission rates and other data — show…