Tag Archives: Stephen Ambrose

Not Your Mama’s Recipe for Healthcare

This article is about opening minds, eyes, hearts and futures. I’m going to take you on a journey into a world where I shine my flashlight into dark corners, challenging norms, introducing ideas and connecting different areas of current players and practice.  

Thanks in advance for sharing, caring and daring to think in ways that transform.

– Steve

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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 appear to be so clear and obvious — to everyone except the major players that engage in healthcare.

Why would health systems, medical facilities and specialists willingly leave the B2B payer system and depend on consumer payments?  Why would hospitals, big pharma and providers want to compete on price when they can use 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 on payer pricing to the individual and the fully insured markets? If payer competition was lessened through direct contacting, could health systems ultimately wield pricing leverage in these relationships?

Check out the latest reports on wellness plans and seniors’ use of digital health tools. Why would patients who feel good 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?

Okay, then, how do we disassemble a massively interconnected, for-profit health model that is complete with individual and institutional shareholders and bondholders? What about the leftover millions of employees from payers, brokers and insurance agents who are not able to be repurposed into other jobs?

What happens to the rest of the economy when consumer spending from all this unemployment and loss of investment money 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. But, if they do lower costs, what then?

Instead of being motivated by satisfying shareholders and taking in more profit, will these companies choose to willingly pass on new savings as a result of lower pricing to healthcare consumers? If that’s the case, why haven’t we seen any major industry players going on record to say this?

Enter Will McAvoy from the HBO show “The Newsroom.”  The fake TV anchor from ACN said it best with his famous utterance: “The first step in solving any problem is realizing there is one.”

See also: Consumer-Friendly Healthcare Model  

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 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 the leaders in the 1940s 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 say it, we actually need greater government oversight in several key areas. It is obvious 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, which cannot be accomplished solely by the Triple Aim (simultaneously improving the experience of care, bettering the health of the population and reducing per-capita costs).

When I think of great decisions that shaped our country, I think of John F. Kennedy’s decision to land a man on the moon. I think of Lyndon B. Johnson getting the Civil Rights Act passed. I think of Abraham Lincoln’s Emancipation Proclamation. I think of Congress passing the 19th Amendment. I think of Franklin Delano Roosevelt’s New Deal with 100 days of full bipartisan support. And I think of 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.

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 and Quantity.

HEALTH REFORM: To speed up the ability for all players in the U.S. health system to benefit from reform, the HIT-IQ plan fills the cracks in healthcare reform. It is composed 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 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 to digital. Big data offers great benefit, yet it still has to be organized, analyzed, prioritized and optimized for a 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.

See also: The Search For True Healthcare Transparency  

In a previous article on AI, I wrote about different companies, each with emerging technologies meant to improve 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 can come none too soon. Recent reports show the last three quarters of U.S. worker productivity are at the lowest levels since the pre-stagflation period in the 1970s. According to popular economists, something very interesting is happening. The last six years of great technology has not helped overall productivity — in fact, it has gone backward 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 healthcare and health coverage has become unsustainable for many individuals and small to mid-size employers.

A big game of “financial musical chairs” now exists between employer profits, consumers who want to afford healthcare and retain their current standard of living and health companies that want to satisfy shareholders with ever-surging profits.

The big fear of robotic automation and AI is that computers will replace human workers. But I believe 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 were involved.

With what I continue to see coming in IA solutions, I believe it will not 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, m-health data, patient marketing, population health and chronic and acute remote and in-house care management.

The fact that interest rates remain low also bodes well for healthcare companies to make investments in greater levels of integrated technologies that will replace bunches of humans with greater accuracy, efficiency, fewer errors and greater predictability. Let’s not forget this technology operates 24/7/365 with fewer salaries, benefits, sick days, arguments — or the 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 medical malpractice rates drop, health systems and providers will capture that cost difference — and not add them over current net salaries. Et voila! Still 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 medical error is the third-largest 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, the system will still be run by humans.

TRANSPARENCY: This is one area where the government must make a mandate across all states. We have seen that without mandated public and easy-to-access transparency, health consumers and employers have absolutely no chance of 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 on to the consumer in the form of lower, more affordable pricing.

