Blog by Colin Hung
During HIMSS17 I had the opportunity to participate in a televised debate with my friend Mandi Bishop @MandBPro. I recently wrote a prologue/recap of that debate for HIMSS Media. You can read the piece and view the debate here.
I thought it would be fun to extend this discussion to the entire #hcldr community.
Although Mandi and I took opposing views, we did agree that the lines are blurring between patients, payers, healthcare providers and employers:
- Payers are becoming healthcare providers (ex: Blue Cross Blue Shield, Aetna)
- Providers are becoming payers (ex: UPMC, Kaiser Permanente)
- Employers are becoming payers (ex: IBM)
- Employers are becoming healthcare providers (ex: Apple)
- Patients now have access to self diagnostic tools
- Patients now have to shoulder a bigger financial burden for their own health
Why is this happening? I believe there are many reasons but to me there are three primary drivers:
- Healthcare costs continue to climb and everyone is looking for ways to reduce costs
- Keeping people healthy is now in everyone’s best interests
- Technology advances make delivering care and providing coverage much easier than before
Consider the example of Intel. In 2009, Intel began experimenting with ways to control rising healthcare costs without asking its employee to shoulder too much additional financial burden (they feared losing out on top talent). Intel implemented a string of initiatives including High-Deductible Health Plans (HDHPs), tax-advantage accounts and onsite wellness classes. They even opened primary care clinics at their a few of their large facilities. None of it worked and costs continued to creep upwards.
Late in 2009, Intel did something radical. They decided that the best way to truly reduce the cost of care was to make providing care more efficient. Intel believed it could apply its considerable knowledge in process engineering and supply chain management to a healthcare provider who was willing to shake up the status quo. They found a willing partner in Virginia Mason Medical Center (VMMC), a health system based in Seattle WA.
Together Intel and VMMC applied lean-thinking and process redesign to streamline the treatment of six medical conditions. They also streamlined screening for immunizations and illness like diabetes and high blood pressure. The results and benefits of this collaboration were impressive:
- The direct cost of treating three of the conditions fell by 24% – 49%
- Intel employees were able to access care faster and return to work quicker
- Patient satisfaction levels were higher after the changes were implemented
- More than 10,000 hours of wasted time was cut from clinical processes
Below is an example of how Intel + VMMC’s Healthcare Marketplace Collaborative (HMC) radically changed the approach to treating uncomplicated lower back pain.
I find this Intel success story remarkable not only because of the outcomes achieved, but because of the tight alignment between the goals of Intel and its employees. Both were financially incented to keep healthcare costs down and minimize the time people were out of work. In essence the employer, Intel, was incented to keep its employees healthy.
If you think about it, insurance companies (payers) have similar goals to employers. Payers are equally incented to keep their members out of hospitals so that they don’t incur medical costs in the first place. To that end, many payers now offer 24-hour nurse hotlines to members, discounted fitness memberships, smoking cessation classes and gamified health tracking. What we are seeing today are payers who directly offer healthcare and wellness services to individuals in order to keep people healthy.
Healthcare organizations are also financially incented to keep patients out of their facilities. In 2012 the Centers for Medicare & Medicaid Services introduced the Hospital Readmissions Reduction Program which penalized hospitals for patients that were readmitted immediately following a procedure. The penalties have steadily increased in every year of the program. To avoid these penalties, hospitals have improved overall quality so that they provide appropriate error-free care the first time a patient presents. They have also implemented a host of community health and post-procedure programs designed to keep their patients healthy.
For the first time in years key layers within the healthcare ecosystem – patients, employers, governments, healthcare organizations and payers – are all aligned around keeping people healthy.
The question now is how and who is best suited to this task?
Other than patients themselves, I would argue that employers have the most to gain/lose from healthy individuals. Unfortunately not every employer is capable of implementing programs like the one Intel did and many small businesses are struggling to offer even basic healthcare coverage to employee. Relying on employers to keep people healthy would mean an uneven distribution of benefits across the population – those working for large financially successful companies would be healthier.
Next on my list would be payers – who have significant financial incentive to keep their members healthy. Unfortunately payers are almost universally loathed and untrusted. There are countless horror stories about denied claims, about families suffering because life-saving medications are not covered and about companies refusing to cover an individual due to preexisting conditions. The lack of trust in payers is a significant barrier and blunts their wellness efforts.
