Just imagine if we could just wave a magic wand and all enjoy mutually delicious sips from the same icy cocktail of healthcare reform. The solutions that appear to be so clear and obvious - to everyone except the major players that engage in healthcare.
"No more payers. We need greater consumerism and free markets."
Why would health systems, medical facilities and specialists willingly leave the B-to-B payer system, and depend on consumer payments? Why would hospitals, big pharma and providers want to compete on price, when they can utilize their political influence and retain greater certainty in a regulated pricing model?
If large self-insured companies contract with health systems directly, could we count on these companies to pass savings directly to their employees, rather than pocket them as profit? Moreover, what would be the fallout effect on payer pricing to the individual and the fully-insured markets? If payer competition lessened through direct contacting, could health systems ultimately wield pricing leverage in these relationships?
"We need greater patient engagement. More exercise, better diets, use of wearable technology, medication adherence - to better manage and lower chronic disease."
Check out the latest reports on wellness plans and seniors use of digital health tools. Why would patients who 'feel good' and/or are not remunerated financially, want to make these consistent, long-term behavior changes?
In a country with a proven history of high obesity and chronic disease rates, why would patients choose to change their lifestyles en masse? What is the motivation for long-term adherence and results?
"We need single payer healthcare like Denmark and Canada"
Okay then, how do we disassemble a massively interconnected, for-profit health model complete with individual and institutional shareholders & bondholders? What of the leftover millions of employees from payers, brokers and insurance agents not able to be repurposed into other jobs?
Hey, what happens to the rest of the economy when consumer spending from all this unemployment and loss of investment monies drops our GDP into the toilet? How would this affect future tax rates for individuals and companies?
"We need payers, drug companies, providers and hospitals to lower healthcare costs."
Agreed...and then what?
Instead of the motives to satisfy shareholders and take in more profit, will these companies choose to willingly pass on new savings as lower pricing to healthcare consumers? If that's the case, why haven't we seen any major industry players going on record to state this?
The Problem
Enter Will McAvoy from 'The Newsroom'. The anchor from ACN said it best with his famous utterance: "The first step in solving any problem is realizing there is one."
Increased healthcare costs, lower quality, worsening outcomes, fraud, waste, abuse, mass unaffordability, stagnant wages, overutilization, defensive medicine, uber-administration, and physician burnout are all too obvious, painful, and expensive realities. Yet these are largely the emerging effects of a largely missed core problem:
The chief reason for our healthcare crisis has been political leaders lacking leadership greatness. The absence of having the 'guts' to make the tough decisions for our future.
If our current weak, spineless, clueless, ego-driven, special interest capitulating, partisan robots led America during WWII, I fear we'd today be speaking Japanese or German. But those leaders recognized and decisively drew upon the need for all Americans to pull together for the greater good. Our citizens and businesses believed in the vision and greatness of perpetuating a better America for the next generation.
As much as I never thought I'd want to say it, we actually need greater government oversight in several key areas moving forward. Because it is obvious to a man, that large healthcare industries and public players are not simply going to go away, or let their built-up leverage shrivel up. Consumers and employers need to stand on more equal footing. This cannot be accomplished solely by the Triple Aim.
When I think of great decisions that shaped our country, I think of Kennedy's decision to land a man on the moon. Lyndon Johnson getting Civil Rights passed, as well as Lincoln's Emancipation Proclamation. Congress passing the 19th Amendment and FDRs New Deal with 100 days of full bipartisan support. The way America rallied together, had conservation drives and raised war bonds during WWII.
We need those same leadership qualities, to better position and deliver affordable, quality healthcare for the next generation. Consumer initiatives and bold plans are good, until special interests hit politicians. I see the next generation of politicians recognizing some important trends.
Like so many, I take issue with the personality of Donald Trump. However, his greatest gift was to show us that we can, and may well have a new era of politician coming. One, who on either side of the aisle, can choose to invest his or her own money and popularity; and not be tied into special interest groups.