Look at 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, near $78,000 per provider. Sick and diseased consumers are going into bankruptcy and medical debt or are holding holding off seeing doctors because financial constraint — and United is paying doctors bonuses 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 (errrr, paying customers) get regularly increased premiums? Take a look at the PATH consumer website; with all the accolades on improving health, help me find where it says United will reward customers by delivering lower prices for their plan’s premium pricing.

Here are needed areas of transparency:

1. 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.

2. 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.

3. 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.

4. All pharmacy benefits managers (PBMs) should be required to be fully transparent on all fees, kickbacks and bonuses.

5. There must be increased safety when it comes to providers and facilities. There is no reason that circumstances involving doctors, hospitals or medical facilities that have been found guilty of state law violations or have lost or settled in malpractice suits shouldn’t be made clear to consumers.

6. People should be made aware of drug companies’ 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 profit margins while bringing down prices.

INCENTIVES:  I’d like to meet the geniuses who believe that a healthcare population that 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.

Will they do so because doctors (who are compensated by financial incentives or are punished by financial withholding penalties) tell them to do so?

Here’s a toughie: What if we asked doctors and practices to lower their cost to provide care, make less in profits and lower their salaries. Then, we told them they would willingly pass on these newfound monies to reduce pricing for patients because it would be financially healthier for the country’s future.

How do you think our white coat paladins, hospital administrators and health system executives would respond?

This is not rocket science — it is 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 to be 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 just 21% of the workers believe the company is transparent about pay.

Catching my drift, employers? You can kill three birds with one stone: gaining healthier employees, potentially lowering healthcare costs and improving engagement through greater levels of trust and feeling appreciated financially.

Reward healthcare consumers by tying wellness goals to financial rewards or punishments. (We are talking 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 there.

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. It is 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 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 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.

The 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 and every piece of capital or human capital they have.

See also: Is Transparency the Answer in Healthcare?

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 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 is about more than capturing data from wearables; it is about recognizing the interplay between chronic disease and genetics and the need for screening those who don’t currently engage in healthcare services. It is about tying in mental health for those who are caregivers and don’t take care of themselves. It is 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 is about offering a rebate to customers who bring new members to your practice. For a health system, it might be coordinating a telehealth counseling visit to a family member grieving because of a loved one’s illness. What about making that extra call to check up on how a patient is doing at home the day after they get 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. Maybe it is a doctor’s office sending flowers after a successful surgery outcome or even upon a loved one dying. Maybe it is a call from a drug company outbound customer coordinator, just to see how the new medication is working.

Health companies of all types and sizes that 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, 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 is not a dirty word; it is people 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 because of sickness or an emergency, then that is all the more reason to make patients feel good about you.

It is 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 identifying and rendering necessary services 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 — current and future healthcare consumers far happier in the long run. Now that’s some of the best risk management I know about.

Consumer-Friendly Healthcare Model

Best-selling Author Og Mandino once said:  “Always seek out the seed of triumph in every adversity.”

It appears that a small, yet growing number of America’s front line health providers are doing just that. Instead taking on increased risk, greater healthcare bureaucracy and more administration headaches, these medical mavericks have drawn a philosophical line in the sand.

I’m speaking of direct primary care (DPC). For the uninitiated, DPC is an emerging model where general practitioners elect to disassociate from, and no longer bill services to, health payers, including Medicare. DPC practices average between 600 and 800 total patients (vs. the national 2,300-patient average for traditional primary care provider (PCP) patient panels).

This return to front-line doctoring — “sans insurance” — translates into a cost-reduction of as much as 40% in staffing and reduced administrative complexity. Electronic health records (EHR) software finds itself replaced with lighter applications to track, schedule and bill patients. Practices may also choose to use mhealth/telehealth technology to monitor/connect with patients.

Patients in these practices are often those with low to middle incomes, with high-deductible health plans (HDHPs). For this reason, DPC doctors develop network relationships with other local medical specialists and services. The result is patients gaining access to discounted medications, imaging and labs, plus lower service fees from local specialists — all on a cash basis.

