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5 Critical Priorities for the US Health Care System - Harvard Business Review

The pandemic has starkly revealed the many shortcomings of the U.S. health care system — as well as the changes that must be implemented to make care more affordable, improve access, and do a better job of keeping people healthy. In this article, the CEO...

Since early 2020, the dominating presence of the Covid-19 pandemic has redefined the future of health care in America. It has revealed five crucial priorities that together can make U.S. health care accessible, more affordable, and focused on keeping people healthy rather than simply treating them when they are sick.

Resistance to these priorities from some providers is inevitable given that the U.S. health care system has long focused on treating those who are ill. But the ramifications of Covid-19 are inescapable. Provider organizations reluctant to adapt imperil their own futures and those of their patients.

The five distinct priorities are interrelated and should be addressed in unison. Combined, they provide steps on a path that can lead to a much healthier America.

1. Focus on Improving Health

One of the most striking aspects of Covid-19 is that it often exploits underlying chronic conditions such as diabetes, heart disease, and obesity. With these chronic conditions already at epidemic levels in America, the U.S. population has been ripe to be ravaged by Covid-19.

Six in 10 Americans live with at least one chronic disease, according to the U.S. Centers for Disease Control and Prevention (CDC). Prior to the pandemic, chronic diseases were responsible for seven out of 10 deaths in the United States, killing more than 1.7 million Americans annually.

The Covid-19 pandemic has underscored the extraordinary danger that chronic diseases pose. The Surgo Foundation’s Covid-19 Community Vulnerability Index found, as PBS reported, that Arkansas, Louisiana, Mississippi, and Oklahoma had the highest vulnerability scores. All four rank among the seven least healthy states, according to the Boston University School of Public Health. Covid-19 would have been deadly even without the presence of chronic diseases, but their presence increased American’s vulnerability. Disease prevention must become a top national health care priority.

Prevention is, in part, behavioral and can be addressed by individual choices. All U.S. states and territories have a rate of adult obesity of more than 20%. In contrast, in Vermont, the healthiest state in the nation by a recent USA Today ranking, more than 90% of its residents report exercising on a regular basis, compared to 23.8% of Americans who say they don’t exercise. Cigarette use — a well-known risk for many chronic conditions — remains at 19% of adults or higher in 14 states.

But prevention must also be facilitated to a greater degree by health care providers. At Intermountain Healthcare we operate a program in some Utah clinics that involves physicians directly helping patients improve their overall health — for example, primary care doctors connecting a patient to mental health services or nurse diabetic educators or arranging for home health visits. This focus on preventive care means physicians have fewer patients to care for and allows them to spend more time with high-risk patients, allowing them to get upstream of potential health problems. Patients in the program have seen a 20% improvement in controlling high blood pressure, diabetes, osteoporosis, colorectal cancer, and other health problems. Better health has, in turn, reduced costs by $648 per patient each year ($1,908 a year for patients 65 and older) compared to standard clinics.

2. Tackle Racial Disparities

The Covid-19 pandemic has starkly illuminated the profound racial disparities in health care, and these must be rapidly addressed to achieve health equity.

In an analysis published in JAMA, the Covid-19 hospitalization rates and death rates per 10,000, respectively, were 24.6 and 5.6 for Black patients, 30.4 and 5.6 for Hispanic patients, 15.9 and 4.3 for Asian patients, and 7.4 and 2.3 for white patients. Sadly, these types of stark disparities are not new or unique to Covid-19.

Key to tackling these disparities is addressing the social determinants of health. These include, as the CDC states, five key topic areas: 1) neighborhood and physical environment (affordable and quality housing, access to reliable transportation, and access to nutritious, affordable food); 2) health and health care (lack of access to quality health care, health insurance, and/or linguistically and culturally responsive health care); 3) occupation and job conditions (the disadvantaged tend to work in jobs that can have more health risks); 4) income and wealth (financial challenges that make it difficult to pay medical bills and access affordable quality housing and nutritious food); and 5) education (inequities in access to high-quality education, which can limit job and career options).

