There is a clear message that healthcare C levels, informatics and analytics professionals, wellness firebrands, and engagement experts need to learn…and fast.
Three-quarters of providers today have integrated Population Health Management (PHM). But just because your effort (and frankly your business need) is focused squarely on value-based care analytics, patient engagement capabilities, care coordination, and the future of payer compensation attached therein – don’t expect healthcare consumers and communities will readily follow.
I separate healthcare consumers and communities, because they are not one in the same. To believe they are would show unwarranted hubris in the misunderstanding of consumer markets, individual engagement triggers, and primary consumer needs. A faulty presumption in believing many of our citizens desire to engage in, and can afford proactive and reactive lifestyle and health management changes – especially with implementing care services and high cost medications.
Make no mistake. This isn’t just about satisfying a requirement for value-based payments, or tapping more services to offset against future declining reimbursements. But for those health systems, hospitals, care facilities, medical device companies, and drug companies who choose transformational innovation and business models, there will be a large pot of market share and engagement gold on the other end.
I won’t get into all the statistics on chronic disease, obesity-related illness, and the care costs they carry. What I will say is that we have three major obstacles blocking the largest levels of future PHM success:
1) The majority of Americans don’t understand and/or value their health.Sure…they would want lower cholesterol, thinner waistlines, cancer-free bodies, arthritis-free joints, reduced anxiety, and ten more years of life added on – only if givento them – and given instantly.
But asking people, especially those in asymptomatic pre-chronic and painfully long-term chronic states to transform their current mindsets, decisions and actions into long-term behavioral and lifestyle changes, could be as difficult as walking east looking for a sunset.
I give credit where it’s due – because some have made this change. But let’s also recognize past and current environment, learned behavior, the need for immediate gratification, and battling a world of readily available fast food, sodas, alcohol, snack foods, and over-the-counter drugs to mask symptoms.
Add to this, crushing debt, mountains of bills, need to retain a dead-end job or passionless career, relationships, loss of a loved one, or perhaps kids in their mid-20’s they are unexpectedly still supporting. Plus chronic pain and health conditions they carry – which leads into the next point.
2) Mass Unaffordability of Healthcare Coverage, Services, and Drugs. Today, the annual cost of healthcare for a family of four has boomed to $25,826. Healthcare costs are growing faster than inflation and are expected to increase 6.5% through 2017 – where employers, consumers and health plans will continue to scramble in finding affordable options.
Skyrocketing prices have now caused 43 million Americans to be overdue on paying their medical bills – a full third of whom can pay, only by sacrificing monies for housing, heating or food. Individuals having health coverage have seen deductibles rise nearly seven times as fast as wages and inflation. Plus, over 1 million personal bankruptcies per year filed – much due directly or indirectly to medical debt.
Health systems C-suiters, hospital administrators, and providers – you may have valuable care and services to offer, but what good is it if it remains unaffordable? PHM for consumers, communities, and health-data driven HR departments of employers is admirable…but just like money is on your mind – it’s on theirs as well.
3) The Cost of Maintaining Population Health Efforts. Even with today’s EHR products and the big push to integrate population health, services such as telehealth, data management/physician integration for decision-making, texting, and phone calls all take time, money, and effort. While there are pay-for-performance reimbursements, providers have to consider the time balance of their input toward quality vs. additional volume services performed and billed with the same resources and capacity.
A COMING TO JESUS MOMENT…
I want to take a 30,000 foot view of our current health system issue. Healthcare has grown too large in cost. By that, I don’t just mean chronic disease, fraud, abuse, and administration…but even in the levels of salaries paid to healthcare professionals. Plus, there are public shareholders to satisfy through sustained profit margins, as well as the need to improve quality, safety, and outcomes.
Everyone is pointing fingers at everyone else. Solutions are being thrown up against the wall – but very little is sticking to make a difference. (see – Affordable Care Act). Both of our future Presidential candidates have very little understanding or leadership skills to successfully apply to this probably next financial bubble.
