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Healthcare Finance 3.0

Reimagining healthcare finance post Covid19.

I have been participating in some Zoom meetings to hear how others are reimagining healthcare post Covid19. There is broad consensus that use of Telehealth will not diminish because consumers are using it now. In fact, 80% of physician visits are now Telehealth visits.

Most are still questioning the longevity of current Telehealth reimbursement. When first conceived, Telehealth use was supposed to help reduce the cost of healthcare and with current reimbursement levels, it’s not achieving that objective. Convenience and limitations of the technology may be driving up cost.

When costs go up, everyone starts talking about the need for more value based care arrangements even though structural issues makes it hard for many healthcare organizations to make those arrangements work.

So the question that remains to be answered is how do we develop a more sustainable model?

Healthcare Consumerism vs. Accountable Care Organizations [ACO]

We have competing ideas at play in the healthcare industry.

On one hand, we want everyone to behave as healthcare consumers. That means we want every American to carefully select the healthcare services they need based on quality metrics and cost so that they get the best outcome possible.

On the other hand, we want to narrow their choices and limit their options so that we can control their spending and achieve defined outcomes of quality.

There are elements in both strategies that could work if we combined them in different manner.

Ideation

Ideation is not about having the perfect idea but rather generating fresh ideas to solve a problem. Asking questions helps to get the process started:

1/ Who should control the purse strings?

2/ Is the Healthcare Consumer capable of making informed decisions?

3/ Can we better empower the healthcare consumer?

4/ Is it possible to offer choice and control costs?

5/ Who should define a quality outcome?

Developing a Sustainable Model

If we answer the questions from different perspectives, new ideas and needs emerge. 

For instance, if we start from the healthcare consumer perspective:

1/ The consumer could control the purse strings even if they are not paying for the service out of pocket.

2/ The consumer could make informed choices if we laid out a healthcare roadmap for them.

3/ The consumer could be informed of all the options for events on their healthcare roadmap.

4/ The consumer could be better empowered to choose their physicians and control costs.

5/ The consumer knows how they want to feel and move post service and is in the best position to assess whether or not they got their expected outcome. 

The expected outcomes needs to be established with their physician. Atul Gwande MD talks about physicians understanding all the options but also understanding the limits of medical interventions so that healthcare consumers develop reasonable expectations.

Healthcare Roadmap

Based on the answers, we’re missing the healthcare roadmap that gives consumers actionable information based on their genetic profile and lifestyle. 

Various companies are collecting information on their current health status, pre-determinants of health, genetic and risk profile but so far there is no repository for the information.

Professional economists believe the government should maintain a single repository of this type of information so that it is safeguarded and continuously used to better understand the needs and cost of healthcare.

Coverage

As an industry, we usually talk about “medical necessity” as a way to define coverage even though there are always issues in defining necessity and limiting care. 

Most consumers don’t read all the fine print in their policy and likely don’t understand the concept of medical necessity. To empower the healthcare consumer, policies need to be easier for them to understand what’s covered and what’s not.

Different nomenclature such as uncontrollable event versus controllable event could help.

1/ Uncontrollable events are those predicted in their healthcare roadmap. 

Everyone has some sort of flaw whether genetic or lifestyle that leads to an increased cost. So financially shielding healthcare consumers from all uncontrollable events seems fair to all. Incentivizing healthcare consumers for sustained behavior change may help lower the cost of their roadmap and the total cost of care.

2/ Controllable events are the services healthcare consumers want and can plan for in advance of the event.

Thinking about events enables us to think more holistically about everything that might be needed and that could enhance the healthcare consumer experience. Controllable events could be either paid out of pocket or financed through a supplemental plan. 

Direct to Consumer

Other industries are reconfiguring to enable more direct to consumer sales. There is a role for it in healthcare as well to fulfill the miscellaneous needs of healthcare consumers. 

Direct to healthcare consumer platforms are providing the same level of service and transparency as direct to consumer services. Prices are coming down for over-the-counter drugs and medical supplies. 

The expenses could be paid either out-of-pocket or a pre-tax account [aka: HSA account].