And presto! We have a true two-party care relationship, where doctors focus purely on patients, instead of blending in payers as their second healthcare customer.

The median monthly DPC fee for an adult is about $70; and fees for kids are priced between $10 and $20 per child. Many DPC practices also cap monthly family fees. Pricing is independent of pre-existing conditions and current health status and allows for more face-to-face time, as often as needed.

These practices report reducing urgent care and ER visits, plus hospital admits and re-admits. Quality and outcome data has apparently started reaching malpractice insurers, now quoting lower rates for direct vs. traditional primary care practices.

Here is where it gets sticky. DPC is rightly considered a “health service,” both by the Affordable Care Act (ACA) and by 16 states. However, under section 223(c) of the U.S. tax code, the I.R.S. wrongly considers DPC a “gap,” or secondary, health plan. Therefore, DPC is not a qualified medical expense — and fees paid by patients are not reimbursable by health savings accounts (HSAs).

Changes are in the works, per the introduction of Senate Bill 1989 – The Primary Care Enhancement Act of 2015, which would make DPC fees a part of HSAs. The bill, with strong support from the American Academy of Family Physicians, also seeks to require the Center for Medicare and Medicaid Innovation (CMMI) to create a new payment pathway for DPC as an alternative payment model (APM) in Medicare and with dual eligibles.

The plan is for DPC to show Medicare its mettle — and eventually receive a modest flat fee payment for primary care services offered by a DPC medical home. The legislation includes allowing qualified physicians who have opted out of Medicare to participate in the program. It also serves as a partnering catalyst with Medicare Advantage, in an affordable care organization (ACO)-like structure.

DPC is a disruptive “hot knife” model, whose entry is well-timed to cut through the cold stick of butter called high health costs.

Today, PCP co-pays have gone up to $45, and deductibles are sky high. Many consumers have no idea that at or around the same per-visit patient fee, DPC exists as an option. Employers are just beginning, on a larger scale, to integrate DPC with other options such as HDHPs and self-insured health coverage. Using this new model with self-insured companies makes sense, to hedge risk, lower health costs, improve outcomes and improve quality of care.

One county in North Carolina, which employed a DPC option, saved nearly $1.5 million on yearly medical expenses — on just 800 covered lives! It may surprise you that, apart from HSA standing, there are already early employer adopters who have chosen to pay the monthly DPC fees for employees themselves.

A British Medical Journal study showed patients of Washington state DPC provider Qliance coming in with 35% fewer hospitalizations, 65% fewer emergency department visits, 66% fewer specialist visits and 82% fewer surgeries. DPC benefits appear to not only reduce primary care costs, but lessen the healthcare costs and utilization outside of their practices.

Payer transparency is a significantly important strategy to the future growth and integration of DPC.

We talk about the importance of transparency in hospital pricing to patients, and for drug companies to reveal their true R&D costs. But have you ever stopped to consider the importance of transparency in how payers calculate and price plan premiums for each covered member? Just how much of the premium payment can be carved out as estimated primary care services to be received?

More than ever, healthcare consumer groups and fully insured employers should push health payers for transparency. Because I’ll bet what payers have estimated for per-person primary care usage and costs, adding in the associated patient responsibility portions (co-pays, and any applicable deductible or co-insurance fees) will be much more than an $840 yearly DPC payment.

But wait…there’s more. Don’t forget to have payers deduct an additional…let’s be conservative…1/3 of the Qliance savings percentages for the estimated care cost savings relating to carved-out estimated care outside of primary services.

Next, look at Medicare and do the same thing. But…instead of the wallets of health plan members, think federal budgets, taxpayers, subsidies, growing liabilities and the potential to hold off future tax increases.

Then look at Medicaid for the same reasons, remembering that DPC would certainly create a greater improvement of care quality than Medicaid care providers and facilities. Remember the “triple aim” — cost, outcomes and quality — and that doctors are happier.

DPC injects disruption and greater consumerism into healthcare.

Something interesting happened along the way to transforming our healthcare system. The ACA fell far short of its goals, and America’s care delivery and coverage became even less affordable for millions of employers and individual consumers.

