Sticks and carrots

Stephen Berger, the chairman of Odyssey Investment Partners, brought 10 years of health reform experience to the conversation. He believes that although the idea of DSRIP is commendable, the realization of its goals is hardly a sure thing.

"We have been talking for what seems like forever about the need to move away from a brick and mortar acute care system and create an integrated system built around primary care," said Berger, "Crain's has hosted lots of these events and yet here we are again."

Berger believes that in order for real change to take place, there have to be not only financial incentives, but statutory power to implement it. He said that meaningful change requires a program with the right combination of sticks and carrots, or to put it another way, "structure, money, and political will."

Berger said although everyone agrees that change is needed, nobody wants to step forward and be, for example, the hospital that gets downsized. Institutions, he said, typically expect that kind of sacrifice to come from somewhere else. "You can't just pay lip service. To succeed you have to internalize the recognition that the health care world will look very different in five or 10 years," said Berger. Even with billions of dollars on the table, change will not come easily.

Change is expensive

Jim Tallon, president of the United Hospital Fund of New York, has been working with Medicaid for decades. He described it as an overall successful program but says rising costs continue to create challenges. Over time, experience has informed legislators about what works and what doesn't.

"You don't go back to the options of cutting people, prices, or benefits," said Tallon, "That's the tradition of the Medicaid debate that a lot of states are still struggling with but we don't go back to that." Instead, Tallon said, we need to finance the long term demands of the system by improving its efficiency.

Tallon equated those challenges to another challenge faced in health care. "What's the biggest cost of introducing electronic health records? It's the productivity time that is lost as people adjust to the new system."

He also raised concerns regarding the chain of command as PPS groups emerge. Part of the legislation around the waivers will permit for overriding specific longstanding rules in the interest of making the health care system more efficient. Some of these rules have been in place for 30 years and, although many of them may be related to the problems that need fixing, Tallon wonders how people will determine who is in charge under those circumstances.

Healthcare Act