Playing the long game.
I’ve been reading the book called The Long Fix, Solving America’s Health Care Crisis by Vivian Lee MD who is the President of Health Platforms for Verily.
She also spoke at the Common Wealth Club last year and honestly, I got turned off quickly. The thought of capitation contracts being the solution didn’t resonate with me then. I’m sure others who have experience managing the contracts can relate.
Capitation contracts work well when there is good structural and organizational alignment. When there is poor alignment, it’s tough to make risk based contracts work.
The demographic trends are still not favorable for companies accepting medical risk. I likened it to a game of hot potato because many companies that assumed medical risk in the past suffered. Why play again if nothing has changed?
Medicare Advantage plans are finding it tough which is why they are running into fraud and abuse issues. If you are taking medical risk or planning to take on more risk, the book is a good one to read now. Let me explain why.
Companies that try to cherry pick [patients and cases] usually run into regulatory troubles. Cherry picking is not a long term strategy and the one thing that is clear from The Long Fix is the title. Fixing healthcare requires a long term strategy.
We have a better understand of what employers are trying to achieve with their health plans. Providers need to build a strategy around the five things that matter to employers:
1/ Evidence Based Medicine: Employers are looking for consistency in the treatment protocols, costs and patient outcomes.
2/ Customer Satisfaction: Employers are considering the overall consumer experience and benchmarking it with prominent retailers like Nordstrom.
3/ Same Day Care: Employers are looking for faster access to care to minimize the cost.
4/ Minimal Downtime: Employers are looking for the least invasive methods of care to minimize downtime and workplace interruption.
5/ Bundled Payments: Employers want to pay a fixed amount for complex procedures to mitigate cost and billing confusion.
Chronic Disease and Lifestyle
Wellness programs have shed light on how to bend the cost curve of those with chronic diseases and how to influence healthy behaviors. A number of digital health companies are now focused on managing chronic diseases and enhancing lifestyle.
The question is who is in the best position to manage that risk. Is the employer, the insurer, the healthcare organization or the digital health company in the best position? Risk requires scale.
Values are becoming more important as consumers look to corporate executives for leadership. The book uses a transparency case study that was more positive than many expected. The case study involved online reviews and sharing both positive and negative reviews so that patients developed a realistic expectation of a specific physician.
No-one is all good or all bad. As an industry and as individuals, we have to be open to constructive criticism. It’s the only way that we improve and meet the needs of those we serve.
The Long Fix
Capitation is about execution. However, even with good systems and processes, healthcare companies will still win some and loose some. To win over the long term there needs to be more economic change which somewhat puts healthcare at odds with capitalism.
That’s why “healthcare is hard” and why the healthcare system is hard to change.