We should know by now that improving quality and pricing for all will not come from laws — specifically, from those who force people into lower-quality Medicaid coverage, and insurance plan exchange options with punishing deductibles; in essence, giving people a broken Christmas toy with a pretty bow on it and pretending they will enjoy it.  

No matter how you dress it up, and much money you throw at it: Healthcare coverage is not the same as affordable healthcare.

In the heart of even the toughest situations, there are innately driven people who make bold, fresh choices and take stands — efforts that emphasize principles we know to be just and right, rather than gaining financially on the backs of others’ misery. My hope resides in what Lincoln called “the better angels of our nature.”

DPC offers a free-market “injection” into healthcare’s regulated pricing model. If Senate Bill 1989 or a similar law passes, it will provide individuals and companies a better chance to gain better quality, more affordable care. Unlike some DPC purists, I see a future inflow of Medicare dollars to non-enrolled DPC qualified providers as stimulating a transformation where coordinated care begins from outside of the umbrella of big medicine ownership.

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Like the plunging penguins who emulate the courageous actions of others, I believe many primary care physicians are looking for the right time to enter a DPC model. Whether that happens individually, through groups, or by strategic partnerships, is up to industry forces. It’s the beauty of filling consumer demand.

Making healthcare services, drugs and coverage affordable to consumers appears completely disconnected from the industry’s mission to improve care quality and outcomes, and lowering health “costs.”

Free market forces are what bring down consumer prices in most every market. Their introduction into U.S. healthcare will likely cause short-term fallout and financial pain within healthcare industries, but it would leave us, and future generations, with a more sustainable, stronger system. We’ve gotten to the point where healthcare bloat and unaffordability will require sacrifice from all involved.

By allowing consumer-friendly models like DPC to enter the regulated world of healthcare, perhaps slowly through the back door, we will see transformation come from within. History has repeatedly shown us that better models fueled by consumer desire rise to the top.

New Healthcare Brawl, Different This Time

For the thousands of healthcare consumers reading this post…and the millions in attendance across this great country…lllllllllllllllet’s get ready to rummbulllllll!

In this corner – fighting over a period of 68 years, with a track record of unaffordable and ever-skyrocketing premiums, causing long-term wage stagnation, plus lower rates of savings for individuals all over the land. The largely unchallenged, reigning champion in U.S. healthcare coverage for nearly all Americans under 65…….the third-party payers!

And in this corner – fighting for more than 25 years. They’ve captured and controlled healthcare populations, acquired and limited provider competition, all the while driving up costs, consumer medical debt and personal bankruptcies. With a long history of mass overutilization, lower care quality and high administrative salaries……the hospital and health systems!

Ladies and Gentlemen…this same fight took place back in the 1990s, for the purse strings of nearly all the private pay healthcare market. The hospital and health systems took on the risk of creating traditional health plans, and many of them took it on the chin. There were too many operational nuances, such as claims, underwriting administration and attracting sicker patient pools. Not to mention the ire of health payer executives.

The environment is different today. The stakes are far higher. The outcome may determine the direction of more than $1 trillion per year in consumer and employer-directed healthcare payments, transforming the model of U.S. healthcare into one of needed, sustainable long-term growth.

Today’s payer profits are limited, not only by the medical loss ratio rule, but now with provisions of the ACA to accept all patients with pre-existing conditions.

On the other side, health and hospital systems have successfully acquired a significant and well-diversified care “umbrella” over large populations. Many achieve greater leverage in securing higher payer reimbursement rates, all the while still capturing local practices, doctors and newly minted med school graduates, who willingly trade off past, present and future administrative headaches for more patient engagement and a steady paycheck.

See also: Keep the Humanity in Healthcare  

Yet within their growing mini-monopolies, hospitals and health systems, like payers, are also having a come-to-Jesus moment. Medicare quality scores give only 2.8% of all hospitals their highest, 5-star rating. Nearly 70% received only between two to three stars!

There is argument on the factors for these ratings, yet administrators clearly understand that future Medicare payments will be based on value of care, where quality of care is very important. This is especially true as health systems and affordable care organizations (ACOs) will continue to dominate healthcare delivery in the U.S. And yes — future private insurer payments are likely to follow suit.

