Healthcare costs are increasing at unsustainable rates. The financial burden faced by patients is considerable. One study found more than 65 percent of all bankruptcies in the U.S. are due to medical debt. Yet despite rising costs, the U.S. healthcare system is very fragile, as evidenced during the COVID-19 pandemic.
Now is the time for the country's healthcare leaders to drive fundamental changes in how Americans consume and pay for healthcare.
Becker's Hospital Review recently spoke with Bill Nordmark, president and CEO of Enlace Health, about the current state of the healthcare industry in the United States and how industry players must work together to make the shift to value-based care.
Industry inertia, incentives and technology are all hurdles in the journey to value-based care
In the healthcare sector, organizations do the same things over and over, yet expect different results. It seems like new approaches and acronyms are constantly popping up, but in reality, they are often the same old models that have simply been repurposed.
"Healthcare organizations rarely look at the disruption taking place in other industries and try to leverage those experiences and lessons," Mr. Nordmark said. "Understanding the dynamics in other industries would be extremely beneficial as we make the shift to value-based care."
Misaligned incentives are also a major problem, serving to constantly drag stakeholders back into the fee-for-service world. In the world of value-based care, aligned incentives motivate all stakeholders to focus on the patient in order to drive better outcomes, better quality, and lower costs.
Another hurdle is the technical infrastructure on which the healthcare sector is built. "Organizations have focused on making changes at the periphery of healthcare, but the tech stack which forms the industry's foundation is still optimized for fee-for-service interactions," Mr. Nordmark said.
Although companies of all sizes — from mammoths like Amazon to small startups — have tried to attack the healthcare problem, many have failed to get it right. A common pitfall is assuming that healthcare adopts technology in the same way as other industries.
"Asking a payer, for example, to modify their technology infrastructure and claims system is a nonstarter," Mr. Nordmark said. "It's also important to recognize that success depends on many stakeholders being at the table, including patients, physicians, payers and tech providers. They all have a role to play. This is exactly what we will be discussing at the upcoming Becker’s Payer Issues Roundtable event.”
Enlace Health focuses on meeting customers where they are. The company helps them transition from the fee-for-service business processes of today to the value-based-care processes of the future.
To build win-win healthcare models, industry players must put the consumer experience front and center
Consumers play a big role in healthcare industry dynamics. Yet, in the current industry structure, it's hard for patients to engage in a meaningful way. "There are very few places where consumers can shop for care or learn about the price of services upfront. The pharmacy is the only place in healthcare where you pay before you get the goods. When the industry moves to a more transparent, value-based care offering that consumers can engage in, you'll see a huge transformation," Mr. Nordmark said.
When it comes to healthcare innovation, the industry has traditionally relied on CMS to launch pilots and other initiatives through Medicare. "Before adopting any new programs, commercial payers will typically take a 'wait and see' attitude to determine if the programs initiated by CMS will succeed," Mr. Nordmark said. "That approach can work in some cases, but I don't think it works broadly."
At this moment, payers have a unique opportunity to build win-win solutions, because they hold the data and they are the center of the healthcare technology universe. To create new models, however, payers need companies like Enlace Health to bring solution sets to the table that enable change. "Partnerships driven by the private sector are needed throughout the entire ecosystem to transform healthcare," Mr. Nordmark said.
"Boiling the ocean" isn't the recipe for transforming healthcare
Many organizations are zeroing in on chronic disease management as a gateway to value-based care. Although more effectively managing diseases like diabetes present significant challenges, individuals with those conditions are major health system users. Therefore, focusing on patients with chronic diseases represents significant opportunities for improvement.
Mr. Nordmark believes that other areas, such as specialty care or surgeries like knee replacements, are also ripe for transformation and are initial areas where value-based care can demonstrate tremendous impact. The return on investment in those areas can show the power and effectiveness of value-based care.
"Part of what holds us back from reinventing healthcare is that everyone wants to solve everything, rather than focusing in on those specific areas where we can make massive inroads and show that change is possible," Mr. Nordmark said. "That's why Enlace Health is fixing healthcare at the core. If we can shift the dynamic from fee-for-service to value-based care, it will unlock the potential to fix many other things that are on the horizon."
Bill Nordmark will be joined by Tom Aubel, AVP UPMC, for the Becker’s Payer Issues Roundtable, where they will address the underlying problems of fee-for-service and the path needed to drive payer-provider alignment in the value-based care world.