In 2010, President Obama signed the Affordable Care Act into law. This healthcare overhaul is designed to increase the quality and affordability of healthcare in the United States. Aimed largely at under- or non-insured Americans, the act opened more opportunities for healthcare at an individual and family level, rather than at an institutional level.
But as the overhaul moves forward, changes to healthcare finances have become necessary. According to Dr. Rob Schreiner, Managing Director of Population Health, the way Americans pay for healthcare is rapidly changing. The emergence of more public and private payers is driving this change.
In his keynote address at the 11th annual Goizueta Healthcare Forum on Nov. 19, Schreiner emphasized the implication financial reforms will have on the Centers for Disease Control and Prevention, public health organizations, entrepreneurial interests and academic and medical centers. He also highlighted the role clinical integration will continue to play in the transformation of the healthcare system.
“… What we’re trying to do in finance reform is change the practice patterns of physicians and teams of physicians,” Schreiner said. “The industry believes that fee-for-service is a terrible way to pay for healthcare.”
Schreiner shared a graph showing the frequency of cardiac stress testing for salary cardiologists versus fee-for-service cardiologists.
“Fee-for-service cardiologists have a very different behavior than salary cardiologists,” he said. “Fee-for-service cardiologists, for example, obtain non-invasive testing anywhere from two to 12 times more than salary doctors, when the disease burden in both cohorts was exactly the same.
Schreiner said more volume in healthcare coverage is not translating to quality. The question, he said, becomes how to pay doctors and hospitals in a non fee-for-service way.
Kaiser Permanente selects salary doctors and hospitals rather than fee-for-service equivalents and its rates are 20 to 25 percent less than other healthcare insurance agencies. However, even at its best, Schreiner said Kaiser only garners 40 percent market share.
Schreiner credits this to Kaiser’s closed-network system, which means Kaiser only covers enrollee’s expenses when they go to select, in-network providers. Few out-of-network expenses are covered. Often, the only exceptions are emergency and out-of-area services.
“Americans don’t particularly care for our choices to be limited,” he said. “I could tell you it’s in Kaiser’s interest to pick only those hospitals that are at the top of the game because they tend to have better quality and lower cost. But Americans really do want the full feel of [all] types of healthcare.”
One solution to improve health outside of closed-network insurance companies is to reduce the number of doctors and the hospitals providing care to patients. From a business standpoint, Schreiner said, this would be most effective at cutting costs.
But it’s unlikely.
“The days have passed where the we-and-they phenomenon got us anywhere,” Schreiner said. “We would have to have the big insurance companies in the mix, pharmacies, doctors, hospitals public health agencies and academia.”
So how empowered is the patient to create change?
Patient activation — the level of motivation for self-care a patient has, the amount of information they consume about conditions and the engagement in shared decision-making — can dramatically reduce the cost of healthcare.
“The level of activation of a given patient this year predicts, with a high level of accuracy, their medical outcomes next year and the amount of healthcare they consume next year,” Schreiner said.
In other words, the more knowledge a patient has the lower their healthcare cost.
“Our activities should be less about pushing information to patients and more about engaging them in consuming information,” Schreiner said. “Do you think we will ever get to a care pathway where [doctor and patient] meet halfway to create an activated patient, from one who’s relatively passive today?”
To help answer this question, MBA teams of 4-5 from around the country were encouraged to participate in a healthcare case competition in connection with the forum, held Friday, Nov. 20.
The teams worked for more than four hours to develop their best recommendation to Carolinas HealthCare System’s (CHS) data analytics team on an expanded or new pilot program that would align with healthcare industry trends and CHS’s ability to improve health outcomes. Teams then presented their ideas to a panel of judges from consulting, healthcare and academic fields.
Out of 10 MBA teams from Emory University, Georgia Tech, University of North Carolina and Vanderbilt University, first, second and third places were awarded.
Team Virginia Highlands (Emory University, Goizueta Business School) – $4,000
Recommendation: Create a user-friendly mobile application that enables patients to access information and share data with the hospital care team to reduce readmission rates, hospital costs, improve patient outcomes and promote integrated health management.
Team Downtown (Emory University, Goizueta Business School) – $2,000
Recommendation: Leverage a prior patient segmentation pilot program and existing mobile apps, develop a diabetes prevention and management app that provides a predicted risk score for patients, enables staff to connect and coach patients and partners with grocery stores to help with dietary recommendations.
Team Alpharetta (Georgia Institute of Technology, Scheller College of Business) – $1,000
Recommendation: Create a dashboard integrated with the hospital CRM system that helps bridge gaps among patients, providers, and payers, increasing physician engagement and accessibility, improving patient care and awareness and improving procedures for medical coding and authorization.