Healthcare is undergoing a revolution

The healthcare industry is undergoing change at unprecedented speed and magnitude, yet continues to be fraught with cost inefficiencies and disappointing clinical outcomes. The numbers are staggering. The US spends more on healthcare than any other country in the world, approximately 17.7% of GDP in 2013. Yet it is estimated to lose $750 billion a year from unnecessary services, inefficient care delivery, excessive administrative costs, inflated prices, prevention failures and fraud.

What lessons can the US learn from health systems, governments, thought leaders and innovators from other parts of the world? How can we apply these practices to drive improvement in the public and private sectors, from traditional payers and providers to coordinated care organizations (CCOs), patient-centered medical homes (PCMHs) and state and federal programs?

Let’s look at these dynamics from the standpoint of the key actors in the healthcare system:

1. Payers seek to improve the member experience
2. Patients demand access to data
3. Providers are increasingly challenged to manage both clinical and administrative costs

Payers seek to improve the member experience

As a result of legislative and regulatory changes, and shifting market dynamics, health plan members today have much greater choice regarding health plans, providers, benefits and treatment options. This is particularly important given the rapid rise in member cost sharing. Healthcare deductibles for employer-sponsored health plans for example have surged 67% since 2010.

Patients demand access to data

Patient-centricity is fueling the revolution in healthcare delivery. While patient-centricity has become a bit of a buzzword in the US, it does reflect a fundamental change in how healthcare actors think about delivering care and achieving outcomes that are in the patient’s best interest. Patients are increasingly taking greater responsibility for their own care, using social media and other Internet-based tools to guide their healthcare purchasing decisions. Faced with increased cost-sharing, patients are becoming increasingly price-sensitive, and are demanding greater transparency. Payers that are unable to enable member and provider decision-making will find themselves losing out to the competition.

Providers are increasingly challenged to manage both clinical and administrative costs

As a result of the Affordable Care Act (ACA), numerous regulatory changes and initiatives are underway to move providers toward risk-based reimbursement and value-based care. Payers and providers are incented to meet preventive care standards including prospective assessments, screenings, tests and education, to more closely manage chronic conditions and complex cases, and to demonstrate clinical outcomes. At the same time, providers struggle to control both administrative and clinical costs while providing this care. To achieve this, greater coordination is required between patients, caregivers, physicians, ancillary providers, payers and care managers. Access to real-time health data, including electronic health records and lifestyle monitoring, as well as point-of-care guidelines, eligibility checks, authorization and invoicing will result in better provider/patient collaboration, improved outcomes and lower costs of care and administration.

New technologies help overcome the major challenges facing healthcare

Given the complexity and magnitude of the challenges healthcare providers face today, innovative technology strategies, models and tools are needed.

We see 5 main areas where healthcare efficiency and effectiveness can and must be improved, and argue that adopting new models for applying technology to these challenges, drawn from other systems and countries, and in particular SaaS-based tools, can have a significant impact:

• Enable system-wide transparency. The first step is creating visibility into payment and care data. The most effective way to achieve this is via the implementation of real-time, point-of-care SaaS-based technologies.
• Continue to reduce administrative overhead. Administrative spending accounts for approximately 9% of US healthcare costs. However there is significant potential to further reduce waste by streamlining and even eliminating complex multi-stakeholder processes.
• Bring stakeholders together. Collaboration and coordination between the key actors in the US healthcare ecosystem can be greatly enhanced with new technologies that align disparate systems, processes, and technologies.
• Improve clinical outcomes. Improving data capture, analysis and its clinical application represents the first step in improving health outcomes. Making available digitized medical records, patient monitoring data, fee schedules, benefits, claims history and business rules in real time, to all stakeholders, ensures the most appropriate care decisions.

Reduce inappropriate and unnecessary care. Not only can unnecessary treatments harm patients, but they are also a major component of medical waste in the US. Estimates for unnecessary care range from 10- 30% of healthcare spending. We argue that new, proven models exist for effectively applying technology to this issue. These models can be implemented for a fraction of the cost and time required to perpetuate existing technologies, workflows and infrastructure.

Graphic Driving efficiencies in US healthcare while improving patient experiences

Conclusion: Technology is at the heart of the healthcare revolution

This paper has focused on the potential of new technologies to drive efficiencies in the US healthcare sector, while enabling patients to receive better and more appropriate care. Technology has the potential to drive the shift to more value-based care. It provides the tools that providers, payers and patients require to work closer together and create better outcomes.