The Futurist

Dr. Reed Tuck­son on find­ing the bal­ance be­tween qual­ity, ac­cess and af­ford­abil­ity

Modern Healthcare - - CONTENTS - Dr. Reed Tuck­son is man­ag­ing di­rec­tor of Tuck­son Health Con­nec­tions.His back­ground in­cludes 13 years at United Health Group, th elast seven as ex­ec­u­tive vice pres­i­dent and chief of med­i­cal af­fairs. BY DR. REED TUCK­SON

Try­ing to look decades ahead is a par­tic­u­larly chal­leng­ing task, made more so by the need to make a num­ber of com­plex as­sump­tions in a rapidly evolv­ing in­dus­try. Any as­sump­tions have to be con­sid­ered with sev­eral vari­ables in mind. And they’re just as com­plex. Con­sider:

The avail­able sources of fund­ing and the ex­tent of mul­ti­payer con­sol­i­da­tion lever­age on the mar­ket­place.

The ne­ces­sity and will­ing­ness to use po­lit­i­cal in­ter­ven­tion to shape the or­ga­ni­za­tion and fi­nanc­ing of care.

The char­ac­ter­is­tics of the de­liv­ery sys­tem, in­clud­ing provider sup­ply/de­mand ra­tios and the sta­tus of provider con­sol­i­da­tion, as they af­fect price ne­go­ti­a­tion.

The abil­ity of bio­pharma and tech­nol­ogy in­no­va­tion to pro­duce value in care out­comes and the re­la­tion­ship be­tween value and pric­ing.

The so­phis­ti­ca­tion of health in­for­ma­tion tech­nol­ogy sys­tems and analytics to pro­vide trans­par­ent and ac­tion­able in­for­ma­tion about the re­la­tion­ships be­tween cost/price out­comes.

The lessons learned and the foun­da­tion es­tab­lished from to­day’s in­no­va­tions in value-based re­im­burse­ment.

The preva­lence of chronic ill­ness— es­pe­cially con­di­tions that are pre­ventable—which will de­ter­mine the de­mand for pre­ven­tive and clin­i­cal ser­vices.

Cost, con­sumerism and value

One trend that can be pre­dicted with some cer­tainty is that the on­go­ing im­per­a­tive for cost con­trol will sig­nif­i­cantly in­flu­ence the ul­ti­mate im­pact of those vari­ables and any as­sump­tions we make. Of course, since no one can pre­dict ex­actly how mar­ket forces will play out over a long pe­riod of time, we need to con­cen­trate prog­nos­ti­ca­tions on what payment should look like as we en­vi­sion the fu­ture.

By na­ture, I’m an op­ti­mist, and over the du­ra­tion of my ca­reer I have de­vel­oped an ap­pre­ci­a­tion for the in­tel­li­gence of our na­tion’s clin­i­cal and stake­holder lead­ers. Given the larger so­cial pur­poses and con­se­quences of payment for health and med­i­cal care de­liv­ery, it is im­per­a­tive that we get it right. So here’s what I see:

Cost pres­sures will re­main a dom­i­nant force that will drive dis­ci­pline in all as­pects of health­care fi­nanc­ing. Ac­cess to health and med­i­cal care will re­main an es­sen­tial pri­or­ity for our na­tion, but it will not be per­mit­ted to ac­count for any sig­nif­i­cant increase in the na­tion’s gross do­mes­tic prod­uct or pub­lic ex­pen­di­tures above what it rep­re­sents to­day.

Health­care fund­ing will be dom­i­nated by pub­lic ex­pen­di­tures at the fed­eral and state lev­els. How­ever, there will still be a role, al­though sig­nif­i­cantly di­min­ished, for em­ployer par­tic­i­pa­tion by those com­pa­nies and in­dus­tries re­quir­ing in­cen­tives to at­tract highly skilled em­ploy­ees. These in­clude di­rect ser­vice con­tract­ing, in­no­va­tive ben­e­fit designs, pre­mium sub­si­dies and wellness ser­vices. There also will be in­creas­ing col­lab­o­ra­tion and lever­ag­ing be­tween pri­vate and pub­lic pur­chasers, pay­ers, and con­sumers as they iden­tify and im­ple­ment strate­gies that im­prove value and con­trol costs.