It’s a pivotal time in American history and for the future of our next generations. Which makes it the perfect time for transformative innovation.
Where a new business model emerges, that is not only sustainable, but encourages consumer and community engagement. Plus, it drives considerable market share growth for those on board. That said, I’d like to throw my strategy, vision, and two cents in the ring – notwithstanding the value-based care technology that is here today.
This includes three overarching goals which together blend beautifully with, and add a positive feedback loop to sustainable and successful PHM:
- Cut healthcare jobs through dedicated investment and use of A.I.
- Lower medical device, drug, and service prices for greater affordability
- Engage through an expectation of, and pricing for consumer accountability
Artificial Intelligence and Job Replacement
Best estimates put true A.I., where computers do their own thinking and decision-making, at perhaps fifteen years out. However, portions of A.I. including natural language processing, augmented intelligence, machine learning, and even robotic software processing will be more closer-in effective technologies.
Through its partnering with IBM’s Watson, Epic and Siemens are already getting a push on their PHM solutions. However, what I’m talking about is beyond PHM, or even in the best analytics, evidence care and coordination that arrives from it.
My call is first and foremost for hospitals, health systems, care facilities, medical device, and pharmaceutical operations leaders to look at all departments enterprise-wide. Their clear focus on analyzing and optimizing every single task, function, and cross-function in every single human-based job – from executive, manager, employee, consultant, or partner. Replacing the manual nature of human-based work whenever and wherever possible to drive down cost.
In no way do I want to come across as uncaring. However, we must clearly recognize that the purpose of any business is to make a profit, attain customers, and remain competitive in the respective industry – not to keep people employed. Like it or not, healthcare exists as a business within several necessarily interconnected industries.
People say A.I. won’t replace human jobs. That’s absolutely ignorant, and a fallacy many A.I. tech companies seek to admonish for those in HR or who fear large-scale job loss. But the fact is that this will eventually happen – and not only in the health sector.
The fact is that when computers, data, and technology came in the 1980’s and 1990’s – its purpose was to make human work and output more productive. That productivity curve has flattened today. Hence, the next logical step of profit-driven businesses is to cut the most amount of cost, while concurrently delivering far more efficient, safe, and dependable service – with greater consumer satisfaction and results.
If that sounds familiar – it should. We call it the Triple Aim.
The single largest cost in healthcare services is employment; and healthcare has what will soon become the largest employment pool in the U.S. For costs, look at salaries and then add in healthcare coverage, work comp, sick days, FMLA, employee lawsuits, retirement, clashes of personality, vacations, coverage issues, fluctuations in efficiency, quality of job performance, hiring, firing, and outside events such as child care, death, or family stress. Let’s not also forget inability to cover 24/7/365.
It’s not a matter of when job replacement with A.I. will happen – it’s when.
Lowering Prices for Affordability
Years ago, I remember listening to an NPR segment where the SVP of HR for Black & Decker was interviewed. The company decided to cut 10,000 jobs from their Maryland plant – seemingly transforming the nearby city full of workers.
The SVP was asked why the company, in its quest for profit, had chosen to outsource so many employees abroad, when it meant displacing the lives of so many good Americans and their families. The executive responded that this was the last thing the company or he wanted to do. I’m paraphrasing, but the gist of his response was:
“When someone goes to Home Depot, they can either buy a jigsaw for $110 from us – or $65 from a competitor using cheaper labor. If we don’t change now with this market, our company and all of its employees – U.S. and abroad, will be out of business anyway. People want to buy American made – until it hits them squarely in their wallet – and they consistently vote with their wallets – on a regular basis.”
That’s the nature of the free market. Of course, any health economist would tell you that the U.S. health system, through its third party payer system, works in a regulated pricing market, where healthcare consumers and free market competitive forces cannot put significant downward pressure on price.
