"The Sanity Code" – How the New Era in Healthcare Mirrors the NCAA
As we enter a new era in healthcare, one looks for similar industry’s that have gone through radical transformations. As we move into a Government run, heavily regulated, Healthcare environment – there are striking similarities between the “new era” in Healthcare and the NCAA.
1. Regulation and Fear of Sanctions: The American Affordability and Reinvestment Act has created the most complex set of guidelines and regulation ever placed on Healthcare. This has created an incredible amount of uncertainty and confusion. Added with multiple priorities such as Meaningful use, ICD-10 and EHR, there has never been a more tenuous time in Healthcare. Similar to the Post World War II era of the NCAA, where stresses to the systems based on huge student growth from the GI act, television revenue on the rise, and huge financial gains were achieved by the universities. The NCAA created the “Sanity Code” − adopted to establish guidelines for recruiting and financial aid – which ultimately failed to curb abuses.
2. Violations of the System: The more the regulation, the more there will be gaming of the system. The NCAA was plagued in the 1980’s with unscrupulous agents, greed, and high profile rules violations. Medicare fraud today adds billions of dollars to the total Healthcare spend in the United States.
3. Consolidation and Mergers: Just as the NCAA has evolved in the most recent past to SUPER CONFERENCES with no geographical consideration. The sizes of market and revenue opportunity are the key drivers for conference alignment. Similarly, Healthcare is in the process of consolidating in the very same manner creating SUPER SYSTEMS that cross geographical boundaries focused on driving revenue. Small independent and regional entities will struggle to compete in the new era.
4. Recruitment and the Talent Wars: The key to winning in the NCAA is to recruit the best available talent and win the talent wars. In the same way, the systems and facilities that can attract the best talent are assured of success. In healthcare, the talent pool is dwindling. Nowhere is the ongoing war for talent in the United States more evident than in the critical shortage of Registered Nurses. The looming physician shortage has created aggressive physician recruitment practices, which are similar to star athletes in college football, such as Johnny “Football” Manziel, getting national acclaim for where they choose to attend college.
The reality is that the NCAA has been a flawed model and has undergone even more expansive regulation that when it was first created. Lawsuits challenging the NCAA continue to press on, many ending up in the Supreme Court. You can be assured that the new era of Healthcare will have many similarities as The American Affordability and Reinvestment Act is challenged in years to come. The huge expansion of healthcare to an estimated 32 million more users, looming human capital shortages, and the aging baby boomer generation will create stresses never seen before. As the NCAA found out in the Post World War II era – Healthcare in the new era will find there is no such thing as a “Sanity Code”.