Where Health Care Value Can Lead – Care And Cost

Posted on The Health Care Blog on March 15, 2022


It seems inevitable that, in the near future, an innovative health care organization – Let’s call it The Platform – is going to seize the market opportunity of broader value. It will cobble together the pieces, and demonstrate to organizational purchasers that it consistently delivers better health outcomes at significantly lower cost than previously has been available.

To manage risk and drive performance, The Platform will embrace the best healthcare management lessons of the past decades: risk identification through data monitoring and analytics, driving the right care, quality management, care navigation and coordination, patient engagement, shared decision-making, and other mission-critical health care management approaches. It will practice care that is grounded in data and science, and is outcomes-accountable.

But The Platform will also appreciate that a few specialty vendors have developed deep expertise in dealing with clinical or financial risk in high value niches – where health care’s money is – like management of musculoskeletal care, chronic disease, maternity, surgeries, high performing providers, or specialty drugs. It will understand that it often makes sense to partner with experts who can prove and guarantee high performance rather than trying to learn to achieve high performance within each niche. The Platform also will realize that simplicity is a virtue, and that bundling specialized services under one organizational umbrella is easier for health plan sponsors to manage and for patients to negotiate than an array of individual arrangements.

The Platform and organizations like it will spark the interest of self-insured employers and unions, because they’re at risk, and likely to be persuaded by a better deal (and particularly one with guarantees). But they’ll also find reception by other organizations that carry risk or are responsible for managing care and cost: e.g., stop-loss carriers, captives, fully insured health plans, Medicare Advantage plans, Managed Medicaid plans, third party administrators, and advanced primary care organizations. If The Platform demonstrates better performance than its conventional competitors, it might scale rapidly, sweeping the market. Traditional healthcare vendors might find themselves in a more competitive marketplace than they’ve experienced in past decades.

The key here is that, in the US, patients and those who pay for health care deeply want a better way. Most health care organizations pay only modest attention to quality and are holding on to pricing that reflects what the market will bear and that is unrelated to cost, though excellent care can be delivered for far less. The difference between what is and what realistically could be is large enough that an opportunity exists for business to switch to upstarts representing stronger value. What’s needed is an integration platform that facilitates an easy-to-use comprehensive framework of high performing, best-in-class specialty services.

In the health care value-focused community, many organizations have demonstrated that they reliably produce better results, particularly in high value niches. Of course, most vendor organizations are eager to be publicly recognized as “high performance” vendors. The trick is competently identifying those that consistently deliver.

It’s reasonable to believe that a robust ecosystem of risk reduction mechanisms can result in far better health outcomes while conservatively reducing total health spending by 25 percent or more. That said, to my knowledge, no one has yet brought together all these approaches within a single health management organization. Most health plans make more if health care costs more, so they have not yet shown an interest in offering lower cost health care (without compromising quality). But value-based arrangements are finally getting traction and purchaser interest in value is accelerating. The fact that better results are occurring in the market means that high performing approaches will continue to evolve and succeed.

High value models are already being developed by advanced primary care firms like Marathon Health and CareATC, and retailers like Amazon Care and Walmart Health. These and similar efforts could hugely disrupt the current US health system by moderating the excessive services and costs that the legacy health care industry has come to depend on. Going the next step in health care management by assembling and scaling the powerful capabilities of high performers is an opportunity waiting to be exploited.

The fundamental tension within US healthcare is whether our health system will strive to optimize quality, cost and value, or strive to optimize revenues and margins. Responses to this question determine the approaches that characterize every aspect of health care, whether it’s the scientific evidence that guides a protocol, the interoperability of an electronic health record, or whether patients have access to information that can help them make better care choices.

For decades, the industry’s profiteering has dominated health care. The question now is whether purchasers will favor high value, turning the tide and remaking our health system in ways more consistent with the welfare of healthcare’s patients and purchasers.

Brian Klepper, PhD is a healthcare analyst and Principal of Worksite Health Advisors.