Essential or obsolescent? The future of big health systems and maybe, behavioral health specialists | Behavioral Healthcare Executive Skip to content Skip to navigation

Essential or obsolescent? The future of big health systems and maybe, behavioral health specialists

April 4, 2013
by Dennis Grantham, Editor-in-Chief
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If big health systems go the way of the mainframe computer, what's to keep behavioral health from following?

“I’m always telling people that there are ‘three elephants in the room’ when it comes to changes in healthcare system,” said Dale Jarvis, principal of Dale Jarvis & Associates LLC at the opening of the 13th California Institute of Mental Health (CIMH) Behavioral Health Information Management Conference in San Diego this week.  

These elephants-- things that few wish to acknowledge—can be seen as parts of larger efforts that two groups—those in medicine and those in behavioral health—hope have the power to transform healthcare, yet are seen by Jarvis as signs that both are vulnerable to disruptive changes in the future.  

First, there’s a tunnel vision by some in medicine who believe that medical cures alone are the solution to the healthcare crisis,” said Jarvis. “Then, there’s the effort of behavioral health and human services providers to move outside their service silos, an effort that is inadequate and is moving too slowly.  And third, there’s the inability on the part of both groups to come together to create integrated and accountable care systems.”

While both of these groups continue their own standoff, Jarvis asked the question, “So what is it that determines good health anyway?” He pointed to a pie chart and explained that:

·         10% of health is supported by health care interventions

·         20% is social and environmental.

·         30% of health is due to individual genetics, and

·         40% of health is due to individual behavior.

When he compared this image of what determines health to where four key players appear to be investing, he suggested that the stage is set for disruptive change. He maintains that “there’s a whole picture here of what contributes to health, and those who figure it out first—how to use that whole picture—will be in position to disrupt everyone else." He asked the audience to consider the likely arguments of an entrepreneurial new competitor that approaches a state's governor, with eyes on managing millions in capitated premium dollars, and promises a new method of healthcare delivery that can deliver huge savings. Sooner or later, Jarvis maintained, a governor is going to act on that information. 

Battle lines drawn

“There is,” Jarvis asserted later, “a battle underway for control of health dollars.” The four centers of power who are engaged in the battle include:

1) Large legacy hospital systems or rather, “health systems” who are buying up all the resources that they can,

2) Health plans, which are working to reinvent themselves to work with risk-bearing ACOs and health homes of the future,

3) Large non-healthcare entites, including venture capital and equity firms that are attracted by the huge care dollars that are bound to accompany a 30% increase in the number of insured health system participants in the near future, and,

4) Non-hospital providers (communities, counties, physicians) who are also forming accountable care organizations.

Going forward, Jarvis maintained, “moneys will not flow to counties, for example, but to ACOs who are at risk for the health of the population.  Today, large legacy health systems hold most of the healthcare dollars and are busy acquiring all of the healthcare resources that they can,” said Jarvis. Yet despite this apparent strength, Jarvis compares big health systems to the to the “mainframe computers” of the ‘70s, which continued to grow larger and more expensive literally up to the time that they were made obsolete by an entirely new generation of computing technology.

Jarvis also asserted that “health plans as we know them will no longer exist. He predicts that, with the rise of accountable care organizations, health plans will leverage their traditional strengths in managing information to take on two new roles: as administrative service organizations (ASOs) serving ACOs, and as “reinsurance” companies that stand behind the ACOs as they strive to “push costs down to the production floor—to the delivery system” and control costs at that point.

In this new healthcare approach, the future of behavioral health depends on demonstrating its ability to help contain medical costs and improve outcomes. Jarvis recommended that behavioral health organizations become recognized as "centers of excellence" that are indispensable to the succes of the larger medical system.