Let’s Give Health Plans Another Shot

More than ever, we’re seeing health systems creating their own provider-sponsored plans (PSPs) and simply becoming their own payer, even where they can compete for covered lives in the growing Medicare Advantage and Medicaid Managed business.

PSPs come in multiple varieties, depending on the questions asked and resulting strategies formed: Starting fresh or acquiring an existing plan? Partnering or not partnering on risk with existing insurers and provider networks? Covering care only in their care system or with other systems and providers?

Though previously unsuccessful, PSP results appear more promising today. Atlantic Information Services (AIS) data shows there are more than 270 PSs in existence. This is up from 107 just two years ago — and more than one-third have more than 10,000 members. If the trend continues, predictions are that about 70 million Americans could be enrolled in PSPs in five years.

While that is happening, we are seeing payers such as Harvard Pilgrim and others seeking to go the way of Kaiser, adding medical facilities to create integrated care systems. Hence, both payers and health systems are blending more than ever, driving toward integrated care in smaller pockets of populations.

These smaller pockets of integrated care appear to offset more risk, especially when they seek to merge. We are then likely to run into a microcosm of the same anti-competitive pricing fears as with Anthem-Cigna and Aetna-Humana.

Let’s Bypass the Problem…With Direct Contracting

This option allows self-insured employers to work around health payers, by contracting with large, geocentric health systems to deliver care to their employees. By using third party administrators (TPAs), contracted transparent care and drug fees and in-house actuaries and risk managers, employers can also lower claim administration costs. Plus, employers gain other savings by working around payers.

Just a little wrinkle here…What about the many millions of individual members who remain under fully insured payer plans?

Well, we have the growth of health insurance captives, which pools together smaller companies to gain self-insured benefits. But the question still remains…

When health plans get further cut out of the self-insured employer client loop, what happens to pricing for the rest of the remaining payer risk pool? The revenues and profits for payers will need to come from somewhere.

See also: Healthcare: Time for Independence  

We know payers are not getting onto ACA exchanges to acquire more customers. That leaves subsidization from the government to fill in the affordability gap for the fully insured.

Other options are: 1) creating a single pay government plan; 2) providing government incentives to PSPs to be competitive in more local pockets or 3) offering incentives for the formation of fully insured and PSP plans, so payers and health systems can cover more with greater risk sharing.

Healthcare 3.0: Increased quality, better technology, higher taxes, greater unemployment and remaining unaffordability

Health systems have grown by implementing effective leadership, making strong IT investments, reducing geographic competition and employing better risk solutions and strategy. They are going to get stronger with direct contracting, mergers and acquisitions, growth of PSPs, improved care coordination and the use of new technologies in the emergence of value-based care.

Solutions in areas such as predictive analytics, mhealth, patient-generated healthcare data, diagnostic accuracy, supply chain management, population health, chronic disease management, telehealth and artificial intelligence will promote greater efficiency, better outcomes and increased patient satisfaction and drive down cost in key healthcare industries.

But driving down cost DOES NOT mean pricing for care, coverage and drugs will plummet for consumers. I expect mass unaffordability will largely remain.

Look, the first order for businesses in any for-profit sector is to make profit, grow customers and remain competitive. While healthcare consumers and advocates believe in reforming our system to a fairer, more affordable solution for care, coverage and medications, equally for all Americans….businesses don’t.

And they’re not going to succumb to guilt or public shaming, or be willing to give themselves significant salary haircuts to do so. In fact, I would expect that early cost-reduction successes will translate into healthcare companies largely funneling the differences back into themselves as re-investments or profits, while holding prices steady to claim consumer-friendly positioning.

“Hey, at least we’ve put the brakes on higher prices. We’ll try to figure out how to do more…but look, this is great news for now. Be in touch soon!”

The only path I see toward future consumer affordability is to push and provide incentives blending our three-party into a two-party system. With enough healthcare players, greater transparency and relatively equal levels of care quality, free market forces will ultimately work to create a greater downward push for consumer pricing.

