The Long Arc of Healthcare Transformation in America

The United States is only slightly halfway through its healthcare transformation, claimed Mike Leavitt, founder and partner of Leavitt Partners and the former governor of Utah, during a general session on the first day of America’s Health Insurance Plans Institute & Expo, held June 7-9, in Austin, Texas.

Leavitt alleged that the United States is only 25 years into a 40-year healthcare transition, and any changes that happen today should be placed into that context. America faces an economic imperative, which is causing a conflict because the 2 potential outcomes—losing compassion and losing economic leadership—are both considered unacceptable.

“While we’re in a period of some uncertainty in this chapter, this is not just about what’s happening now; it’s about a long drama that is playing out over a long period of time,” Leavitt said. “And we have to find a solution to this.”

The debate that is happening in Washington, DC, is about more than just repealing and replacing the Affordable Care Act—it’s about not giving up on quality, not giving up on access, and also not giving up on the country’s economic leadership. “All of this debate is about that equation,” he said.

The solution, Leavitt added, is that America is going to invent a “uniquely American health system.”

As this system gets developed, there are a series of questions that will need to be answered. First: how do we pay for it? The country has been transitioning from fee-for-service to value-based payment and Leavitt doesn’t expect that to change.

“There is nothing happening in Washington that would cause me to believe that the need to do this is less or the commitment to do this is less,” he said.

He showed a slide with the transition across the country to value-based care and how each year since 2011 the number of patients covered by these agreements has grown more and more and is only expected to continuing growing.

“The North Star in all of this is that movement to value,” Leavitt said.

The next question is how will risk be distributed: to rate payers or taxpayers? This is a “fundamental philosophical” issue in America. The most timely example he referenced was a state bill that was before the governor of Nevada to establish Medicaid for all. The final product will likely be a unique mix of both.

The final question revolves around government’s role. “That is the question that is at the heart of the healthcare debate,” Leavitt said. Is government going to be the organizer or the operator of a health system? And which government? Should it be state or federal?

“This is a very significant amount of change and all of you, and we as a country, have to ask ourselves how we will deal with this change,” he said, asserting that there are only 3 options:

1. Fight it and die
2. Accept the fact that we’re going through this change and we might have a chance
3. Lead it and prosper

Leavitt suggested that the third option is where organizations and countries succeed. “It has to be a proactive, long-term shift,” he said.

During a moderated Q&A at the end of his presentation, Leavitt addressed the issue weighing on most minds in the audience: the American Health Care Act or what legislation might come out of the Senate. He believes that what happened in the House of Representatives, and the resulting bill, was simply a necessary “legislative dance” that allowed the House Republicans to “check a box” and get the legislation to the Senate.

“I think there will be a bill, personally,” he said. But he doesn’t think the changes made by a Republican bill will be as profound as they might have promised a few years ago.

“Republicans have dined out on this phrase [repeal and replace] for 3 elections—they can’t go back,” Leavitt said.