Antics, tweeting and all else aside, Trump's ability to tap into the fear and anger of Americans, and their unhappiness with Congress, showed us that people are ready for a new type of political leader. It is my belief and hope that others will pick up the mantle. Recognizing that transformation in U.S. leadership is necessary now more than ever. Hopefully it will be someone will good business and leadership skills, and a pragmatism related to our great leaders of our past.
Apart from aspirations of greater political leadership, we need to have a viable model for bringing fairness, accountability and affordability to the current status quo of health care.
ENTER: THE 'HIT-IQ' PLAN
HIT-IQ = Health reform by Intelligent augmentation, Transparency, Incentive andQuantity.
HEALTH REFORM
Each of the above facets carries the ability, in the face of tougher laws and added responsibilities, to speed up the ability for all players in the U.S. health system to benefit from reform. This plan is separate from the current efforts in transitioning to value-based care, the Triple Aim and ACOs.
The HIT-IQ plan is the necessary filling for the cracks in healthcare reform. The glue that ensures fairness and an ability for a more level playing field; It is comprised of the following:
INTELLIGENT AUGMENTATION (IA)
Also known as intelligence amplification. Think of IA as a computer system or technology that supports and enhances human thinking, analysis, planning, and decisions. Yet it allows the control and oversight to remain with humans. An example is Google's search algorithm that allows us to find what we want online, in just a matter of seconds.
Contrast this with artificial intelligence (AI), where machines are built that are meant to fully reproduce human cognition within a system that functions and learns autonomously in its own domain. True human-free AI is not fully here yet, though portions of AI are coming forward in new technology and solutions.
We now live in a world where much of our data has moved from paper pages to digitization. Big data offers great benefit, yet it still has to be organized, analyzed, prioritized, and optimized for specific purpose. IA is the generator - and when coupled with massive computing power and speed, it allows humans to become far more accurate and efficient in their business and life activities.
In my past article on artificial intelligence in healthcare, I wrote on different companies, each with emerging technologies meant to improve on accuracy and efficiency in different facets of healthcare. This includes medical imaging, mental health, risk management, drug discovery, genomics, hospital monitoring, and lifestyle management. IBM's Watson is a great example of IA in healthcare, where doctors can better diagnose and employ the latest personalized evidence-based care.
Help in efficiency comes at a point none too soon. Recent reports mark the last three quarters of U.S. worker productivity are at the lowest levels since our pre-stagflation period in the 1970's. According to popular economists, something very interesting is happening. The last six years of great technology has not positively affected overall productivity - in fact, it's gone backwards in a hurry.
This becomes extremely important for healthcare, which at the end of 2016 will have the highest employment pool of any U.S. sector. Moreover, the pricing of health care and health coverage has become unsustainable for many individuals and small to mid-size employers.
The biggest game of 'financial musical chairs' now exists between employer profits, consumers affording healthcare plus retaining their current standard of living, and health companies satisfying shareholders with ever-surging quarteries
The big fear of robotic automation and AI is that computers will replace human workers. That said, I believe that IA efficiency makes job elimination en masse an absolute necessity in bringing down the cost of healthcare. Any company's purpose is to make profit, attain customers and stay competitive - and that does not include keeping people employed. That is, unless the replaced quality, accuracy and value becomes less than when current high levels of human capital was involved.
With what I continue to see coming in IA solutions, I believe it won't be long until we see deep learning and pattern recognition being applied to hiring, work flows, management and core operations - as well as patient intake, diagnosis, mhealth data, patient marketing, population health and chronic and acute remote and in-house care management.
The fact that interest rates remain low also bows well for healthcare companies to make investments in greater levels of integrated technologies. Technologies that will replace bunches of humans with greater accuracy, efficiency, less errors and greater predictability. Let's not forget this operates 24/7/365 with fewer salaries, benefits, sick days, arguments, or ability to file lawsuits.
But Wait...There's More!
Look for malpractice rates and defensive medicine practices to come down significantly, as expertly designed, optimized, scalable and proven algorithms come into play. As med-mal rates drop, health systems and providers will capture that cost difference - and not add them over current net salaries. Voila - still more lower costs!
