By Robbie Hughes, Founder and CEO, Lumeon
As the dust settles from the holidays and the reality of a new year starts to dawn, a new round of healthcare pricing legislation is set to upend our industry. Despite protests from every angle, new ways of pricing healthcare are coming, whether in the form of ‘value-based pricing’ or the simpler (yet potentially more impactful) ‘pricing transparency’.
But this is more than just a new way of writing contracts. What is being described in this brave new world is a structural change that will force providers of care to fundamentally shift how they think about care delivery.
When analyzing the cost of care, it’s pharmacy and supply chain that are the usual go-to places. But the reality is that human and process costs are both the most significant, and often the most variable forces that drive cost – but they are also the hardest to change.
However, where pricing is to be published upfront, it is only with meaningful control on care delivery process costs, that the business of healthcare can be brought to a place of long term sustainability.
Beyond price, it is these process costs that are also the most impactful in terms of consumer experience. For example, calling a patient 7 times across a supposedly simple surgical process to collect the same information time and time again is not only expensive, but also alienates the patient while being detrimental to the brand of the health system.
Much of the opportunity lies on both the administrative and clinical sides, and at their intersection: for example, on average, 50% of cardiac readmissions at 30 days can be prevented by simply ensuring that the patient attends their follow up appointment.
Determining the right care, for the right patient, at the right time, and then actually delivering it is easy to say, but almost impossible to carry out without fundamentally reorienting models of care delivery from reactive to proactive.
These examples show what I mean:
A reactive health system will have a post-acute team whose job it is to chase patients after discharge and call them to see if they’re OK so they don’t ‘bounce back’. A proactive health system will know that the vast majority of post-acute risk factors can be determined before the patient is even admitted – and they would then deploy a personalized discharge plan that accounts for these issues, even before the patient sets foot in the hospital.
A reactive health system will remind patients about their appointment 2 days before with 3 phone calls (that may go unanswered) and hope that the patient remembers to come in. A proactive health system will nurture the patient from the point of scheduling all the way through to their attendance, reminding them what preparatory steps they might need to take and even telling them where they can park to ensure they make their appointment on time.
A reactive health system will be focussed on maximizing provider utilization and will try to book them up with as many appointments as possible. A proactive health system will maximize provider utilization with those patients that actually need provider-led care, and will flow lower-risk patients to lower touch contacts such as phone calls, virtual visits or, where appropriate, nurse-led care.
In a world where health systems are reimbursed on activity, there has been little or no incentive for thinking in this way, but in a world where health systems already have 25% of their revenues subject to value-based payment and must publish online the cost of common procedures – to balance risk in aggregate to get to a price that is actually deliverable – the optimization of the process of care is going to be the critical thing that drives both profitability and consumer experience together.
For the proactive health system, profits and consumer experience are going to be inexorably linked and for those that don’t transform, there will be only one outcome: a downward spiral that starts with a loss of patients and ends in a terminal decline.
Whether it’s the consumer or the government that drives the change, it’s inevitable and it’s coming far faster than anyone expects: the age of the proactive health system is here – are you ready?