Controversies in Health Ecosystem: When Value Meets Costs

Maggie Sandoval, Senior Manager of Institute for Innovation in Health, moderates the session on Health Ecosystem at 2nd Annual Health Business Association Conference on 1/30/2016. Here is the summary of the highlights of the controversies and insights I gathered from the session:



Health Wearable:

• Anthem partnered with Watson Health to disseminate information from Health Technology to determine if clinical recommendations follow guidelines (B. Kasravi)
• limitations: connect clinical data with guidelines but Watson needs to be monitored
• One speaker commented that our current problem is the overwhelming data inundating doctors from EHR. He feels that Artificial Intelligence (ie IBM Deep Blu, Google DeepMind) will eventually help provide assistance to make data to more actionable.
• Meeting needs of the patients is key. Concierage services are becoming more popular; health insurers are recognizing that patients are willing to pay beyond insurance to have access to MDs/healthcare providers after hours  and weekends (A. Klein)

• Physician habits dictate what they do even if data doesn't support it (Adam Klein, Valuation Services,  ECG Management Consultants)
• ie CRNA for anesthesia is cheaper but certain practice are less willing to use CRNA because "feel" that they are less superior than Anesthesiologists
• Maybe Human Center Design can address these deep rooted beliefs and provide solutions to improve productivity for practices and lower costs?

Financial Incentives

• How do you measure value? (Paul Darling, ZS Associates)
• Case scenario:
• Hepatitis C treatment ($90K) will cure Hep C and will prevent liver cancer and save >$90K 10-20 years later. The Time Horizons for the benefit is 10-20 years.
• The speakers propose that Time Horizon will be the single most important factor for determining value
• Capitation Model: current models adopted by Anthem gives a bundle for care; overall, capitation model lowers cost but does it increase value? We don't know.   (B. Kasravi)
• Value = Quality/Cost
• When MDs are reimbursed for volume (fee per service) versus salary, MDs are less willing to come in overnight). So how to incentive but get the most value?
• Alternative model is in pilot phase. This model is a mix of Capitation and Volume Model but the problem is that measuring value is not totally entirely clear. (B Kasravi)
• Value Based Reimbursement incentivises "Doing Less" (keep patients out of hospital, etc). In Mid-West, family medicine doctors have taken responsibility for reducing waste and as a result, MDs have benefited and get higher reimbursements ($800K /year) (Adam Klein). When MDs engage with payers to do less (keep patients out of hospitals), MDs and payers benefit. But, as we shift from Volume to Value based model, it's not quite clear what should we do (A. Klein)
• Comment on MDs taking risk to reduce waste (i.e. avoid hospitalization). But, it only takes one bad outcome for MDs to become conservative and take CYA (cover your ass) approach / defensive medicine. So, population management is key. But, there is too much variability (number of formularies, payers) to standardize. Hospital and pharmacy costs are the most expensive costs to payers (B Kasravi) 
• Drugs 14% of healthcare cost (branded Rx make up 7%). But if we try to eliminate the 7% of brand Rx, then we would get rid of a whole pharama industry and completely curtail innovation (Paul Darling).
• If we cured everyone with Hep C, it would cost us $250 billion (if these patients remain untreated, $4 trillion would be spent for treated complications from Hep C but this cost would be incurred for future generations). (Paul Darling)
• Cancer drugs: $200K for 2 wks of life. If it was personal choice, most would opt out. However, it's the family, not the patient, who often have to decide because patients are usually in end of life phase. So, adopting a culture for discussing end of life care with patients when they are healthy will provide tremendous cost savings  (Paul Darling)
• Volume mean more reimbursement but now Diagnostic tech companies are moving  from simple cheap test to molecular test (10x more expensive), but molecular tests cost 10x more so need to show the value! to justify the expense. (James Geraghty, Diagnostics)
• Genetics and molecular testing will tailor care, but what is the value when the added  expense is significant ? (B. Kasravi)

Last Words: What are you excited about?

• Great opportunities within current inefficient health system (James Geraghty)
• Pharma will be allocating 25% of investments to medical applications; initiatives to overcome issues that slow down current inefficiencies will thrive. (P Darling)
• Bring people together and that when ideas will be generated  to resolve the problems (B Ksravi)
• Technology will be key to improve our system (Adam Klein)
• One day we'll be able to incorporate existing functionalities (ie. making your own appt online). (Maggie Sandoval)