Healthcare Transformation: What's good about U.S. Healthcare? (Webinar)


Healthcare: The Way It Should Be The New Era of Opportunity (Transcript)

[Dr. John Haughom]
Thank you very much, Tyler. I am absolutely thrilled to be with all of you today. I am giving you a little bit of feedback. So if anybody out there is not muted, it would be appreciated if you would do that. As I’m sure you know, healthcare is entering an era of massive change. Major transformation began over the last few years and the pace of change is definitely picking up. There are signs of this change everywhere we look. The quality and safety movements are real and they are accelerating, the need to control the cost of care is substantial and unavoidable. Exciting new possibilities for delivering better care are becoming apparent. These changes will be powerful and profound and they will be far reaching it.

Everyone involved in healthcare will feel the impact of these dynamic advances over the next few years. However, in order to really understand how we got to this point, it is important to understand where we’ve been. How did we get to our present state? That will be the focus of today’s presentation.

Over the past decade, much has been written about the problems with healthcare in the United States. While the need to improve quality and decrease cost is certainly very real, it is also important to not forget what is good about our healthcare system. The purpose of this presentation is to provide an overview of the historical, cultural, financial, and social forces that have defined and shaped the existing healthcare system at the dynamics that are irreversibly driving the need for change. This will set the stage for later presentations that will review the emerging concepts and methods that will allow clinicians and healthcare organizations to adapt to a rapidly changing future.

Healthcare: The Way It Should Be

As I mentioned in my initial overview presentation a couple of months ago, I am in the process of writing a book on healthcare transformation. The book will be freely available to anyone who is interested in reading it. The goal of the book is to provide an overview of the current and future state of healthcare transformation and to provide clinicians and healthcare organizations the knowledge they need to be successful over the turbulent decade ahead.

As indicated on this slide, the book will have three sections. Section one will focus on the forces driving transformation, both the influences that have defined our current system and the present and future challenges facing the industry.

Section two will focus on the concepts and tools clinicians and healthcare organizations need to understand and implement in order to successfully ride the wave of transformation.

Section three will look into the future. It will describe what successful looked like for clinicians and healthcare organizations that successfully utilized the tools and concepts presented in section two of my book. The future of analytics and other important healthcare technologies will also be discussed in section three.

Initially, the plan was to have the book completed and available this month. In fact, the writing for the book is largely complete. However, the process of editing and production is taking a little longer than we anticipated. At this point, we are anticipating that the next version of the book will be complete and available in late April or May. However, the full production version of section one is complete, and as Tyler had said, it is available to anyone listening to today’s presentation.

Poll Questions

Before we start, I’d like to post a couple of poll questions in an effort to better understand the audience. Please take a moment to respond to these two questions.

First question is how are you involved in healthcare? Are you part of an integrated delivery system, a hospital, a physician group, are you a consultant, or do you have some other organizational role?

The second question is what is your role? Are you a clinician? Are you part of management? Are you involved in quality improvement? Are you involved in IT?

[Dr. John Haughom]
Okay. Thank you, Tyler. As I look at the results, it looks like integrated delivery systems and physician groups are roughly about 42 to 44 percent, 27 percent consultants and 30 percent other. It’s kind of what we had for the first webinar last October.

[Tyler Morgan]
Alright. Let me go ahead and put that second poll up.

[Dr. John Haughom]
And in terms of how folks are involved – or excuse me – in terms of what their role is, now it looks it’s settling out at around 8 percent clinicians, 41 or 42 percent management, 15 percent quality improvement, 23 percent IT, and 60 percent other. Again, this is fairly reflective of the poll we took in October. I guess my only comment would be it would be nice if we could get more clinicians involved in this because as I pointed out in this presentation, they ultimately are the answer to the challenges we face in healthcare.

Some Pertinent History

To start, let’s review some pertinent history. For the first 6,000 years of recorded human history, if you were ill or injured and saw a physician, your chances of survival actually went down. When hospitals appeared on the scene in the early 18th century, they were where people went to die. Actually, hospitals were where the poor went to die. The wealthy could afford to hire a doctor to take care of them at home and they generally died in their home.

