Nov 7, 2019
Previous blogs have explored different aspects of consumerism, the driving force behind the shift from volume to value-based care. The success of new delivery models built to improve patient experience and satisfaction would not be possible without collaboration across healthcare’s verticals.
That’s why it’s fitting that for our final post in our Series on Simple, we discuss convergence. When we pool our expertise and resources to streamline care delivery, we can achieve better outcomes and lower costs.
How We Got Here
Healthcare’s primary stakeholder groups, providers and payers, have traditionally operated in siloes. Previous to the Patient Protection and Affordable Care Act’s (ACA) introduction, payers reimbursed providers for services rendered. The ACA shifted power to patients by upending the longstanding fee-for-service model and forcing insurers to pay physicians, hospitals and health systems for the value of care provided. Healthcare became less transactional and more personal, allowing patients to become active participants vs. mere recipients.
To meet operational requirements and ultimately succeed in the industry’s new normal, new models of care and financing emerged. To make care more cost effective, alternative payment models came into play. Enter Accountable Care Organizations (ACOs), which group doctors, hospitals and other care providers together, pooling resources to provide the highest quality care possible to Medicare patients. Bundled payments set pre-determined prices for certain episodes of care and made it so insurers made one reimbursement instead of individually paying all providers – nurse, anesthesiologist, physician’s assistant, surgeon, etc. – involved. Often referred to as “payviders,” some hospitals and health systems dipped their toes into assuming financial risk by forming agreements with health plans, allowing them control over the direct impact the care they provided had on how much they were paid. Some provider organizations even created their own insurance plans.
At the same time healthcare began undergoing massive change, another significant evolution was occurring. Technology was becoming smarter, more accessible and personalized. The introduction of the iPhone, Apple Watch, Amazon, and an innumerable number of other modern products and services fueled consumers’ expectation of – and demand for – speed and convenience. Implications of advancements in technology were far reaching and healthcare was no exception to the rise in consumerism. Newly equipped to do so, patients monitored and managed their health and wellness and interacted with care providers in new ways. New methods of information sharing benefitted providers and payers, providing an influx of data and painting a more holistic picture of patient’s health.
In retrospect, looking at the trajectory of the healthcare and tech industries and how each support the other, their convergence feels inevitable.
Growing (Together) Pains
Over the past decade, these foundational changes in how the business of healthcare is conducted have spurred no shortage of new models, alliances, and market entrants. As population health management continues to take hold, blurred lines between providers and payers are bringing into focus the need for enhanced health IT and alignment at the administrative level.
New methods of collaboration necessitate seamless information exchange. The availability of usable data, integral for accurate electronic health records, is one of the most significant barriers to convergence because payors and providers possess different technologies that work with varying data sources. A proper IT infrastructure leverages disparate streams of information and legacy systems and incorporates information from wearables, social media, patient portals and other modern data sources to extract meaningful insights.
More broadly, organizational alignment and buy-in is imperative for any payer/provider partnership. Navigating reporting structures and company cultures in an industry historically slow to evolve presents its own set of challenges.
Progress, Not Perfection
While payer/provider relationships have soared in number and depth of scope in pursuit of achieving the Triple Aim, survey results published by Modern Healthcare earlier this year reveal opportunities for payer/provider alignment abound.
Survey respondents named reimbursement pressures their organization’s number one concern as they look ahead to the next five to 10 years. Technology modernization and meeting value-based care goals and requirements ranked among the groups’ top five organizational worries. Given these admissions, it’s not surprising that more than half of those polled admitted they “aren’t prepared to handle risk and financial management in their journey toward value-based care.”
Despite trepidations, the outlook for continued convergence is bright. Organizations considering a convergence strategy or in the planning stage of one can gain inspiration by looking to successes achieved by industry peers.
With the goal of lessening occurrences of chronic disease and understanding the importance of addressing the whole person, CVS earlier this year began piloting HealthHub, a pharmacy/retail concept, in select stores. In addition to providing over-the-counter medicines and prescriptions, the “Hubs” offer products such as yoga mats and wheelchairs, and services, including nutrition counseling and fitness classes, to address social determinants of health.
Kaiser Permanente, one of the first payviders, has grown its number of covered lives to more than 12 million.
Why have CVS and Kaiser’s convergence ventures succeeded while so many others have failed? Organizations seeking to achieve convergence must prioritize the needs and wants of modern consumers and:
- Think differently – Old ways don’t result in new outcomes. With consumers at the forefront, consider how to manage your population instead of how to meet pre-determined financial and other operational goals.
- Plan differently – Start small and consider a test-and-learn approach. CVS, for example, initially tested its HealthHub concept with only three locations in a single city. Getting your feet wet, learning from early missteps, and course correcting will lead to your initiative’s long-term success. Technology’s role must be a key consideration in the planning process vs. an afterthought.
- Act differently – Harness technology’s power and leverage data-driven insights as you execute your converge plan.
Remember: a journey of a thousand miles begins with a single step.
To Be Continued
Healthcare is undergoing a tremendous period of change. Those willing to work outside the box with a consumer-centric approach will be best positioned to succeed.
Executives hesitant about the future can take comfort in knowing they’re not alone. Tools including emids’ new Advanced Data Management Platform (ADMP) combined with its expertise in data and analytics, quality measures, population and care health management, and digital health helps payers and providers maximize and realize the potential of their convergence initiatives.
While this concludes our blog series on the topic, you can find further discussion on the industry’s path to digital transformation via our annual Healthcare Summit recap. If you were unable to attend in 2019, check back here for a recap of our Summit CDO Roundtable: Making Digital Doable.
Overseeing payer and digital solutions for emids, Dr. Praveen Soti is a physician thought leader and healthcare business and digital innovation executive with more than 18 years of health tech experience across private and public sectors in North America, EMEA and Asia Pacific. Dr. Soti holds an MD and MBA and is an alum of the Stanford Graduate School of Business. He served as a past board chair of the Microsoft Health Users Group. He has been a featured industry speaker at the World Congress, Harvard Patient Safety Colloquium and HIMSS-Microsoft HUG. Be sure to connect with Praveen on LinkedIn.