Joe Flower on shifting to riskbased payment
The changes will be driven by the new economics of healthcare embedded in the “volume to value” movement, based as it is on “provider-sponsored risk,” the basic, obvious and yet startlingly opaque logic that you deliver what you are paid to deliver—so if you are paid differently you will deliver differently. If you are paid fee-for-service, you will deliver it in ways that derive the maximum of fees for the maximum of services. If you are paid based on being at risk in one way or another for the health of the patient, you will invent, implement and evolve the most efficient ways to deliver the health.
We are right at the beginning of this change. Let’s examine it.
What way of distributing care is best for health? Care should be easily and widely available, especially in an emergency or crisis. When we need it, we should have easy access to the best that medicine has to offer.
The rest of the time, care should be seamlessly woven into our lives, expertly helping us prevent or manage disease and fine-tune our own body systems. And it should not bankrupt us. It should never force us to choose between buying our cancer drugs and paying the rent or buying food for our children.
The fee-for-service system encourages, indeed demands, that healthcare organizations provide care in some kind of opposite-land construct, making it scarce, hard to access both physically and financially, based entirely on episodic care delivered only face-to-face with the individual clinician in the clinician’s preferred place of business.
Risk drives change
Now providers are taking on risk in a hundred different ways, from bundled payments to accountable care organizations to risk-based employer and Medicaid contracts. All of these encourage and in some ways demand that providers flip the scenario, bringing as much care as possible closer to the patient, with more seamless help as constant as is helpful, with greater support for those who need it most and at lower cost not only to the patient but to the payer.
This movement to provider-sponsored risk is just beginning. The end point will likely be that most people in most situations will be covered by comprehensive capitated insurance, with their medical needs provided by large regional networks. These organizations will offer seamless care, including preventive services, primary care via group practices, retail and urgent settings, as well as chronic and acute management. They will also provide post-acute options and the full array of specialized services. Despite the comprehensiveness of these largely capitated regional systems, the demand for efficient, lower-cost quality care will mean they also must have the flexibility to offer their patients contracted services elsewhere for specific types of major care, such as cancer care, joint replacement and cardiovascular services.
Ecology of touch points
Healthcare distribution will change on every axis: time, place, frequency and manner. Care at the basic and chronic level will be provided through a wide variety of touch points, including primary medical homes; on-site clinics at work, school and elder-living facilities; pop-up clinics at churches; retail care in big-box stores, urgent care at the mall; house calls for “super users” and immediate discharges; and a web of sensors for those who need it, including an “internet of things” in the home environment—the toilet, the mirror, the television; health watches, contact lenses, smart patches and implants—all tuned not just to provide individuals with their own information, but to tie them into their family caregivers and the clinicians with whom they have a trusted relationship: their doctor or nurse practitioner as well as the system’s electronic health records.
These constant digital connections can support the trusted personal relationship with the clinician and the system. They cannot effectively initiate or replace that connection. Automation and artificial intelligence can be powerful in building effective and efficient healthcare, but they can never substitute for the core relationship with a clinician.
The shape of these changes will be driven by multiple parameters:
The broad drive for practical, effective health management for whole populations.
The narrow need to target extra help for the “super users” with multiple chronic problems and frequent emergency department visits, as well as specific high-use groups such as mothers with young children.
The deep economic value in both cases of moving closer to the customer and earlier in the disease cycle, as well as strongly connecting not only with the patient but with the patient’s home caregiver, child, parent, spouse or close friend.
The development of rapid, effective, constant technologies for connecting the customer to the system over chronic-care cycles
The effective need to build all of these along lines of trusted person-to-person connections.
Trust—the engine of efficiency
The last of these is critical. In all this change, the least understood engine of efficiency and effectiveness is trust. Particularly in population health management, prevention and primary care, the trust and cooperation from the patient and the patient’s family is an essential element. The business model doesn’t work without it.
As we are building out these new networks and touch points, many strategists are madly reaching for tactics that actually reduce the person-to-person human element. It doesn’t work. The experience of multiple pilot programs and repeated studies show that prevention or population health management by robocall, or call centers with scripts, or nags via text message, simply does not work. People do not change their lives and habits based on a message or call from a stranger.
As we move forward under the goad of risk-based payment systems, systems will quickly discover what does work. Building and strengthening trusted personto-person relationships will become a foundational part of the new shape of healthcare.