By Nick van Terheyden aka Dr Nick, Principal, ECG Management Consulting
Twitter: @drnic1
Host of Healthcare Upside Down – #HCupsidedown
In 1962, President John F. Kennedy set an aspirational goal for the US space program: to land a man on the moon. The government devoted lavish resources to the project and gathered some of the country’s brightest minds to ensure its success. But the space program was initially beset by challenges and failures—none more devastating than the Apollo 1 cabin fire in 1967 that took the lives of three crew members and destroyed the command module.
But out of this disaster emerged a stronger, better program that succeeded by acknowledging and learning from its mistakes—culminating in one of the greatest technical achievements in human history with the first successful crewed moon landing in 1969.
In 2018, a dream team of highly successful business leaders set out to accomplish a different aspirational goal—provide US employees and their families with simplified, high-quality, transparent healthcare at a reasonable cost. You might remember Haven, a joint venture formed by Amazon, Berkshire Hathaway, and JPMorgan Chase. With deep pockets, grand ambitions, and a culture of innovation, Haven was determined to resolve the issue of rising healthcare costs once and for all.
They didn’t. The high-profile entity disbanded after three years.
What on earth happened?
“I think they just tried to take on too much,” says Greg Bellomy, CEO of Care ATC. “Healthcare is an immensely complex issue. It’s not something that can be solved in one fell swoop.”
But that doesn’t mean it can’t be solved at all. Haven may have failed to launch, but if we can identify and learn from the venture’s missteps, we can ultimately achieve its aim.
Episode NOW on Demand
Greg has worked with some of the most influential healthcare services companies in the country, driving innovation to deliver better care. On this episode Greg explains why shooting for the moon in healthcare starts with going back to basics. Here are a few takeaways from our conversation.
The solution is already here.
One can look at the Haven situation and feel discouraged. If that company—with its elite talent, vast resources, and track record of success across multiple industries—couldn’t fix healthcare, who can?
But as Greg says, healthcare is too complex a problem to solve all at once; it begins with taking small steps. And not every idea needs to be revolutionary. “What we’re learning is that the most overlooked role in healthcare is potentially the best solution for driving down cost of care. And that’s the role of the primary care provider and the patient,” he says. “That relationship can be an incredibly powerful tool for managing total cost of care. And it’s actually one of the simplest things to do.”
Simple in theory, anyway. A massive shortage of primary care providers makes developing those relationships a challenge. And without enough primary care providers, patients often turn to urgent care centers—which further drives up the cost of care. “Those providers don’t have the time or inclination to build a relationship with the patient,” Greg explains. “What follows is typically a pretty expensive process. There’s a lot of diagnostics that get ordered, a lot of lab work that’s done. And a lot of times it’s not necessary, but it’s part of what fuels the development of all these urgent, emergent care centers all over all over the country.”
Employers should get more involved in primary care.
Healthcare costs are unlikely to come down if health systems and urgent care centers effectively own the primary care relationship. For Greg, one of the ways to break that cycle is to encourage employers to get more involved in the plans they buy for their employees. “The employer has a growing opportunity to own primary care for their members.” The problem is, employers usually defer to the advice of insurance brokers and agents.
“For the most part, the advisers to an employer are motivated to keep things status quo,” Greg explains. “Change introduces risk, so there’s not a lot of motive to introduce new, innovative approaches on how to manage healthcare.”
That results in a seemingly endless loop.
“Every year, employers are geared to believe that they’re going to get between a 6% and 10% rate increase,” Greg says, and that’s what they get. “Their advisers tell them ‘that’s the market.’ And so they assume that’s what healthcare costs, and they continue to pay the bill [along with their employees], when in reality, if they took time to understand more about how healthcare is consumed and how it gets managed, they could see there’s a lot of opportunity to spend dollars in a more efficient and effective way.”
A CEO-like approach to healthcare.
Many employers would prefer not to be involved in the healthcare business at all. But as Greg points out, employers who take a greater interest in healthcare could rein in costs while improving their employees’ care. After all, CEOs and PCPs both make critical decisions based on data.
“(CEOs) use data in key indicators to make decisions about product improvement, or improve service delivery,” he says. “Those same indicators work in healthcare as well.”
And more data can mean earlier diagnosis of serious health conditions. “We have claims data, we have biometric data, we have assessment tools from various specialty providers. And now with the advent of wearables, we know we’re going to get even more information that’s available to our providers,” Greg explains.
“And that allows for a proactive outreach approach with [patients] to get them into care before an adverse event occurs. So if you can identify someone who’s hypertensive, but who maybe hasn’t seen a doctor in three years, and they’re on the verge of a coronary event, we can get them treated.” Greg says it’s an approach that can save lives while also saving employers tens of thousands of dollars in additional care. And for employees, it means not just better outcomes—it means avoiding illness altogether.
“For a CEO to really take ownership of this much like they would the rest of their business, they’re going to have to take a more vested interest in how healthcare gets consumed and how it gets managed.”
About the Show
The US spends more on healthcare per capita than any other country on the planet. So why don’t we have superior outcomes? Why haven’t the principles of capitalism prevailed? And why do American consumers have so much trouble accessing and paying for healthcare? Dive into these and other issues on Healthcare Upside/Down with ECG principal Dr. Nick van Terheyden and guest panelists as they discuss the upsides and downsides of healthcare in the US, and how to make the system work for everyone.
This article was originally published on the ECG Management Consulting blog and is republished here with permission.