Healthcare organizations, on the other hand, are trusted by many patients. However, other than the readmission penalties, hospitals and clinics are do not have as strong a financial incentive to help patients stay healthy. It is still more lucrative for organizations to conduct a CT scan than it is to teach patients how to make healthy choices at the grocery store. As we continue to move from a fee-for-service model to a value-based one, this will eventually change, but we are still years away from reaching the inflection point.
Please join us on Tuesday, June 27th at 8:30pm Eastern (for your local time click here) as we discuss the following topics:
- T1 Who is most incented to keep people healthy today? Payers, Primary Care Phys, HC orgs, gov’t or employers?
- T2 Should people expect organizations of any type to help keep them healthy? If so who?
- T3 What could a payer do to earn goodwill/trust back from their members?
- T4 What would your ideal wellness program look like?
“Money over Matter: Can Cash Incentives Keep People Healthy?”, Jordan Lite, Scientific American, 21 March 2011, https://www.scientificamerican.com/article/can-cash-incentives-keep-people-healthy/, accessed 23 June 2017
“It’s Time to Start Paying To Keep Patients Healthy”, Robert Book, Forbes, 26 August 2015, https://www.forbes.com/sites/theapothecary/2015/08/26/its-time-to-start-paying-to-keep-patients-healthy/#43a4c22300d1, accessed 23 June 2017
“Rewarding Healthy Behaviors – Pay Patients for Performance”, Joanne Wu MD, Annals of Family Medicine, May 2012, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3354976/, accessed 23 June 2017
“Health Insurers Say They Don’t Want To Go Back To Being The Bad Guys”, Audie Cornish, NPR, 3 February 2017, http://www.npr.org/sections/health-shots/2017/02/03/513283883/health-insurers-say-they-dont-want-to-go-back-to-being-the-bad-guys, accessed 23 June 2017
“Aligned incentives, better outcomes”, Aetna, May 2014, https://news.aetna.com/2014/05/aligned-incentives-better-outcomes/, accessed 23 June 2017
“The Employer-Led Health Care Revolution”, Patricia McDonald et al, Harvard Business Review, August 2015, https://hbr.org/2015/07/the-employer-led-health-care-revolution, accessed 23 June 2017
“Your Company Wants to Make You Healthy”, Jen Wieczner, Wall Street Journal, 8 April 2013, https://www.wsj.com/articles/SB10001424127887323393304578360252284151378, accessed 23 June 2017
“Health insurance division drives growth at UPMC”, Kris Mamula, Pittsburgh Post-Gazette, 1 March 2017, http://www.post-gazette.com/business/healthcare-business/2017/03/01/Health-insurance-division-drives-growth-at-UPMC/stories/201703010049, accessed 23 June 2017
“Aetna and Providence Health & Services Announce a New Product-Based Accountable Care Collaboration in LA County”, 17 May 2016, https://news.aetna.com/news-releases/aetna-and-providence-health-services-announce-a-new-product-based-accountable-care-collaboration-in-los-angeles-county/, accessed 23 June 2017
“High deductibles: why physicians must adjust how they practice”, Susan Kreimer, Medical Economics, 4 February 2015, http://medicaleconomics.modernmedicine.com/medical-economics/news/high-deductibles-why-physicians-must-adjust-how-they-practice?page=full, accessed 23 June 2017
“How cash-pay patients can beat high-deductible plans”, Martine Ehrenclou, KevinMD.com, 9 July 2016, http://www.kevinmd.com/blog/2016/07/cash-pay-patients-can-beat-high-deductible-plans.html, accessed 23 June 2017
“High-Deductible Health Plans – Health Policy Brief”, HealthAffairs, 4 February 2016, http://healthaffairs.org/healthpolicybriefs/brief_pdfs/healthpolicybrief_152.pdf, accessed 23 June 2017
“Analysis of High Deductible Health Plans”, Rand Corporation, https://www.rand.org/pubs/technical_reports/TR562z4/analysis-of-high-deductible-health-plans.html, accessed 23 June 2017
Spin Class – Nottingham Trent University https://flic.kr/p/cEv6Qb