Heathcare

Post: Cost of Healthcare

Lower healthcare costs or jobs?

There is enough evidence now that the cost of healthcare in the US is driven by the fragmentation and the adverse demographics.

1/ Medical supplies cost healthcare providers 30-40% of their revenue and the cost of supplies are substantially higher than other developed countries. For example:

– Pharmaceuticals in the US cost 3x more than Britain and and 4x more than Canada.

Medical Devices cost 2 – 6x more than other first world countries.

2/ Billing and collections for services provided to patients cost healthcare providers between 6-12% of their revenue due to the number and complexity of contracts with insurers.

3/ The fragmentation in the payer market results in the coverage and  pricing variability in healthcare services that many American find confusing and alarming.

The increase in the cost of healthcare has returned to pre-recession levels of 4% which is largely driven by demographics:

1/ American’s population is aging slower than other developed countries but the 65-and-over population is projected to balloon from 48 million to 88 million by 2050.

2/ According to the CDC, the prevalence of obesity was 39.8% and affected about 93.3 million of US adults in 2015~2016. Obesity is now the #1 cause of cancer in women.

The flip side of is American jobs.

Learn More >

Post: Values

Salesforce is one company that truly walks their talk.

Here’s what I inferred about their values and culture from just one day at Dreamforce:

1/ Environment: Be Mindful. All the nomenclature and products used referenced the environment reminding us all to tread lightly and reduce our impact.

2/ Transparency: Build trust. Customers asked for greater pricing transparency so what are they getting….published rates! Transparency is used to build trust within the organization and with customers.

3/ Inclusion: Be Open. The diversity of the people attending, speaking and customer involvement spoke to their commitment to inclusion and the value of sharing of ideas and lessons learned.

4/ Community: Empower. Community leaders are recognized and empowered to help everyone thrive. After all, big initiatives take a village to do well.

BTW – they are doing some pretty amazing things with their technology too that will help us all blaze new trails. We’ll share more about that in future posts.

Post: Rules

Not all rules are made to be broken.

The healthcare industry has always struggled with patient compliance. Many patients stop taking a prescription or adhering to a care plan as soon as they starting feeling better.

It’s a huge problem for physicians trying to adopt value based care models because non-compliant behavior often results in the need for more healthcare. Under value based care that additional care is provided at the physician’s expense. No wonder physicians are not keen on the new risk models.

Ideally every American should understand how they respond to rules.  However, it’s likely another thing that physicians need to address with patients to increase compliance.

There are 4 responses to rules:

1. Upholders: Uphold all rules both outer and inner.

2. Questioners: Questions all rules and uphold only the rules that make sense to them.

3. Rebels: As the name implies, they resist all rules.

4. Obligators: They are motivated by outer rules but not inner rules.

EMR companies should consider updating Patient Registration screens to capture patient’s rule behavior and to identify the Questioners and Rebels who are less likely to comply with meds and care plans. Rule behavior should also be factored into reporting and payment to avoid penalizing physicians.

 

Post: Fixing Problems

Go slow to go fast.

Most people call us when they have a problem and they are having trouble fixing it. Reflecting back on completed projects, the underlying issues are one or more of the following:

1/ Flawed assumptions: Assumptions are made about what’s causing a problem without checking all the facts.

2/ Timeline: Deadlines to get the project done and the need to get it done overshadows whether it’s the best solution or not.

3/ Perception: People outside the department or discipline don’t understand or don’t care enough to prioritize your needs.

Taking a step back to reassess things is hard but it’s worth taking the time to get it right.

What we know to be true:

1/ People might not understand your needs but that doesn’t mean they don’t care.

2/ Often systems and processes just need to be fine tuned. Fine tuning requires less work than starting a new for your limited resources such as engineers.

3/ Deadlines are sometimes arbitrary. Know whether the deadline is someone’s ideal deadline or a real one and why.

Best Advice: Take the time you need to understand the problem. Developing and implementing the solution will go much smoother and faster.

Post: Self-Care

What do you do afterwork to decompress and recharge your batteries?

It was a ice-breaker question that members of a business group needed to answer as part of their introduction. Almost everyone in the group started with something along the lines of “well I know that I should be exercising” but what I really do is …. guess what they said.

As some of you know, I’ve been trying to get more people working out and living a healthier lifestyle [aka: Hello Workout]. My introduction was last so there was no bias in the responses for what I do or anything that I said.

After hearing everyone’s “confessions”, I almost felt bad introducing myself and sharing a bit about my lifestyle. If you’re wondering, I am a strong believer in regular maintenance whether it’s my car or my body. Both work better when they are cared for properly.

Inspiring, nudging and telling people to workout might not be the right approach. It makes people feel ashamed and it makes people initiating the conversation feel bad. It’s awkward all the way around.