At Intermountain Healthcare, we are working with and providing funding to multiple Nevada and Utah nonprofit agencies to address these issues. We are contributing $12 million and staffing to a three-year pilot project in Utah to address the social factors that influence health in low-income zip codes. Now nearing the end of its third year, the pilot has contributed to a 12.7% reduction in emergency room (ER) visits among patients involved with the project. The pilot has been so successful that the Utah legislature is going to take the model statewide.

We at Intermountain believe that health care systems should be judged on how they treat the historically underserved. Using data to understand where disparities exist and then make interventions, we have added equity as a core value of our system. We hold ourselves accountable by establishing key performance indicators and continually assessing our progress. What’s clear is that we still have work to do, as does the entire health care industry.

3. Expand Telehealth and In-Home Hospital Services

In health care, we’ve long asked people to come to us for help. We need to change that thinking entirely and become more consumer-centric. We need to care for people closer to their home. To do that, we need to meet people where they are as much as possible when delivering care.

Perhaps the most striking change in the delivery of health care that Covid-19 has generated is the rapid acceptance of telehealth by both consumers and providers. Nearly half (43.5%) of Medicare primary care visits were provided via telehealth in April 2020, according to the federal government, compared with less than 1% in February 2020 (0.1%).

At Intermountain, our use of telehealth visits ballooned from 7,000 in March 2020 to a current average of more than 73,000 a month across our 25 hospitals, 225 clinics, and multiple partner hospitals.

The implications of telehealth are profound. It can increase access to care and can be especially transformational for the economics of rural hospitals and remote communities. One-hundred twenty rural hospitals in America had closed in the decade before the pandemic struck, and 25% of the survivors were at high risk of closing. Covid-19 has only increased the risk.

That is where telehealth changes the equation. Telehealth not only makes specialists — like neonatologists, neurologists, and cardiologists — available to rural hospitals; it also enables patients to receive that care without being transferred to larger, more distant facilities. They can remain in their communities, surrounded by their support systems, with the local hospital retaining most of the compensation. That strengthens not only rural hospitals but also rural communities where the hospitals are often the largest employers.

Hospital-level care at home should be available to treat acute and chronic clinical conditions, but only about 116 “Hospital at Home” programs were offered nationwide in spring 2021. Initial national studies estimate hospital-level care at home is 19% less expensive than conventional hospital care and has equal or better outcomes.

4. Build Integrated Systems

Another important confirmation from the pandemic is that integrated health care delivery systems — those that offer their own health insurance plan or do so via a partnership with an external insurer — are better suited to adapt and align incentives to rapidly changing circumstances. A PwC Health Research Institute study in December 2020 confirmed that systems with their own health plan were better able to weather the pandemic’s financial blow.

The American Hospital Association projects that the nation’s hospitals could face a loss of $54 billion in net income during 2021 due to the pandemic. To make up that loss, non-integrated systems will, in many instances, have to cut services, raise prices, or postpone adding needed community services.

Integrated systems can “balance the load” by transferring patients between facilities, across space, and among caregivers — and, perhaps most importantly, between care providers and insurers. They can quickly share learnings and best practices. They are likely also to prove to be best suited to care for Covid-19 long-haulers. In addition, when vaccines became available, Intermountain Healthcare, as an integrated system, was able to use its IT systems to rapidly identify qualifying high-risk patients and urge them to get their vaccinations.

Whether a health system offers an insurance plan on its own or via a partnership with an external insurer, the integrated model allows the cost of providing care and the cost of insuring care to be aligned in ways that benefit the insurer and the provider. That’s because both share the benefits when health care costs are reduced; when the health care system and insurance plan are separate, reductions in ways of delivering care accrue to the insurer or payers (e.g., employers) not the health system.

