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PA Healthcare Forum Insights

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November 2014
IMPROVING HEALTH
IN THE COMMUNITY
Aligning incentives to create
profitable health
US healthcare reform is driving important
and long-needed change across the industry.
Our healthcare system is strained by...
There is potential for new innovative
technologies to fill the gaps in the patient story
and drive an improved understandi...
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PA Healthcare Forum Insights

  1. 1. November 2014 IMPROVING HEALTH IN THE COMMUNITY Aligning incentives to create profitable health
  2. 2. US healthcare reform is driving important and long-needed change across the industry. Our healthcare system is strained by chronic conditions that are increasing as our population ages. Our ability to understand healthcare costs and the available treatment options remain opaque in a digital age where transparency is king. We brought together a leading team of experts to discuss changing models and behaviors in the healthcare space, and how we can ensure that amidst the many pressures of healthcare reform we commit to creating a rising tide which improves the health of all our communities, rather than preserving imbalances which have historically been the norm. In order to encourage patient behavior change, payers and providers need to focus on making the state of health profitable. Changing models and behaviors in healthcare “If you want to produce genuine health in a community you need to do multiple self-reinforcing things. Most community health efforts end up dissipating in the wind – you fix a neighborhood but then people move or funding runs out. We have begun to realize that community health efforts and relying on philanthropy is not the answer. We need to explore new business models which involve long term investments that will bring about meaningful change. How do we make the production of health profitable? – whether it’s healthy school lunches and creating demand for healthy food, better management of chronic conditions, or employer investments in wellness." ESTHER DYSON FOUNDER OF HICCUP AND CHAIRMAN OF EDVENTURE HOLDINGS Recent legislation begins to address the challenge of aligning incentives, and as a result new business models are emerging such as retail clinics within pharmacies. Going forward, an integrated delivery system is necessary to align incentives and the following are several ways this could be accomplished: • Ensuring health “data liquidity” so that data follows a patient • Further consolidation within the provider market as large companies look for new growth markets • Providers assuming more risk and handling roles traditionally managed by payers. Areas such as risk stratification and population health management are increasingly being handled by providers and employers as risk sharing increases. There is a trend of employers moving towards a defined contribution model, instead of percentage model. These models put more direct financial responsibility on patients, changing the incentive model for providers and suppliers. These groups will need to increase their pricing transparency, responsiveness and accountability to patients to remain viable in these new business models. Data Rich, Information Poor: How do we consolidate patient information to help improve patient behaviors to achieve true health? We are capturing more and more data about a patient – whether in EMRs, health insurance exchanges, or new patient generated sources like fitness trackers. Behavior data exists in sources outside of the medical world like social media or search engines. But no concise story about a patient exists – we generally have too much or too little information about a patient at a given time. Big data stores and analytic tools have begun to scratch the surface of truly understanding the challenges in health delivery. Practitioners and patients do not typically understand the full costs involved in healthcare treatment or the outcomes that they provide. Many quality measures used today are in effect measures of whether or not a process was followed and do not necessarily indicate a positive outcome for a patient. 2
  3. 3. There is potential for new innovative technologies to fill the gaps in the patient story and drive an improved understanding of costs and outcomes. These “disruptive technologies” like wearables and cloud based information systems, have the potential to revolutionize the use of healthcare data, drawing new insights that will help improve patient behaviors to achieve true health. However, the benefit does come at a cost – the risk of continuing to create data silos with each new technology will lead to incomplete views of the patient. “Data liquidity” will be the key and brings together both technical and privacy challenges that need to be addressed. One way to approach these challenges would be through strict adherence to standards. Legislation, like Meaningful Use and the Affordable Care Act, establish or tighten existing standards (i.e. HL7, X12) but are not consistently followed across the industry and need to be actively managed to ensure data quality. Building a single view of the patient from their data will require an understanding of the structure of each data source and its value to modeling health. System consolidation driven by the Affordable Care Act will likely provide one route forward as new integrated health systems (similar to the Kaiser Permanente model) are created. This type of consolidation would drive adherence to data standards and quality. Patient Data Sharing How willing are patients to share their data? Patients have lots of data to share, from family histories to personal preferences to fitness information. Some of this data is available in structured forms that can be analyzed, while other requires some effort to extract. However, patients need to be willing to share some level of information if true health measurements are going to be achieved. Patients are generally open to sharing data, but often times the form the data takes or the amount received may not be usable, and the task of capturing patient generated data can be laborious and riddled with errors. Wearable technologies, such as health tracking devices, are an important potential solution to some of the process and data gaps. Tracking programs will help health organizations gather the required data needed, from workout records to drug compliance, all while fitting into the lifestyle of an individual patient. 3
