The purchaser-driven reformation in health care: alternative approaches to leveling our cathedrals

Slowly mounting interest in the provider community in delivery system reform badly underestimates the extent to which major reconfiguration is already being engineered by aggressive purchasers. The once widely held view that provider-sponsored integrated firms represent the ideal health care system is being challenged by purchasers who are crafting, through short- and long-term selective contracting, provider networks that offer many of the same advantages ascribed to integrated firms. Three alternative approaches to restructuring delivery systems are examined and appraised in terms of how each may or may not be able to satisfy purchaser demands. The relentless pursuit of better cost management will have profound consequences for health care providers and their managers. Major redeployment of resources will occur as the industry converts from a hospital-centered to a continuum of care-centered management philosophy.