A free market system would be painful in the beginning. Healthcare players will not only have to invest in and implement new technology, but also utilize augmented and artificial intelligence solutions. This would drive efficiency and accuracy to the obvious point where industry leaders would greatly reduce and replace their greatest expense…employees.

By the end of 2016, the healthcare sector will be the largest employment pool in the U.S. In a free market, you cannot have bloated employment with acquired technology capable of creating massive efficiencies to drive down cost and consumer price. However, today’s price-regulated market would allow that to happen, where excess expenses are simply passed down to healthcare consumers and employers in the form of higher prices.

Free market healthcare is for now a far-off dream. So as the market slowly transforms and reshapes itself, we will likely see personal and corporate taxes going up.

See also: Is Transparency the Answer in Healthcare?  

With no foreseeable surge in GDP, new jobs or average worker wages, we’re seeing the middle class slipping. Healthcare costs are not likely to translate into significant consumer price decreases. Add to that the past, current and future growth of healthcare subsidies per the ACA exchanges and ever-expanding Medicaid programs. Folks…that big nut will have to be covered at some point.

Parting Thoughts…

Woodrow Wilson once said, “The seed of revolution is repression.” Healthcare has operated on a model outside of free market forces, where consumers have paid the price, literally for decades. In the next era of healthcare, consumers carry an obligation, not just to continue funding this juggernaut, but to take on greater responsibility for their health choices and results.

No matter how this emerging fight changes healthcare, the patient, through greater engagement and care, should be at the center. I see population health management as both educating and necessarily empowering healthcare consumers. Not only to recognize poor past choices and grow from new healthier ones, but to appreciate and value how much they truly need healthcare services, coverage and medications that are simply out of their financial reach.

Perhaps their own transformations will turn large-scale frustration into massive targeted determination, demand and revolution, where elected politicians begin to cower and capitulate, not to special interests, but to a population of healthy Americans who recognize the importance of an affordable and sustainable health care system. So they and future generations can embrace the American dream – and live healthier, less stressful lives while doing it.

I hope to live to see that day.

Keep the Humanity in Healthcare

A part of my life allowed me the privilege of treating nearly 10,000 individual patients. Their openness and trust let me partner with them, deciding on and helping enact a course of care, which often helped change lives.

We lived life together.

Owning a practice means more than just providing necessary healthcare — through ethical and legal means. It allowed me to bring out a greater level of transparency and humanity, while remaining professional. It taught me to always put on a happy face, especially in times of personal stress or upset. I learned to make that one patient in that one moment of time feel like the most important person in the world.

Some may think the majority of patients can’t tell the difference in care and just want their symptom or disease treated. News flash — you’re wrong.  

It may seem as though patients are just putting out their time and money, but really they are giving us a high level of trust and control. Depending on the person and problem, we can have significant influence over the course and quality of their lives, as well as the lives of those closely attached to them.

See also: Key Misconceptions on Health Insurance

Too often, we forget nine out of every 10 patients makes less than $33,000 in income (see below). Nearly 40% of patients carry medical-related debt, and one-third of those must choose between payment for that debt versus rent, housing or heat. Many of these cash-strapped individuals will only come in and choose to make health a priority within later, irreversible stages of chronic disease.

Most everyone knows our healthcare is in crisis. The solution appears clear: improve care quality, reduce cost, increase safety, grow healthier communities and deliver all this with greater consumer affordability. The advent of healthcare technology will certainly help make much of this possible.

But we must not make the mistake of thinking patients will have the same level of dedication to population health, wearables and medication adherence as we do. Patients care about themselves and those they love. They care about money and their financial future. They care about feeling good and avoiding pain — but the pain can be more than just their symptoms and condition.

Health payers acquired a longstanding, terrible reputation for not caring.  Many plan members, who suffer physically, emotionally and financially, felt as though they were treated like just another accounting line item, as if they were just commodities that made the business of healthcare payments go ’round.

We’re at a tipping point. As more risk shifts onto the shoulders of hospitals, providers and affordable care organizations (ACOs), we must not make the same mistakes. Tomorrow’s healthcare will involve and require patient compliance and participation to get the best results.