Many in the business group talked about caring for others. There is no shame in caring for others. So maybe the better question is “How do you care for yourself?“.

Words are powerful. Simple changes can make a big impact.

Shame steers people into a life of silence, inactivity, lying and hiding.

~ Harriet Lerner

 

Post: Balance Billing

More regulations or should we fix the payment system?

Years ago, I attended a ABA conference and asked “why don’t we just fix the payment system” rather than add more regulation. I am reminded of that event this morning in reading the KHN proposed options for addressing balance billing.

The proposed solutions are a bunch of new federal and state laws addressing charges and billing practices. Regulation is an important part of protecting individual Americans against corporate wrong doing. However when regulation is used as a bandaid, regulations become part of the problem.

In the case of healthcare, additional cost. High cost is one of the big issues that the industry needs to address in order to make healthcare more affordable.

The problems that need to be addressed are:

1/ Fragmentation: Makes it difficult for patients to navigate and costly to administer.

2/ Network: Not all providers participate in commercial networks which means some patients are exposed to balance billing.

3/ Transparency: Insurers and healthcare providers don’t want their contracted rates shared to enable the consumer.

4/ Current Billing Regs: Healthcare services and products are marked up because everyone needs to be charged the same and there is variability in the contracted rates.

The problems require a more fundamental change.

Universal healthcare

Is it the end of employer-sponsored healthcare or the beginning of employer-driven healthcare?

When I posed this question to my Linked In network, many people viewed the post, some followed up for links to sources but no one commented even though healthcare is top of mind right now for many Americans.

Healthcare is an emotional topic. It’s something that everyone wants and needs but most Americans are struggling to pay for it. The healthcare jobs boom is still going strong which means the total cost of healthcare is continuing to increase. While there doesn’t seem to be a rolling average cost of healthcare per GDP publicly available to see the impact, the math is pretty simple  – more jobs means there is more healthcare being delivered which means more cost.

The total cost of healthcare will not decrease until we curb demand. 

Consumer Driven Healthcare initiatives failed.

Consumer driven healthcare initiatives such as high deductible health plans curbed demand in the short run but resulted in more costly healthcare outcomes. Americans simply couldn’t afford to pay their premiums and the patient portion of healthcare services under those plans. Consequently, they didn’t seek treatment until their health issue became a big problem. In simple terms, big problems cost more to treat. Other consumer initiatives such as pricing transparency never really saw the light of day.

Employer-Driven Healthcare

Employer-Driven healthcare is a new theory and consistent with the Republican trickle down economic policies. The assumption is that if the Republicans can tweak policies enough to get the economy to full employment, every American or at least nearly all Americans will get a job with healthcare benefits. In theory, all employers will offer benefits that are rich enough to ensure timely access to healthcare services.

Some employers are taking initiative to implement on-site and near site clinics, lower deductibles and implement wellness initiatives even though there is a perception that wellness doesn’t work.

There are ways to make wellness programs work better but the key words for an employer-driven healthcare system to work is ALL and SOME. If only some employers offer rich benefits, many Americans will continue to be underinsured or uninsured.

Medicare for All

The idea of “Medicare for All” was endorsed this weekend by former President Barak Obama. The initiative is gaining traction due to the economics and financial condition of Americans.

1/ Healthcare is becoming a bigger portion of the take home pay of low and middle income Americans which means they have less money to spend on housing, food, clothing and other life essentials that affect their health and wellbeing.

2/ The middle class is eroding to the point that it needs to be supported with social wealth-fare spending. Reportedly, $1 in every $7 is now spent to subsidize the middle class.

3/ Republicans are working to privatize Medicare. More health plans are getting into the Medicare and Medicaid business. According to the press release for Oscar Health, it is a more “lucrative” segment. Oscar [co-founded by Jared Kushner’s brother, Joshua] historically sold individual and family plans on the exchanges. Many of the people purchasing policies on the exchanges were sicker and needed more healthcare than expected.

4/ New Medicare Advantage plans are now addressing social determinants and covering many basic living costs. Bankruptcy filings are increasing in the senior population.

5/ Koch brother sponsored study reports “Medicare for All” saves $2 Trillion.

What does this mean for healthcare?

If we just look at the economic condition of many Americans and how the financial strain is impacting their health, it’s clear that we need a new universal healthcare system.

If we consider the changes underway to Medicare and the momentum of the “Medicare for All” movement, it looks like Medicare will be the underpinning of the new universal system. It’s a good thing for you because all or nearly all healthcare providers participate in Medicare, it has well established coverage standards for medical care along with a fee schedule and excludes bad actors from participation.

If we factor in everyone’s deep seated emotions about healthcare, we need a system that offers choice.

What we end up with is a two tiered system offering basic coverage for all Americans and enhanced benefits for those who choose and can afford to purchase additional coverage.

