Healthcare costs are still soaring well ahead of the rate of inflation while inflation-adjusted household income has remained almost stagnant for more than a decade.
And yet members of a panel of healthcare leaders gathered in Chicago this week remain optimistic that through innovations and a persistent approach to patient-centered, data-driven care delivery the healthcare industry can attack costs and bring them under control.
“This is a gigantic battleship we're trying to move,” said Jeff Wu, associate deputy director for policy at the CMS, addressing a session called “Stretching Benjamin: Making Healthcare Affordable,” part of a three-day Oliver Wyman Health Innovation Summit in Chicago. “It's a whole system change” that's needed, Wu said.
According to the Milliman Index, total healthcare costs for a family four have risen 167% between 2002 and 2015 while, according to the Consumer Price Index, broader inflation for the same period was 32%. Even with a record annual increase in household income in 2015, incomes rose by just 1.3% over the period 2002 to 2015.
“We think there is 30% to 40% waste in the system,” said Chris Lloyd, CEO of the Physicians Network of Memorial Hermann Healthcare System based in Houston and of Memorial Hermann's Accountable Care Organization. If providers agree to and abide by treatment protocols, “when we do what's right, it's cheaper.”
But, despite the advances in healthcare IT adoption, “we still don't have enough longitudinal patient data” from the many disparate sources – competing hospitals, office-based physicians, home health, long-term care, insurance companies and the CMS – to “get underneath the patient experience, defragment the care model” and “use that to reduce waste,” Lloyd said.
At Memorial Hermann, of the 550 primary-care physicians in its network, only 50 are employed by the system and are using its EHR from Cerner Corp. The rest are connected to “varying degrees” using EHR systems from other vendors, including Allscripts and GE Healthcare. The health system offers to fully subsidize a physician's IT costs if they provide access to their patient data and commit 100% to the use of care protocols, Lloyd said.
“This is a big cultural change for the entire healthcare system,” he said. “And by the way it was not easy, it was a long journey for us. Once you get the culture that you do want to change, you have to have the information that's meaningful,” he said.
“Start with quality that you can measure,” Lloyd said, and then, “broaden your definition of quality, wrapping your leadership around it.”
Peter Marino, president and CEO of the Neighborhood Health Plan of Rhode Island, in Smithfield, operates a Medicaid health plan that works with about a dozen federally qualified health centers that provide care to about half of its 185,000 members. The not-for-profit organization also provides coverage to Obamacare enrollees through HealthSource RI, the state's health insurance exchange.
Marino, too, said the plan is trying to reduce the 30% waste factor with an innovative [email protected] program for members with chronic conditions who need more oversight beyond the four walls of the clinic.
Patients are assigned to four-to-five-member teams whose members include nurse practitioners as well as social workers.
“It's like having a little swat team going into the house,” to assess the patient's comprehensive needs,” Marino said. “Many times the issues are not healthcare delivery.” For example, with a diabetic patient, a team might, during a home visit, look in the fridge. If there's “only a bag of tacos,” that's a candidate for diet counseling, Marino said.
The program has been able to reduce participating patients' hospital readmissions by a third, he said. “Understanding the patient, their needs and how they navigate the process and what's swirling around them as they make these decisions is fundamental.”