I would call your attention to the picture on this slide. Just on a stone is the Code of Hammurabi. The Code of Hammurabi is a well-preserved Babylonian code of ancient Iraq that dates back to about 1772 B.C. It is one of the oldest deciphered writings of significant length in the world. As you can see in the lower right hand of the slide, Law 215 out of 280 Laws had to do with healthcare. Pay for healthcare services at that time were pretty modest, ten shekels for surgery, which in today’s terms is about $2.60. And peer review was far tougher than it is today. If a surgeon made a mistake, they’re hands were promptly cut short since it’s pretty hard to perform surgery without hands.

Leadership is a Verb or Process, Not a Noun…

While healthcare did not offer much benefit for the first 6,000 years of human history, things profoundly changed starting in about 1860. Between 1860 and about 1950, a handful of visionary clinical leaders profoundly changed the course of healthcare history. These leaders included Sir William Osler, William Halsted, Howard Kelly, Florence Nightingale, William Welch, Harvey Cushing, and a number of others. These were leaders not just in name but in action. It is possible to credit the impact of these visionary of leaders to a handful of important advances they instituted.

During this period, new high standards for clinical education were created, including four-year medical schools with two years of book study and two years of hospital ward experience. Strict requirements for professional licensing were established, clinical practice began to be founded on scientific research, a new internal organization for hospitals was identified, new more modern nurse practices were created, more modern hygiene techniques were implemented, and new public health policies and treatments were put in to operation. These advances set the stage for some amazing progress. While we have significantly improved on the work of these amazing clinical leaders, the fact is that much of healthcare today still reflects the work that they did.

1912: The ‘Great Divide’

Harvard medical professor Lawrence Henderson recognized this change in the trajectory of healthcare when he wrote of healthcare’s ‘Great Divide’ in 1912. Dr. Henderson wrote, “…for the first time in human history, a random patient with a random disease consulting a doctor chosen at random stands a better than 50/50 chance of benefiting from the encounter.” Just that time, we in the medical profession have arrived at a point where we routinely achieve miracles. Over the past 100 years and for the first time in 6,000 years, healthcare actually mattered to patients.

Current Health Care…

Over the past century, we’ve progressed to what is easily the best healthcare system the world has ever seen. This slide illustrates a few of many significant advances. From 1900 to 2010, average life expectancy at birth increased from only 49 years to almost 80 years. Since 1960, age-adjusted mortality from heart disease (the #1 cause of death) has decreased by 56 percent. Since 1950, age-adjusted mortality from stroke has decreased by 70 percent. I could provide countless other examples but these few examples make the point. Humanity most definitely has benefited from the advances in healthcare over the past 100 years.

The next slide helps make this point…

Advancing Life Expectancy

It is illuminating to look at the change in life expectancy in the U.S.since 1900. The graph illustrated on this slide shows that a child born in 1900 had a life expectancy of just shy of 50 years. For a child born 110 years later, the life expectancy is almost 80 years, an increase of over 29 years. That’s almost three decades longer. This is an amazing accomplishment, and frankly something unseen in the prior 6,000 years of recorded human history, a period during which life expectancy remained relatively flat. A lot of this increase can be attributed to improvements in public health. That’s why the first half of the 20th century illustrated in this graph between 1900 and 1950 could be called the public health era. Because of public health advances, there was a gain of about 3-1/2 years of life expectancy with each passing decade. The increase was largely due to avoiding epidemics of infectious diseases like cholera, typhus and smallpox.

Then, sometime between about 1950 and 1960, two things happened. First, we largely exhausted, though not completely, public health as a major source of increase in life expectancy in the United States. Secondly, for the first time, we began to document changes and life expectancy in the population as a whole from treatment provided by clinicians and hospitals and clinics.

You’ll notice that the curve on the graph flattens out a bit in the 1950s. Since then, there has been a gain of about 1.3 years of life expectancy per decade. Though less than the public health increase, against the sweep of human history these gains driven by clinical care improvements are truly phenomenal. We stand on the foundation of 100 years of science that have massively improved our understanding of this human organism in health and diseases, and given the U.S. thousands of ways to improve the well-being and life expectancy of patients. Only in the last 60 years had clinicians been able to show the clinical care can make a significant difference. Please note, this is in the lifetime of many people involved in healthcare today. During our professional careers, we have been able to do more than just predict whether a patient will live or die. We can actually change the outcome of the illness and injury. We are the first generation of clinicians that can make that claim. That’s something that I’m proud and excited to be part of and I expect many of you are as well.