  4. 4. A straw poll during our panel showed that a minority of the audience had exercised that day, while the majority knew that they should have. This is just one example of how difficult behavioral change can be – knowledge alone is simply not enough to drive adoption of good behaviors. Behavioral change is necessary to increase the chances of producing more health, instead of healthcare. Building networks of trust is vital in order to change behavior, and this involves working at a community level to encourage self-reinforcing, improved behaviors. Part of the challenge of accomplishing this is appropriately defining the community and the activities that can occur at each level. There is still significant opportunity to improve public education on the importance of health through media such as public radio and television in the local community and to captive audiences in health settings, such as waiting rooms. Turning education into action can happen at a small, community level. Startups, like HICCup, are evaluating communities to test different models that can be used to drive health changes. Whatever the model, the theme is the same: trusted sources in the community drive behavioral change. Behavioral Change How do you get buy-in from patients to improve their health? What are the next steps in making health profitable? Providers, payers, patients and regulators each have a role to play in making health profitable: • Providers need to fully embrace health information technology and push beyond baseline system requirements to enable more effective usage. • Payers need to adopt standardization and information sharing across the health ecosystem. Data silos only serve short term profitability goals at the expense of long term growth. • Patients need to proactively manage their health data and make it available to both payers and providers on a regular basis. • Regulators, much like they did for EHR incentive programs, need to design programs that address the shortcomings of information sharing between payers. The lines of delineation will need to change between providers, payers and patients when talking about the delivery of health, instead of healthcare. Data liquidity and coordinated models will help drive this change in a profitable manner. Ultimately we will need long term investment in new business models which involve many of the existing healthcare players, but will also need to link in new ones within communities, such as local education and recreation departments, pharmacies and major local employers to improve health as opposed to just healthcare. For more information on our work in healthcare please contact us at healthcare@paconsulting.com or visit www.paconsulting.com. 4
  5. 5. Information on our panel of experts Chris Steel Healthcare expert and Member of PA’s Management Group Esther Dyson Founder of HICCup and Chairman of EDventure Holdings Kathy Bowles PhD, RN – VP of Home Care Policy and Research at Visiting Nurse Service of New York (VNSNY) Matt Portch VP of Commercial Effectiveness, Global Innovative Products, Pfizer Steve Epstein MD, MPP Emergency Physician, Beth Israel Deaconess Medical Center, Boston Aneesh Kumar Head of Consumer Engagement Strategy at Aetna Chris leads PA’s Healthcare and Information Technology Consulting business in the United States. Over the last twelve years, his primary focus has been leading important technology-enabled change in life sciences and healthcare. Esther is an active angel investor, best-selling author, board member and advisor concentrating on emerging markets and technologies, new space and health. She was named by Forbes magazine as one of the most powerful women in American business, and is regarded as one of the most influential voices in technology. Kathy is the van Ameringen Chair in Nursing Excellence and Professor at the University of Pennsylvania School of Nursing, Director of the Center for Integrative Science in Aging, and the Vice President and Director of the Visiting Nurse Service of New York. She leads a program of federally and foundation funded research in the use of information technology to improve health care and clinical decision making for older adults. Matt leads the identification and implementation of strategies to increase productivity, field force effectiveness and improve customer interaction now and in the future through the evolution of the selling model, development of tools, capabilities and resources, and the application of technology and skill/knowledge development across Pfizer. Steve is a recognized expert on emergency department crowding, serving on the Massachusetts Department of Public Health’s Boarding and Patient Flow Task Force. He is one of five emergency medicine delegates to the American Medical Association House of Delegates. Aneesh is Head of Consumer Engagement Strategy at Aetna Inc., a Fortune 100 health care company that empowers 44 million people around the globe to live healthier lives. In this role, he drives the development of new consumer offerings, as well as the strategy around creating a simple, convenient, and valuable experience for Aetna members. Panelist Bio 5
  6. 6. US headquarters The Chrysler Building 45th Floor 405 Lexington Avenue New York, 10174 USA +1 212 973 5900 paconsulting.com This document has been prepared by PA. The contents of this document do not constitute any form of commitment or recommendation on the part of PA and speak as at the date of their preparation. © PA Knowledge Limited 2014. All rights reserved. No part of this documentation may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying or otherwise without the written permission of PA Consulting Group. We are an employee-owned firm of over 2,500 people, operating globally from offices across North America, Europe, the Nordics, the Gulf and Asia Pacific. We are experts in energy, financial services, life sciences and healthcare, manufacturing, government and public services, defence and security, telecommunications, transport and logistics. Our deep industry knowledge together with skills in management consulting, technology and innovation allows us to challenge conventional thinking and deliver exceptional results with lasting impact. 1924-24

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