It's not magic folks...we're trading off large inefficiencies and human-based error inherent with a large employment pool. There's a reason that medical error is the #3 killer in America - and big data analysis, predictability, accuracy, greater monitoring, and efficiency are precisely what is needed for lower costs, higher quality, greater safety, and better outcomes.
Best of all, it will still be run by humans.
TRANSPARENCY
This is one area where government must necessarily mandate across all states. We have seen that without mandated public and easy-to- access transparency, health consumers and employers have absolutely no chance for greater affordability.
Healthcare companies have NO INTEREST in making healthcare more affordable to consumers. And please...don't be lulled into thinking that just because payers, plans, medical device companies and big pharma/PBMs are working to lower healthcare costs and increase care quality, that the savings will be passed onto the consumer in terms of lower, more affordable pricing.
Check this. United Healthcare's PATH program is a joint effort for better care outcomes. In 2015, 1,900 providers hit their program marks and were paid a bonus of $148 million dollars, or near $78,000 per provider. Sick and diseased consumers are going into bankruptcy and medical debt, or holding holding off seeing doctors due to financial constraint, and United is paying doctors to lower costs that should have never been that high to begin with?
Is this a joke? Providers are being rewarded for doing what is expected anyway, and the consumers (err...paying customers) get regularly increased premiums? Take a look at the PATH consumer website; with all the accolades on helping health, please help me find where it says that United will reward customers by delivering future lower prices for their plan premium pricing.
The following are needed areas of transparency:
An all-claims reporting mandate, from every payer, hospital, facility, doctor, self-insured company and government agency. While the recent ERISA ruling by the Supreme Court caused some setback, the Department of Labor could and should push through self-insured entities to report payments through state mandated requirements. This leads into...
Every hospital, facility, health system, and provider should have their full fees, within 90 days for every product or service, be freely and easily available to the public. Any website or app could tie into the API or data to create patient or employer comparison shopping tools.
Every individual and company must be able to see what underwriting factors and specific influences went into a payer deciding upon their fully insured plan premium. Line-by-line calculations, each fully explainable.
All PBMs required to be fully transparent on all fees, kickbacks and bonuses.
Safety of providers and facilities. There is no reason that circumstances involving doctors, hospitals or medical facilities that have been found guilty of state law violations, and/or have lost or settled in malpractice suits, shouldn't be made clear to consumers.
Drug company R&D costs. We're all sick and tired of the moaning relating to big pharma's R&D and how our demands for price cuts will kill future new cures and drug development. Okay then, let's open those books so we can share in your pain. Hey, greater public appreciation and demand for IA in drug delivery, will keep your profit margins while bringing down prices.
INCENTIVES
I'd like to meet the geniuses that believe that a healthcare population which is 40% obese, full of chronic disease, and is constantly tempted by fast food and sedentary online entertainment is going to make...(wait for it)...long term consistent changes by using wellness programs.
Is it because doctors (who ARE compensated by financial incentives or ARE punished by financial withholding penalties) tell them so?
Here's a toughie. What if we asked doctors and practice lower their cost to provide care, make less in profits and lower their salaries. They would then willingly pass on these newfound monies as reducing pricing to patients because it would be financially 'healthier' for the good of America's future.
How do you think our white coat paladins, hospital administrators, and health system executives would respond? Any bets here?
This is not rocket science - it's common sense. Studies are very clear that loss aversion related to money is a far better motivator, even than giving them money. Moreover, only 25% of employees find their wellness programs at work effective.
In a recent study of 7,600 businesses by Payscale, 73% of employers believe they pay fairly, while only 36% of employees feel the same. And 21% of these same workers believe that the company is transparent about pay.
Catching my drift employers? You can kill three birds with one stone in gaining healthier employees, potentially lowering healthcare costs, and improving engagement through greater levels of trust and feeling appreciated financially.
Reward healthcare consumers, by tying in wellness gains and goals to financial rewards or punishments (Cash here folks - not trips, massages or points). Health plans, same thing. If you want to balance out the risk of sicker members, per enrollment with the ACA mandates, hit up your chronic, pre-chronic and younger members. See how financial incentives and disincentives work here.