Simplicity wins:

There are plenty of models in other first world countries that can serve as a framework. The key is choosing a framework that simplifies the healthcare system for all to navigate and understand. Not only will it make it easier for all Americans to access care when they need it rather than when they can afford it. It will also reduce the cost. The administrative burden of the current system alone is estimated at 30% of the total healthcare burden in America.

Automation + Motivation

Learn what you should be doing now as automation changes the way people work and get rewarded.

Last week I read about a recent Bain & Company report estimating the automation of 40 million jobs [25-30% of US jobs] within the next decade. White color jobs are not immune from outsourcing or automation.

That’s eye opening but technology has made the world feel a lot smaller since the dot-com boom. When I first started my online training business in 2000, a healthcare CEO asked me where my colleagues were located. Everyone was scattered around the US. It seemed to make him feel uncomfortable, but even then high speed internet access enabled my development team to communicate and collaborate in real time.

The tools are better now but technology is also getting smarter. In 2009, I closed my online training business for two reasons:

1/ Much of the revenue cycle work and financial reporting in healthcare could be automated.

2/ The companies that needed a training program were more focused on extrinsic rewards.

Algorithmic Work:
Revenue Cycle work for the most part is algorithmic work or in other words, work that requires routine processing. At least 90% of revenue related transactions can be automated now if companies have invested in their systems. Old patient accounting systems that relied heavily on data entry as a source of information are now the problem because much of the information contained in them is dated and incorrect. There are better ways to obtain, use and store the patient data needed for transacting business.

Heuristic Work:
Automating revenue cycle transactions also changes the skillsets needed to manage the systems and do the remaining 10%. The work becomes less about routine processing and more about creative and analytical problem solving also referred to as heuristic work. Given the nature of the work, heuristic work typically cannot be outsourced or automated.

Motivation:
Many healthcare companies still rely on incentive based reward structures to motivate people to work. Productivity goals made sense when much of the work involved routine processing. Unfortunately, it doesn’t work the same way for people intrinsically motivated by the work itself. In fact, “if then” rewards are often counter productive because it turns something that people enjoy doing into the drudgery of work. Worse yet, decreases in intrinsic motivation can lead to destructive behaviors.

Goals may cause systematic problems for organizations due to narrowed focus, unethical behavior, increased risk taking, decreased cooperation and decreased intrinsic motivation. ~Drive by Daniel Pink

 

Referring back to #2 of my reasons, companies led by people who are driven by immediate extrinsic rewards underperform over the long term simply because they underinvest in training, systems, research and development. Same is true for publicly traded companies who provide the most earnings guidance to Wall Street analysts.

Drive
Drive by Daniel Pink is a book about Motivation that does a good job of connecting the dots of several leaders in modern behavioral research.

Extrinsic rewards are addictive particularly for type A personalities but at a certain point, they don’t make people happier. In fact, people driven by extrinsic rewards are more likely to feel anxious and depressed than intrinsically motivated people.

Three Ingredients of Motivation:

1/ Autonomy: According to Tony Hsieh, founder and CEO of Zappos and author of Delivering Happiness, perceived control is an important component of one’s happiness. When performance goals are tied to compensation it become more about the money and less about the work. Plus when performance metrics are varied they are harder to finagle.

2/ Mastery: Tony Robins recently posted on LinkedIn “All my past failure and frustration were actually laying the foundation for the understandings that have created the new level of living I now enjoy.” That’s mastery. It’s a lifelong period of effort to improve performance in a specific domain. According to Carol Dweck author of Mindset, the effort that it takes to master something meaningful [aka: pain] is what gives meaning to life.

3/ Purpose: The most deeply motivated people – not to mention those who are most productive and satisfied – hitch their desires to a cause larger than themselves.” There are some good examples in Drive of companies leading with purpose. One of which is Toms shoes and another good example not in the book is Patagonia.

For me, our online training program was about giving our students a career path to better job opportunities and a brighter future. That’s why I remained so passionate about it for so long.

So what do you need to do now:

1/ Figure out what type of work motivates you.

2/ Invest in your skillset rather than relying on your employer for training.

3/ Deliberately practice so that you improve.

4/ Identify your Why or in other words, your purpose.

About the Author: Shannon Smith is a healthcare strategist with over fifteen years of experience helping companies achieve greater success. She is also the founder and CEO of Hello Workout.

 

Learn the three Ds

Use the three Ds from the process of “Get Stuff Done” to make good decisions and be more successful at work and in life.

The three Ds are Discussion, Debate and Decision from the process of “Get Stuff Done” described in Radical Candor. I happen to be reading the book this week and used the three Ds as a framework for explaining my process for flushing out the problems, generating ideas and developing the right course of action from a project.