Some Important Points

All this leads to an important point that I alluded to in my first presentation. Before we talk about why changes are inevitable and important in healthcare, it is important that we recognize what we’ve achieved. Despite all of the challenges facing healthcare today, there is also a lot of good about our current healthcare delivery system.

Most American hospitals and caregivers provide safe and effective care for the vast majority of patients, the vast majority of the time. The vast majority of caregivers are well trained and conscientious. And Western medicine’s ability to save and extend life and to improve the quality of life for the ill and injured is nothing short of miraculous. We have come a long way and we have a lot to be proud of.

Does This History Matter?

All of this history is important because it should influence how we think about the present and the future. No doubt we face many challenges in healthcare today. As healthcare increasingly contributes to the national debate, it’s important that we debate in the context of the phenomenal progress that we’ve made in the past and the progress we’re capable of making in the future. I am very confident that at least 95 percent of our peer physicians get up every day seeking to be the best they could be for the patients they serve. The same is true for nurses and all other care providers. They hold the professional expertise in a deep-seated passion for quality that can be tapped as we seek to address the challenges facing the healthcare industry and to transform our healthcare system. Therein lies the key to addressing the quality, safety, access, waste, and cost challenges facing the industry. We need to build off of the phenomenal success of the past and tap the energy, expertise and commitment of care providers across the nation and around the world. The day that that happens will be the day that the issues currently faced in healthcare will be solved.

The Great Equation

In 1977, Aaron Wildavsky, an American political scientist known for his work on public policy, published a book entitled ‘Doing Better and Feeling Worse: The Political Pathology of Health Policy’. In the book, Wildavsky argued that the traditional belief that medical care equals health, the “great equation,” is simply not true. In fact, most of the bad things that happen to people are at present beyond the reach of medicine. Wildavsky effectively argued that more available medical care does not necessarily equal better health. The reality of this is illustrated in the next slide.

Determinants of How Well We Live

One of the most cited statistics in public health is the imbalance of social investments in medical care compared with prevention activities. Approximately 95 percent of the trillions of dollars we spend as a nation on health goes to direct medical care services; while just 5 percent is allocated to the population-wide approaches to health improvement. However, as this slide shows, some 40 percent of deaths are cost by behavior patterns that could be modified by preventative interventions. Genetics, social circumstances, and environmental exposure also contribute substantially to preventable illness. It appears, in fact, that a much smaller proportion of preventable mortality in the United States, perhaps 10 to 15 percent, could be avoided by better availability or higher quality of medical care. Thus, one could reasonably question a funding scheme that places so much emphasis on medical care and not enough on prevention.

The fact that medical care historically has had limited impact on the health of populations has been known for many years. The data clearly indicates that we could achieve a much greater impact on total health by going after behaviors and by delivering care. To put this in perspective, a study published in the British Medical Journal a few years ago tracked approximately 35,000 people over about 20 years. The study looked at four behaviors related to health factors – tobacco use, alcohol use, diet and exercise. The study demonstrated that people who did well on all four compared to people who did poorly on all four accounted for a 14-year difference in life expectancy. Now, compare this to all of healthcare delivery which accounts to approximately 3-1/2 to 7 years of additional life expectancy.

Doctors have little or no control over the 90 percent of factors that determine health, from individual health lifestyles such as smoking, exercise and stress, to social conditions like income eating habits and physiologic inheritance, to physical environment including air quality and water quality. In short, most of the bad things that happened to people at the dawn of the 21st century are at present beyond the reach of medicine.