If they use wearables and contribute data to you or their provider, they are rewarded financially. If they hit goals on medication adherence, weight loss, lowering cholesterol or blood sugar - give them a paid check rebate. If they have a yearly physical reward them.
Better yet, show them that future check with all applicable bonuses added together for their rewards. A nice juicy number. Now, deduct 2% of that cash every week they don't execute - like a melting ice cube. Keep showing them as often as possible on what they are going to be missing. Catching my drift?
QUANTITY
Care delivery professionals, facilities, and systems will soon have outcomes, patient satisfaction and cost numbers pitted against their service reimbursement levels - and eventually against each other. Consumerism is growing and whether healthcare stays largely regulated in its pricing or not, reimbursement levels at all aspects of the care supply and delivery chain, including on many prescription drugs, will likely decrease.
Moreover, reimbursement via bundled, value-based payments will come to replace the old, perverse fee-for-service model. Hence, lower payments for the same work means that the number of people engaging in healthcare products and services must grow, if revenues are to grow.
Healthcare businesses will have to optimize every possible aspect of their business for new and repeat customer engagement - and to retain their customer base. Especially important here will be those successful companies who focus on their intangible assets. These include advertising, marketing, sales, goodwill, customer relationships, and various expertise that hospitals, providers, payers, drug companies and facilities have - which they can and should capitalize upon to their economic advantage.
Those companies that get this will shape their precise outcomes through mastering the art of optimization. Learning how to maximize their intangible assets to drive more engagement of current and prospective consumer clients, thus increasing quantity of services and products. They will look at every consumer and business relationship, every past and present contact, every opportunity in current consumer interactions, every supply and distribution channel, every employee - every piece of capital or human capital they have.
Many healthcare companies suffer from tunnel, instead of 'funnel' vision. They believe they provide products or care and are paid for such - and that's it. But the organizations that recognize that they can not only offer more, but be more than their basic business offerings, will derive greater revenue and profit.
Population health is a great example. It's more than capturing data from wearables. It's recognizing the interplay between chronic disease and genetics - and the need for screening those who don't current engage in healthcare services. It's about tying in mental health for those who are caregivers and don't take care of themselves. It's about recognizing that if you work out a medical debt with more than a negotiation, but perhaps a thank you card sent after, your name will be more gold than mud.
For Direct Primary Care doctors, it's about offering a rebate to their customers who bring on new members to your practice. For a health system, it might be coordinating a telehealth counseling visit to family member grieving through a loved ones' illness. How about making that extra call to check up on how the patient is doing at home, the day after they got home from the hospital?
Perhaps it's giving a free service. Often the most self-serving thing a company can do is actually to be selfless. Like a doctor's office sending flowers after a successful surgery outcome, or even upon a loved one dying. Maybe it's a call from a drug company outbound customer coordinator, just to see how the new medication is working.
Moving Forward
Health companies of all types and sizes, who replace current limiting beliefs with empowering ones - will find themselves on a track toward capturing greater community value, engagement and increasing their market identity. In short, those companies that get people to WANT to engage and help others engage with those same companies will thrive.
Players in healthcare must not forget that consumerism isn't a dirty word. Its people who are putting up their hands saying, "I want to be cared for and find value in that care, so that I can feel good about my time and money spent."
If they HAVE to be cared for, per sickness or emergency, then that's all the more reason to make them feel good about you.
It's no longer a healthcare world where providing the service, billing and receiving payment suffices. People and employers are smartening up - and recognizing that lower reimbursement, more competition, and new options for care and coverage are developing.
Those healthcare companies that can integrate the 'intangibles' in a meaningful, ethical, and value-added manner, for their current and prospective healthcare consumers, will thrive. Increasing quantity of consumers and necessary services identified and rendered is key. Especially in a healthcare business environment that has properly integrated lower costs, greater efficiency through technology, and better outcomes.
It will make and keep their current and future healthcare consumers far happier in the long run. Now that's some of the best risk management I know of.