“We as an industry like to admire our own problems.”
Dr. Craig Samitt, CEO of Blue Cross and Blue Shield of Minnesota in his opening remarks at the 2nd annual Minneapolis/St. Paul Business Journal Healthcare Forum.
Acknowledging the cyclical and self-perpetuated problems in healthcare is not new, but the panelists made very specific calls-to-action, challenging the Minnesota healthcare industry to take the next step and solve them. Based on what we heard at the conference, we think Minnesota can be a driver of positive change for the rest of the country to follow. Phil Kaufman, CEO of UnitedHealthcare of MN, SD, and ND suggests that Minnesota is the “Silicon Valley of healthcare”. We couldn’t agree more, and to borrow from our friends at Medical Alley, Minnesota is truly positioned to be the global epicenter of health innovation and care.
Breaking the Cycle
If the existing market participants don’t break the cycle and make dramatic changes, more innovative and agile players will. To go even further, we argue that the entire system needs to be reimagined from the ground up, and each panelist provided valuable perspective on how Minnesota can take the lead enacting change in our industry. To truly enact change, the following steps need to take place:
- Re-imagine how the entire ecosystem (payers, providers, employers, suppliers, device companies) works together and how the industry can move further upstream to truly tackle social determinants of health
- Empower consumers to make informed decisions impacting their care experiences via pricing and quality transparency data that actually makes sense and can be acted upon
- Re-think the constraints that inefficient financing mechanisms place on providers’ abilities to deliver effective care
Re-Imagine the Ecosystem
Innovative partnerships between suppliers, payers, providers, and employers can help end the archaic concept of a ‘plan year’ and instead focus on improving the quality of a consumer’s life across a much longer time horizon.
“The most expensive year of care in a person’s life might be age 7, but if that care enables them to go on an be a productive member of society for decades to come it is certainly worth it.”
Barbara Joers, CEO of Gillette Children’s
That is a powerful testament to the incredible work that Gillette does in our community, and a sobering reminder that we need to meet our patients further upstream in their healthcare journeys.
To that end, let’s focus more on prevention and wellness by examining social determinants of health. Do the places we live, work, and play enable a healthy lifestyle? While Minnesota continually comes in above the national average in terms of well-being, happiness, and health outcomes, deficiencies persist. Panelists cited Minnesota’s infrastructure of an engaged population, enlightened corporate citizens, broad-based education system, economic growth, and advanced clinical capabilities as a strong foundation for wellness and prevention. We need to leverage these assets to eliminate the cycle of consumers becoming disinterested in their care once their insurance deductible is met or becoming overwhelmed by the complexity of medical bills.
Reimagining traditional care delivery models is another tactic some organizations are deploying to drive down costs. The past few years has seen increased investment in telemedicine, data analytics, home-care, and lower-cost outpatient centers for more cost-effective delivery. Employers and payers need to quickly recognize where these innovations drive both improved outcomes and greater efficiency, and then structure financial incentives accordingly. High deductible health plans were started with these concepts in mind, but unfortunately have evolved (or regressed) into a cost containment mechanism for employers. Several recent studies have shown these plans may actually cause consumers to delay care when faced with prohibitively high out of pocket expenses.
From a regulatory standpoint, the Affordable Care Act (ACA) took steps to reduce non-medical administrative costs of payers and standardize insurance contracts, with the idea of passing the savings on to the consumer. While the effectiveness of these programs is debated in political circles, they are well intentioned – to protect patients and make comprehensive healthcare accessible to those who need it most.
It remains to be seen whether more restrictive policies like the ACA or free-market competition and collaboration will be most effective in achieving these solutions. When asked about this concept, Phil Kaufman proposed the right answers likely lie somewhere in the middle. No matter where the answers are, organizations must work in an environment that empowers and incentivizes innovation – where issues aren’t looked at through a political lens. So, what will be the next catalyst to break the mold and buck this unsettling trend?
Leading the Healthcare Change
According to the panelists, everyone needs to have a seat at the table for aggressive change to happen. Too often the conversation revolves around payers vs. providers, which are just two of the players (albeit powerful ones). A truly transformative conversation must include drug companies, pharmacy benefit managers, medical device and equipment companies, technology companies, suppliers, and employers. Sustainable innovation will require broad-based buy-in and participation.
Minnesotans tend to think progressively, and if we leverage that thinking in our daily interactions as peers in the healthcare industry, progress can be made. If we are, in fact, the Silicon Valley of healthcare, there is no better place to serve as the model for healthcare change in America.