My application of the framework isn’t an exact textbook example. However, it has served as a good way to frame the complexity of the project and balance the complexity with the drive to get the project done.

Discussion:

According to the book, discussion is supposed to take place in 1:1 meetings. Meetings between managers and direct reports are supposed to provide a safe and constructive environment for discussing new ideas, challenges and other issues.

The discussion phase for me happens with a small group of subject matter expertise. It’s a low key discussion to flush out the details of the problem and constraints so that we can generate new ideas for how best to address the need. We basically spend the time thinking about what’s possible. Afterwards I send out a recap of our discussion and capture any additional thoughts on the matter. The recap ensures that we all left the discussion with the same understanding.

Debate:

Debates are bigger meetings to present the ideas so that others can raise their questions and concerns before a decision is reached. Keeping people in debate rather than decision mode is tricky when you have debaters and deciders in the room. Debate can be almost painful for those who already know what they want and/or want a quick decision. If you have ever felt like you got shut down too early during a debate meeting it’s a clear indication that you have debaters and deciders in the room.

The best thing you can do based on my own experience is to communicate your expectation for the meeting and what you want to get from it. If the ideas aren’t flowing, directly challenge the group on a specific problem or idea to spur further debate. The book has some techniques for making sure everyone is in the mind space for a debate meeting and for making it a fun process.

Decide:

People who have a strong grasp of the facts need to make the decisions. Those people are usually closest to the work. That’s why leading edge companies have a process for decision making and why many use the process for Getting Things Done. All of the meetings to discuss, clarify and debate the issues facilitate the decision making process.

The three Ds also help me respect the boundaries of my role as a consultant which is to help flush out the problem, generate ideas and facilitate the decision making process – and not make decisions no matter how tempting.

Application in life

You could apply the three Ds to other relationships as well. Think about the 1:1 meeting framework. When friends and family have problems, they often just want to someone to listen and to ask questions that help them clarify their issues and ideas. They don’t want to be told what to do and definitely don’t want to be judged.

Debate is necessary when decisions affect others. It gives everyone an opportunity to ask questions and raise their concerns so that they can be addressed before a decision is made. Debate often ends too early in the process and unfortunately, the relationships suffer. So keep the debate going until you can make a good decision.

About the Author: Shannon Smith is a healthcare strategist with over fifteen years of experience helping companies achieve greater success. She is also the founder and CEO of Hello Workout.

Single Payer System

A Single Payer System will help “Make America Great Again”.

I am convinced healthcare in American needs to become a single payer system with an option to purchase private insurance. Why?

Many American are still slipping through the cracks of the current system because it’s so fragmented. With health insurers pulling out of the exchanges and the uncertainty of CHIP, even more Americans are likely going to slip through the cracks in 2018.

While reading Option B this weekend, I learned that 46% of Americans cannot afford to pay $400 in the event of an emergency. It’s no wonder hospitals are seeing an increase in bad debt. The average deductible in 2016 was just shy of $1500. With more Americans trying to lower their premiums, it’s reasonable to expect deductibles will continue to increase. Higher deductibles and out-of-pocket maximums means many Americans are underinsured and exposed to excessive financial risk.

Illness is a factor in more than 40% of bankruptcies and there is evidence that people with cancer are more than 2.5 times as likely to file for bankruptcy. Even relatively small unexpected expenses can have disastrous consequences: 46% of Americans are unable to pay for an emergency bill of $400. ~Option B by Sheryl Sandberg and Adam Grant

People need a certain level of support to shift into growth mindset which is essential to return America to greatness. Healthcare is an essential part of that support. As Sheryl acknowledged in Option B, paid family leave, quality healthcare and mental health coverage make the difference between people falling off and hanging on. In other words, they are essential to life.

Many leaders are acknowledging now that capitalism is not working for the vast majority of Americans. The fundamental goals of business and the welfare of Americans are misaligned.

I fully agree that the capitalist system as we know it with regards to compensation is severely out of balance when you compare the growth of executive level compensation with that of labor….The U.S. Middle Class is shrinking compared to the base of 1962 and is now about 47% of the population from about 62%… These are the kinds of trends that lead to social and political upheaval. ~ Fortune, CEO Daily

What’s clear is that we’ve tried to make universal healthcare coverage work and we’ve allowed things to get so far off track that we need to do something dramatically different. It’s time for Option B in healthcare.

We should consider a single payer system as the base of the American system. Access to healthcare should not depend on where people live or who they work for because it’s an essential service for the health and welfare of all Americans.

A single payer system is going to be expensive but to “make America great again” we need to reinvest in all people rather than just lining the pockets of the 1%. Warren Buffet one of the wealthiest people in American is onboard.

 

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About the Author: Shannon Smith is a healthcare strategist with over fifteen years of experience helping companies achieve greater success. She is also the founder and CEO of Hello Workout.