Making Sense of a Quickly Changing Healthcare Scene


 
Bill Breen

If you have sensed an acceleration of change in the healthcare landscape, you would be correct. The evidence has been many recent events in Memphis and over the last two weeks perhaps none greater than the COVID-19 challenges, responses and new realities. How should it all be viewed? As a pessimist you might say, "well I was waiting for such a moment to explode the myth that we were prepared for large scale infectious disease.' As an optimist you might point to the breakneck speed innovation and retooling of people, plant and equipment under the fire of a pandemic. Perhaps a realist might agree with both points of view.

Regardless of the place on the spectrum we fall, I would suggest the most important future lens by which to measure the macro and micro strategies in healthcare is value. Value for the patient is often described as achieving BOTH lower costs and better outcomes. Yes, perhaps you may continue to buy or build bricks and mortar facilities, distribution channels, service lines and the like. A marketplace rewarding value will not wipe out entire categories of healthcare overnight or at all. But what it will do is tilt the playing field. When you read of purchases, divestiture, layoffs, closures, strategy changes and the like, ask yourself what role value plays in these developments.

If I had a dollar to divide up in investment in healthcare, I would lean heavily toward value as a deciding factor of where to put my money. The government has signaled a strong effort to reward value. Because of COVID - 19 we are seeing obstacles to digital health (examples are telemedicine and remote monitoring) vanish and the beginning of a decreased reliance on bricks and mortar, whether it be the Primary Care office space or an Emergency Room. Any entity that is both highly leveraged or ultimately reliant on today's access points and relatively inefficient care models will face pressure to conform. To be successful, future business models must ask the question, 'Does this replace something more expensive? Does this provide greater access? Does this empower the patient?'

Over the last few years, I sensed a great deal of cans being kicked down the road on this subject. It might take the form of a hospital saying, 'well I agree, but until the incentives change and I'm not rewarded by volume, I'm going to keep working to acquire volume. It might sound like a doctor saying, 'well, I agree, I need to change but I'm retiring in a few years, I won't have to deal with much of that.' The status quo and the familiar environment can prove to be a powerful incentive to stay put. But through the value lens you can understand key strategic decisions. Like why a large specialty group would basically take control their part of the premium dollar. They must be accountable and be able to control input costs like facility expenses and implantable hardware. Through the value lens you can better understand why a GI group would have endoscopy centers and take ownership over expenses related to their specialty. These moves may create margin, true, but if they replace a more expensive service, they are driving value. In many healthcare circles we have long thought that to be fair we had to be unfair. Deny such changes or drag it out to protect the greater good. Regardless, I believe the scales are falling off our eyes and we are going to see value more clearly.

One of the most noticeable environments where you can expect change is primary care. I believe we are going to witness a resurgence in the value and accountability of the primary care physician and practice. No provider can benefit more from a move to value than primary care. The convergence of an aging population, Medicare Advantage growth and value-based reimbursement models are driving a change in how we view the primary care practice and evaluate future opportunities for improvement. Payers are increasingly eyeing primary care as a true partner to gain elusive performance on cost and quality. Note the recent introduction of organizations like Chen Med and Oak Street Health. These are value-based primary care organizations. In some ways they are a glimpse into the future. Every health care provider and ancillary vendor needs to revisit their strategy and build in value-based change. And when it seems crazy out there, and it is sometimes, remember to view it all through the value lens. You can count on value for the patient to be a viable true north for strategy.


William R. (Bill) Breen, Jr., DSc, is Market President for the Mid-South for Prime East, LLC. Prior to joining Prime East, Breen was Senior Vice-President of Physician Alignment at Methodist Le Bonheur Healthcare (MLH) from 2010 to 2018. Prior to LBH, Breen was CEO of Health Choice from 1997 to 2010.

Prime is a division of Premier, a Dallas-based Prime East and Premier focus on building physician-owned, physician-led and patient-focused healthcare organizations. Contact wrb1767@uab.edu.

 
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