Turmoil in the Healthcare System

Why is the healthcare system of the United States in such turmoil? One expla- nation is common to the entire developed world: rapid technical change. The pace of medical research and development is breathtaking, and the public’s desire for better therapies is manifest. These demands challenge healthcare managers to regularly lead their organizations into unmapped territory. To make matters worse, changes in technology or changes in insurance can quickly affect healthcare markets. In healthcare, as in every other sector of the economy, new technologies can create winners and losers. For example, between 2000 and 2007, Medicare payments to ambulatory surgery centers more than doubled. Medicare changed its policy, and growth slowed down. What appears profitable today may not be profitable tomorrow if technology, competition, rates, or regulations change significantly.

The Affordable Care Act (ACA) has resulted in a wave of innovations by providers, insurers, employers, and governments. (See chapter 6 for more detail.) Which of these innovations will succeed is not clear. In addition, some healthcare organizations will thrive in the environment of the ACA, and some will fail. The passage of the ACA appears to have been transforma- tive, but its repeal might not undo the changes it led to.