We know this from our own experience. Intermountain Healthcare has an in-house nonprofit health insurance company, SelectHealth, which serves nearly one million members in Utah, Idaho, and Nevada. It also collaborates with other health care providers — for instance, it has a partnership with the Idaho-based St. Luke’s Health System. In each of these configurations, the goal is to provide great care and better align and integrate the cost of care and the cost of insurance.

5. Adopt Value-Based Care

The widespread acceptance of value-based care — under which providers, including hospitals and physicians, are paid on the basis of capitation and patient health outcomes — would accelerate the adoption of the above priorities. In contrast, traditional fee-for-service care does not address prevention or equity. It has resisted telehealth. It does not take full advantage of integrated health care systems.

Value-based care improves quality of life and corrects misaligned incentives (e.g., paying providers on the basis of the volume of procedures they perform rather than outcomes). It can reduce health care costs by making care more accessible and keeping people healthy, which reduces the treatments and procedures needed. (For example, over each of the past three years SelectHealth’s focus on value-based care enabled it to reduce its rates by 2% to 3% for those insured through the federal exchange.)

But for the reason I’ve explained, value-based care also can undermine the financial health of hospitals unless they are part of an integrated system. The flawed fee-for-service system was designed to wait until individuals got sick and then treat them, and not to support the goal of staying healthy. That flaw was highlighted by the pandemic.

“The pandemic opened the eyes of a lot of providers that make their money through volume,” said Ceci Connolly, president and CEO of the Alliance of Community Health Plans. “Suddenly they had no volume and no revenue. Providers with value-based arrangements with health plans kept getting a check every month, regardless of the volume. They were able to focus immediately on telehealth and other creative ways of caring for patients, because they weren’t as worried about volume or reimbursement.”

Value-based care enables providers and insurers to design and implement all kinds of interesting innovations that volume-based systems are not able to do. Intermountain Healthcare, for instance, is partnering with the University of Utah Medical School to jointly develop a new medical educational program — the first of its kind in the United States — to train the next generation of physicians in population health, which focuses on keeping people and communities healthy. Intermountain is investing $50 million in the initiative, which will help prepare physicians to consider not only a person’s immediate medical needs but also the social determinants of health.

Accelerating the move to value-based care right requires significant investment, commitment, flexibility across organizations, and, for some, a leap of faith away from tradition. Here’s what Intermountain Healthcare has found to be successful:

Align and reorganize provider panels. There must be enough patients covered by value-based contracts (i.e., capitation) in a provider’s panel to make the changes worth the effort and also financially viable and clinically robust. The types of patients assigned to a provider need to be a mix of both relatively healthy people and those with chronic conditions that need more extensive and intensive attention.

Restructure teams and workflows. After panels have been aligned, teams supporting physicians need to be restructured and properly resourced to succeed in this different model of care. Core workflows and processes must be adjusted and adopted. Teams should be brought together in daily huddles to coordinate patient outreach, close care gaps, and organize care for the changing needs of the patient.

Educate providers and teams. It takes a village to succeed in value. Ensure that everyone is equipped to participate in this team effort by educating them about the core tenants of value-based care, no matter how big or small of a role they will play.

Deploy novel technologies. Use tools to integrate multiple data sets and overlay advanced algorithms to harness and unlock the power of this data. This data can be used to alert clinicians to emerging patient health conditions.

Use real-time insights. Real-time, actionable insights need to be incorporated into teams’ daily workflows. Predictive analytics enable providers to focus on who should be on their appointment schedule — and pivot toward preventive, holistic care rather than episodic treatment.

Align financial incentives. The incentives should be focused on keeping people healthy and not just doing things that generate revenue.

Without a faster shift to value-based care, the cost of health care in the United States will continue to rise. That is not sustainable for both provider institutions and patients. For many Americans, health care is already unaffordable and difficult to access. Those problem will only worsen if costs are not brought under control.

The pandemic has made the path that U.S. health care must take crystal clear. The question is whether provider organizations and private and public insurers not already on this path understand that it is the only way to realize a system that delivers better care — care that does a better job of keeping patients healthy — and is financially sound.