It’s no newsflash to say that healthcare in the U.S. is broken, the “tapeworm” on the U.S. economy, as Warren Buffet calls it. From patients to politicians, there are constant calls to lower the cost of healthcare. Some of the biggest economic successes of our day—Berkshire Hathaway, Amazon and J.P. Morgan Chase—teamed up to form the ill-fated healthcare start-up, Haven, but even they weren’t able to break through to a solution. Like Keith Hovan, perhaps you find yourself wondering: Why can’t anyone seem to figure this out?
Part of the problem is that many of the major players trying to solve the problem have a conflict of interest because they have holdings in healthcare companies that they want to see grow financially. Berkshire Hathaway holds a large position in DaVita Dialysis. Jeff Bezos purchased Pill Pack and has created an online pharmacy through Amazon. Amazon’s Clinic is designed with 24 different symptom constellations to guide individuals to Amazon’s recommendations. These online patients can fill out a survey and pay a fee to get a prescription delivered to their door. Most of these companies don’t have any real interest in being providers; they just want a cut of the ever-growing healthcare revenues. Relying on big companies to come through with big innovations is not the solution to lower healthcare costs.
Tug of war
The only way to solve the problem of healthcare costs is to educate, empower, activate, and engage patients. Providers and public health programs need to give patients the information they need about their own health and how to care for themselves, but patients must also be educated about the real costs of healthcare. While it is beneficial to patients to have an employer who provides health insurance for them and their families (allowing them to pay only a co-pay or co-insurance percentage for care) this often keeps the patient from having a complete understanding of what different types of care cost. Keith Hovan notes that patients need to understand the difference in actual cost between, for example, a visit to the emergency room versus a trip to their primary care provider because the choices of the individual contribute to the increase or decrease in the costs of healthcare overall.
When one considers U.S. healthcare spend, while corporations pay the most for healthcare provided through employer-sponsored benefit plans, the government is the second largest spender (and, depending on the age of the patient, sometimes the biggest). It’s as though there’s this tug of war over the patient between those who pay for care (e.g. government and corporations offering employee benefits) and those on the other end of the rope (e.g. the actual providers of services, health systems management, and commercial payors). There’s a symbiotic relationship between payors, health systems, and providers. They have a shared business goal: to increase revenue, drive more utilization, and increase the number of services provided. It’s a team effort that serves to drive costs higher, while corporations and government are trying to pull the rope in the other direction to decrease costs and improve quality.
Power to the patient
We have a system that despite many individuals’ best efforts continues to be broken. Even with the herculean efforts of some of our nation’s brightest leaders to fix the system, there has been a consistent spring of failures to improve it. I think many of those failures are a function of the adage, “Where you stand depends on where you sit.”
Picture two sides of patient care: the “A side,” or what happens before the patient gets to the healthcare system, and the “B side,” or what happens after the patient is in the healthcare system. For a long time in U.S. healthcare, we have focused almost entirely on the B side. But once a patient is in the healthcare system, expenses increase rapidly. If we can engage patients early on, activating and engaging them before they are in the healthcare system, we can arrest the progression of symptoms, provide them with the education they need to care for themselves outside of the system, and avoid the costlier side of healthcare.
The fact is, the sickest of the sick will always get the care they need. But we need to unclog this system, which will generate many positive benefits. If we can get to patients earlier in their care trajectory, reaching them in their homes via whatever technology they have, we can give them more tools and information to care for themselves, eliminating unnecessary (and expensive) visits to the ER. If we reduce ER admissions by even 10%, that represents billions of dollars in lowered costs!
This shift will have huge downstream benefits. Even for the entities who may not have the most genuine motivations, it will help them to reduce their costs. As a healthcare leader, I see that we’re on the treadmill. We’re running, but not seeing that there’s a better way to do this. It’s about driving the right patients to the right providers for individuals who truly need it, and empowering others to care for themselves outside the healthcare system.
To do this effectively, though, we need to recognize and eliminate barriers to access, such as homelessness, income inequality, or access to healthy food, to name a few. We have to foster equity and community engagement. This is no small task, but it is possible.
Conclusion
The current state of U.S. healthcare really is shaping up to be a tug of war, with the patient as the string in the middle. The government and corporations want the patient to be on the value-and community-based side of the line, while providers and payors want the patient to be on their side in order to drive revenue.
As we can see, current efforts are not working. Healthcare costs are out of control, approaching 19% of GDP. Certainly there needs to be cost containment, but it should not come at the expense of denying care. We have a system that isn’t equal or equitable. Keith Hovan knows patient engagement is the solution. We have to pursue innovation that levels the playing field and equitably increases patient access and engagement while also reducing costs.