It is one thing to put technology in place that captures patient-generated health data, but it is quite another to show patients you care about the data. Patients deserve to feel the compassion, caring and humanity in our hearts and actions.

See also: Innovation: a Need for ‘Patient Urgency’

I’ve retired from practice, my career now shifting into the business side of healthcare. I am carefully seeking my next path for the right healthcare company, where I can blend my experience, talents, skills and years of front-line patient experience. The healthcare sector is a target-rich environment, whose underlying industries, more than ever, have a tremendous ability to shape the course and outcomes of human lives.

Technology, big data and Triple Aim aside, we must remember the human condition is more than just condition. It is a place where people reside because they often have lost hope and human support.

In the future of patient data, we must recognize that behind the numbers lives a human life and heart and the potential for physical and emotional improvement.

Hey, Pharma! It’s Time for a Change

As Bruce Buffer, voice of the UFC, would say, “IIIIIIIIIIIIIIIIIIIIIIIT’S TIME!”

In this case, it’s time for big pharma to stop just defending its prices and to start to tap into the consumerism that is transforming healthcare.

Check out these stats (mostly from Google and Decisions Resources Group):

  • One in 20 online searches is for health-related questions.
  • According to comScore, health topics are the No. 1 search category on mobile.
  • 72% of people with pre-existing conditions searched for medical info online.
  • Half of all patients and caregivers already turn to digital channels to look up formulary or dosing information.
  • After a diagnosis, 84% of patients searched for options.
  • In a report by Decision Resources Group of 1,000 physicians, more than 50% reported their patients are more actively involved in treatment decisions — and these doctors called on pharma to support affordable options, provide relevant information and make online information more understandable.

The latest survey from Medical, Marketing & Media (MMM) shows 76% of pharma respondents use digital marketing, but the channel segregation below shows respondents devoted the greatest percentage of their marketing budgets to professional meetings/conferences and sales reps/materials. Digital channels — including websites, digital advertising and social media — lagged behind.

More surprising is that only half of both large and small pharmaceutical companies see the growth of consumerism in healthcare as an opportunity. But that’s EXACTLY where the opportunity for growth lies. To thrive in the new era of value-based care, pharma companies will need to change their marketing strategy toward partnering and will certainly need to focus far more on the individual consumer.

See also: Checklist for Improving Consumer Experience  

Trying to scare politicians away from lower-price reforms with the “It will kill our R&D” excuse is becoming the “BOO!” that no longer scares the grown-ups. Both 2016 presidential candidates, Hillary Clinton and Donald Trump, plan to stimulate price competition through imports — and there is bipartisan pressure to lift the ban on Medicare’s negotiating drug prices. Apart from trade groups and shareholders, high-priced pharma doesn’t have many friends.

Payer pressure is bad enough, but if you don’t get into the value-based care game, you are going to be on the wrong side of a very emotional equation.

Patients have greater financial burdens because of higher deductibles and greater cost-sharing requirements, with varying medication tiers. Providers are ever-burdened with less time, and, now, a greater level of risk is being put on them to deliver higher-quality care, better outcomes and greater patient satisfaction — all at a lower price.

Patients are not just seeking advice from providers. They are increasingly online, and at all hours. Plus, we’re going to start to see greater levels of patient-generated healthcare data with wearables and digital technology. And, as we have seen, half of consumers spend their online time on social media. (HINT: Tap into consumers’ behaviors and beliefs, show that you genuinely care and engage them in ways that let them feel as though you are part of their health team.)

The writing is on the wall. Consumers are practically screaming out what they want and need from you. Partner with wearable and EHR companies. Start developing ways to capture and interact with your customers — specific to individuals, at the best times to engage. Find ways you can partner with hospitals, physicians and affordable care organizations (ACOs) to get into their care pathway in ways that help them lower costs to patients and payers.

See also: Stop Overpaying for Pharmaceuticals  

Say “yes” to predictive modeling, big data, analytics, lots of testing and customer segmentation. “Yes” to retaining some of the traditional marketing. Most of all, become human in your approach. Put yourself out there and let people know that you are no longer on an island, separate from everyone else. Let them know your port and beaches are open to more boats and more people than ever before.