However, that doesn’t mean that major cost cutting from health services, pharma and even medical device companies, can’t be passed down the chain from supplier to provider to payer to employer to consumer – in the form of lower pricing.
Ultimately, healthcare businesses must recognize that once healthcare becomes more affordable to the masses, it will result in greater numbers of consumers not only choosing to engage in more services, but in believing they can afford the investment needed in managing their ongoing health via PHM.
That’s not to say that cutting healthcare pricing will have many current and new customers lining up with their wallets open. However, the healthcare businesses that do push these lower prices, will not only be a first – but will help offset the negative PR that comes from replacing human jobs with technology.
Another consideration with care pricing decrease is the ability for integrated healthcare systems to be far more competitive in the coverage market. That is, to put pressure on the major payers, by not only helping their communities, but showing that they can pass on savings to associated coverage. A double dip and double win.
Take the Offensive With Consumer Accountability
One of my most well-read and well-liked articles was on Mandating Individual Health Accountability. Eight months later, my opinion and strategic suggestions on this subject are rooted stronger than ever. PHM efforts linked with loss aversion strategy should be implemented.
NO – you don’t get a cookie, a free massage, or bonus wellness points for making positive, measureable changes to your lifestyle and proactive/reactive care management. Rather, if you DON’T get on the PHM program…you’re financially punished. You’ll have savings from the aforementioned AI cost cutting measures – but perhaps you pay an extra 10% more than those who are.
People are motivated by money – especially by having to pay more when they could have paid less. Providers could through this mantra, perhaps reinforce this messaging on their bills, in their upfront paperwork, and during healthcare visits. It is a coordinated sales and engagement effort – always stressing the loss aversion.
“Mrs. Jones, we’re all on the same team. You’re going to get better results, and if you don’t you’ll just wind up paying more than our other patients for the same thing.”
People want to be led from strength. Not bullied, but shown a clear answer where they can make the right decision. Personal decisions are often made on two factors – either by gaining significant pleasure or avoiding a lot of pain. Many times over, studies show that avoiding pain (loss aversion) works better than getting a measurable positive reward.
It’s time for citizens to take on responsibility, and for us to expect that from them. Everyone has a part to play in our healthcare crisis. You can’t just drop your disease, poor habits and excuses on drug companies, doctors and health payers and expect them to fix it.
Most important is that people from the community are screened. The sooner they know about conditions, the sooner they have a chance to manage – and keep longer-term costs potentially lower. Plus, the business of medicine can certainly benefit from PHM driving greater member and service volume.
Ultimately, those healthcare businesses that recognize and boldly employ these three steps will in fact separate themselves from the rest of the pack. Many people today look at doctors, hospitals, and drug companies as uncaring financial machines. For decades, many providers overutilized patient services and billings in the perversely incentivized fee-for-service model.
PHM must be more than just educating and engaging for rule-based compensation. It must be aligned with deep community caring, recognizing triggers, and positioning toward empathizing and empowering through financial leverage.
✾ UPDATE: I will be hosting a new podcast series called Red Hot Healthcare. Each episode will be approximatley 25 minutes, and consist of two parts: interviewing top industry leaders AND delivering current and relevant health sector news. The short format and robust content is expected to gain a strong following from a national audience.
I am interviewing senior leaders for a provider, payer, life science, health service, or medical device organization. Health policy experts and healthcare IT innovators are also considered. I do not endorse any products, technologies, or services on the show.
To inquire about being interviewed, please send your name, title, company name, and background to: firstname.lastname@example.org
Steve Ambrose is a strategy and business development leader who is currently serving on board advisor positions and consults with select emerging technology clients. He is selectively reviewing opportunities for a F/T leadership position, specific to biz dev on the right healthcare team.
He is considered a thought leader and writes for several healthcare IT, artificial intelligence and health policy online media sites. Additionally, he has just finished his first novel, which will be released in November 2016. It is a suspenseful, historical fiction about United Flight 93 – called THREE MINUTES.