Adoption of value-based care has gone in fits and starts. The latest news shows adoption has slowed, even while providers recognize its importance. Meanwhile, tech companies are moving faster than ever, and the conversation around patients turning into active healthcare consumers is accelerating – although there is still a lot to work out (for example). Trying to harmonize these two trends is key to managing the current change in today’s healthcare economy while planning for what it will look like in the future. Health:Further CEO Marcus Whitney spelled out what’s happening and who’s responsible. Watch the conversation, listen to the podcast, or read the four main takeaways:
1. Value-based care and the rise of the consumer are running on different but related tracks
The data bears out that the hype cycle that was going on around value-based care isn’t really playing out. It’s very closely connected to the rise of the consumer issue. Because value-based care is a model to try to manage the costs in the current paradigm, which continues to be business to business, with payer and providers covering all the costs and the economic burden for the individual. A true consumer model would be price transparency and marketplace dynamics where you have choice and you have ways to measure quality and things like that.The data bears out that the hype cycle that was going on around value-based care isn't really playing out. Click To Tweet
Value-based care is not really the rise of the consumer. Value-based care strategy for the existing paradigm of payer and provider. And so, the speed with which that’s being adopted has everything to do with the players in that paradigm: Their willingness to do it in the existing structures and the risk and their ability to operate under that model. They’re tools. Medicare Advantage is far and away the leader in terms of a structure with which you can do value-based care.Value-based care is not really the rise of the consumer. Value-based care strategy for the existing paradigm of payer and provider. Click To Tweet
I’m totally up for exploring value-based care. There are case studies out there that show that it does lower the overall cost of care and so that’s great.
2. When it comes to reshaping healthcare, big tech will take the lead
It’s a bad idea to bet against the internet and it’s a bad idea to bet against Amazon. Internet companies becoming middlemen are going to come faster than we ever think they’re going to come.
So long as HSAs continue to grow and self-insured employers continue to be more interested in how they can take more control over their healthcare spend, those are the two big trends driving what we’re seeing when we’re looking at Amazon, Apple and Alphabet all getting much more engaged in this space. If you’re just looking at the size of this market and you’re looking at the power of these companies and you’re looking at market cap of the leaders of the tech industry versus the leaders of the health care industry, not even a question about where this is ultimately going to go. It’s only about timing. But I don’t see how you could possibly bet against the tech titans in this.It's a bad idea to bet against the internet and it's a bad idea to bet against Amazon when it comes to redesigning healthcare. #healthtech #healthinnovaton Click To Tweet
3. Healthcare is changing from business-to-business to business-to-consumer, and Millennials are driving that change
Technology is going to win. Because the mobile phone is going to be the most ubiquitous touchpoint that we’re going to be have. Wearables are becoming FDA approved medical devices and they’re better at understanding complexity. They’re better at it. Compare EHRs with iPhones. The healthcare industry today is a B-to-B industry that has never had to deal with the concerns of a, of a B-to-C industry. And as healthcare becomes more B-to-C, that simple fact is going to be the most difficult thing for leaders of the incumbent legacy industry to overcome. It’s their lack of capabilities, experience and maybe even belief. And as this thing gets more B-to-C the B-to-B leaders are getting further away from shore. They’re getting into deep waters that they don’t know how to swim in.
I think that the generational shift is the inevitable, undisputed shift. That’s where Millennials are going to drive change. Everyone has different opinions about how long that’s going to take but for me them being the number one generation in the labor force sort of says it’s already here.
4. If Millennials are driving the change, self-insured employers are going to manage it
The accelerant is going to be the self-insured employers. How much do they start behaving like activists and taking over control of their employees and that spend. We’re hearing as we go out and talk to people in the industry that their people are looking at direct contracting, not even just huge employers like Amazon, but small to mid-sized employers too. Everybody wants to get a handle on this, and there’s enough tools out there to do it.The accelerant is going to be the self-insured employers. How much do they start behaving like activists and taking over control of their employees and that spend. Click To Tweet
If you’re a self-insured employer and you really want to go to town with this yourself, it’s not just about Amazon, Apple, and Alphabet. There’s a bunch of technology companies out here right now that can really help you to take control of that, to run your own narrow networks, to manage your risk, to get access to your claims and run analytics against it. The question is, do these companies want to hire someone from the health care industry to come in and help them to manage that? But the tools are definitely there now.
Change does take time. It will take time. I’m not here saying that the payers are going to all die and that the providers are going to all die. But it’s fairly clear that something has to give, and it’s giving right now. That’s actually my biggest worry about the value-based care of bit. I don’t think the value-based care bit is going to move as quickly as the consumerism piece. So it’s not to say that the value-based care thing isn’t real and isn’t something to pay attention to. But it can be a red herring. It can be a misleading data point if you’re trying to make value-based care the measuring stick for change in healthcare.