Of par­tic­u­lar im­por­tance will be the in­creas­ing role of con­sumers, who will have mul­ti­ple op­por­tu­ni­ties to in­ter­act with health and med­i­cal care ser­vices in a true con­sumer mar­ket re­tail econ­omy, out­side of tra­di­tional in­sur­ance, es­pe­cially for routine sick care and pre­ven­tive ser­vices. Many tele­health-en­abled ser­vices, whether de­liv­ered on­line at home or in kiosks lo­cated in phar­ma­cies and other con­sumer-friendly fa­cil­i­ties are but one of many ex­am­ples. The avail­abil­ity of new con­sumer tools, in­clud­ing pric­ing trans­parency and al­ter­na­tive mon­e­tary trans­ac­tion mech­a­nisms—ad­vanced sys­tems fol­low­ing in the foot­steps of of­fer­ings such as Ap­ple Pay, Venmo and bit­coin—will also be fully re­al­ized in health­care. As such, a sig­nif­i­cant amount of pri­mary care will be de­liv­ered out­side of tra­di­tional in­sur­ance.

To­day’s payment sys­tems serve not only to re­im­burse for ser­vices ren­dered but to pro­pel en­hanced value in care de­liv­ery. To­day’s per­for­mance de­mands, in­no­va­tions and best prac­tices will drive the next gen­er­a­tions of physi­cians, other health pro­fes­sion­als and health fa­cil­ity lead­ers op­er­at­ing in well-es­tab­lished, health pro­fes­sional-led cul­tures, fo­cused on the value im­per­a­tive and in­formed by health in­for­ma­tion tech­nol­ogy and analytics. The tenets of “pop­u­la­tion health” philoso­phies and re­spon­si­bil­ity for to­tal out­comes of care will have been firmly es­tab­lished. Mean­while, the mea­sure­ment of care de­liv­ery per­for­mance will be trans­par­ent and based on ac­tion­able met­rics for con­tin­u­ous qual­ity im­prove­ment, net­work in­clu­sion, con­sumer de­ci­sion­mak­ing and payment. As a re­sult, the un­der­ly­ing mech­a­nisms of payment will be firmly aligned with the demon­stra­tion of value. For com­plex and ter­tiary care, the un­der­ly­ing cost and risk eco­nom­ics will be un­der­stood well enough, com­bined with the prac­tice in­fra­struc­ture en­hance­ments noted above, to lead to glob­ally cap­i­tated mod­els as the dom­i­nant payment for­mat. Stand-alone fee-for-ser­vice will have ceased to ex­ist ex­cept in the con­sumer re­tail mar­ket­place.

Given the im­por­tance of unit costs to the payment for­mula, we can eas­ily pre­dict that pub­lic and pri­vate pay­ers and pur­chasers will con­tinue to vig­or­ously ne­go­ti­ate with in­creas­ingly con­sol­i­dated care providers. In­evitably, unit cost es­ca­la­tion will be con­trolled within the lim­its nec­es­sary to en­sure af­ford­able ac­cess to care for all. Un­for­tu­nately, it’s not un­rea­son­able to ex­pect that gov­ern­ment price con­trols will have been nec­es­sary for es­pe­cially chal­leng­ing is­sues—such as phar­ma­ceu­ti­cal pric­ing—be­cause it is doubt­ful that ex­ist­ing mar­ket forces will have re­sulted in long-term so­lu­tions.

Ul­ti­mately, as an op­ti­mist who be­lieves in the cre­ative in­tel­li­gence and so­cial re­spon­si­bil­ity of all the stake­hold­ers in this in­dus­try, I’m con­fi­dent we will de­velop the tools, in­no­va­tions, fi­nanc­ing mech­a­nisms and so­cial poli­cies nec­es­sary to achieve the op­ti­mal bal­ance be­tween ac­cess, qual­ity and af­ford­abil­ity.

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