by Mike Smith Nowadays, participants subjecting themselves to arduous military training are asked to swallow a capsule so medical personnel can continuously monitor their vital signs from afar. In some respects this capsule represents how technology will drive the design of our health care system in the future. No doubt these technological advances will significantly change our current health care delivery model, but they also have the potential to make health care more affordable and accessible, while maintaining quality.Currently, state officials in Vermont are moving in a direction of changing how providers are reimbursed for the care they provide from the current fee-for-service system—where providers are paid, or reimbursed for each service—to one where they would receive a global budget and be required to manage the health of their population to that budget number.Obviously changing the reimbursement system is a very complex maneuver. New management entities are being created such as Accountable Care Organizations (ACOs) that will attempt to centralize billing, payment, and health data. Health care institutions are also being asked to make organizational and operational changes that focus more on preventive care. These changes pose significant challenges.The first challenge is demonstrating that the new reimbursement system can be implemented effectively and efficiently. State government has not proven itself capable of implementing new and complex health care systems – and no one wants another expensive health care mess like Vermont Health Connect.Secondly, will disruption of the current system—by changing the payment method to health care providers—produce the desired outcomes? Disruption will be tolerated if the outcome is positive, transformative, and measurable. It is not clear that the all-payer model will meet the expectations of the large majority of medical consumers. It is quite probable the savings will not be significant enough to satisfy the serious concerns of Vermonters about their growing health care costs.Additionally, there are risks to local health care organizations. Vermonters are incredibly loyal to their local hospital and providers – their first concern will be how this change impacts the viability of their local health network and the economic impact of health care jobs in their communities.Vermont currently relies heavily on two large and dominant systems—the University of Vermont Health Network and Dartmouth-Hitchcock Medical Center—to meet its health care needs. Our state only has regulatory authority over Vermont health care institutions and practices. Dartmouth falls under the regulatory purview of the State of New Hampshire. These two institutions have been expanding to maintain their status and financial viability. On the other hand, the rest of the delivery system is made up of smaller hospitals and independent practices fighting for relevance and struggling to preserve their place and scope of services in an era of accelerated consolidation. When you have this sort of dominance by much larger institutions, the system as a whole is vulnerable to the business interests of the two dominant players. These two players are becoming “too big to fail,” even if they become too big to be efficient in the future.But, if you’re a fan of your smaller, local hospital and provider, it should be noted that the larger institutions don’t hold all the cards. Although regulators seem to favor the larger institutions, these institutions don’t enjoy the same intense loyalty many of the smaller, local hospitals and independent physician groups do. And the larger institutions certainly don’t enjoy the same political good will as smaller medical providers.Part of the challenge that large institutions have is related to their sheer size and their multi-state footprints. UVM Health Network’s recent growth is primarily in New York. And UVM Medical Center does need to be large enough to be a well respected and sought after academic, research and acute care facility. But you can’t chalk it all up to size, some of it is being out of touch – or at least not knowing how much it really takes to be in touch with the communities they serve. The smaller health care providers are much more adept at being connected with their communities and as a result, building loyalties.UVM Medical Center cites national statistics and a recent report showing that they deliver high quality health care while controlling costs. These are good measures, no doubt. Still, some—especially local influencers—view them as arrogant and overly bureaucratic. Certainly, awarding high-salaried administrators hefty bonuses at a time when frontline nurses were getting paltry salary increases doesn’t help in this perception. The nurses’ union may be more at fault than management in agreeing to these recent contracts; nonetheless the appearance is that UVM Medical Center’s cost savings are achieved on the backs of staff at the hospital, while upper management is very richly rewarded. And surprisingly, they have done little to dissuade anyone of this notion.So, how do we make transformative change where access and quality is enhanced and cost is reduced? By looking past the payment phase of this medical evolution and ensuring the system is prepared to adapt to the new realities of a future technology based system. Players of the game of chess know that often one has to think beyond the next move and place equal focus on critical moves in the future in order to win. With technology this ability to look far down the road is critical.What advances in technology have shown—particularly in other industries—is that innovation and efficiency can level the playing field, much in the same way that it did in telecommunications. No longer is the Bell System the dominant player it once was in the telecommunications industry: smaller entities, even upstarts, now have the ability to compete. This brave new world in health care has the potential of lowering costs, reducing administrative bureaucracies, advancing innovation, diversifying options – and protecting our cherished local providers and caregivers.Just as the game of chess requires forward thinking to be successful so too must government anticipate critical future moves that invite this technological transformation. This will require state officials to avoid being singularly focused on changes to the health care system that may not meet the affordability concerns of the medical consumer.Mike Smith was ecretary of administration and secretary of human services under former Gov. Jim Douglas. He is the host of the radio program, “Open Mike with Mike Smith,” on WDEV 550 AM and 96.1, 96.5 and 101.9 FM. He is also a political analyst for WCAX-TV and WVMT radio and is a regular contributor to the Times Argus, Rutland Herald and Vermont Business Magazine. His spouse is a nurse at UVM Medical Center.