How This Impacts the Policy Debate

So how does this impact the healthcare policy debate? Everyone knows that doctors and nurses do help patients. We can mend broken bones, cure most infections, and successfully operate on diseased organs. Inoculations, infections, and organ repairs are very good reasons for having doctors, drugs, and hospitals available. More of the same, however, is likely to be counterproductive. Nobody needs unnecessary operations. Excessive use of drugs can create dependencies or adverse reactions resulting in patient harm. More money for clinical care alone cannot advance health. In the absence of medical knowledge gained through new research or of administrative and clinical knowledge to advance common practice in the best practice, current medicine has gone about as far as it can. Clinical care is not likely to reduce substantially more, if more money is applied. And one could argue that we should be advancing anyway, especially with the extensive expenditures that the U.S. already supplies to clinical care and the well-defined levels of wasted resources that could be applied in advancing clinical care.

U.S. Healthcare Spending

Spending on health is not necessarily bad. Would we rather spend our disposal income on a new car, a more powerful personal computer, or a TV instead? Some would, others wouldn’t. As still illustrated in this graph, the real problem is that health spending as percent of disposable income in the United States is growing much faster than disposable income itself is growing. Furthermore, this growth in health spending is impacting other important categories of spending, like education and socially beneficial programs. The argument is not that clinical care is bad, only that it’s not good for everything. The marginal value of spending an additional dollar or an additional $1 billion of medical care is likely to be close to zero in terms of improving overall health and life expectancy. Policymakers believe (probably correctly) that we are spending enough on healthcare delivery at this point in time.

U.S. Healthcare Spending – U.S. Healthcare Expenditures

As this slide demonstrates, spending on healthcare in the United States has been growing precipitously for over three decades and at near $2.6 trillion in 2010. That’s over 10 times the $256 billion that was spent in 1980. The rate of growth in recent years has slowed relative to the rate of growth in the late 1990s and early 2000s, but it is still expected to grow faster the national income over the foreseeable future.

Healthcare an Expected Benefit?

Healthcare spending is the biggest financial issue facing the nation. Addressing this growing burden will continue to be a major policy priority at both the national and state level and in both the public and private sector. In the private sector, employer-based coverage for healthcare began following World War II. It has been a mainstay employee benefit for many decades. However, since 2002, employer response with health coverage for family premiums have increased by an astounding 97 percent, placing an increasing cost burden on employers and on workers. An increasing number of U.S. businesses are less competitive globally because of ballooning healthcare costs. Furthermore, United States has been in a recession for much of the past decade, resulting in higher unemployment and lower income for many Americans.

U.S. economic growths have heightened the burden of healthcare costs for both individuals and business. These conditions have put even more attention on health spending and affordability. This raises the question whether health insurance will remain a benefit for everyone.

Health Insurance as an Employee Benefit…Will It Continue?

Will health insurance remain a benefit? For many Americans the answer is probably no. As a result of powerful financial trends, employers are steadily reducing health insurance coverage or eliminating it altogether.

An example of this is IBM’s recently announced plans to move about 110,000 retirees off its company-sponsored health plan and instead giving them a single fixed payment to buy a coverage on a health insurance exchange. This is a clear sign that even big, well-capitalized employers like IBM aren’t likely to keep providing the once common health benefits as medical costs continue to rise. The move, which will affect all IBM retirees once they become eligible for Medicare, will relieve the technology company of the responsibility of managing retirement healthcare benefits. In announcing the decision, IBM said the growing cost of care makes its current plan simply unsustainable without huge premium increases. Since the IBM announcement, other large companies have announced similar plans for their retiree health benefits. IBM shift is an indication of health insurance marketplaces, similar to the public exchanges proposed under the affordable care act, will play a bigger role as companies move coverage down the path taken by many pensions, paying employees and retirees a fixed sum to manage their own care. If this is true of companies like IBM, it will be more true of smaller companies. In the future, increasing premiums and growing marketplace competition will likely lead to more employers reducing or dropping coverage altogether.

Data from a study published by the Kaiser Family Foundation last December demonstrated that less than 51 percent of employers now offer health insurance as a benefit. That is illustrative of a huge drop over the last few years. In the public sector, Medicare covers the elderly and people with disabilities and Medicaid provides coverage to low income families. These programs fell into place in the 1960s and beyond. Enrollment has grown in Medicare with the aging of the baby boomers. And in Medicaid, due to the recession, the affordable care act is further as well in the ranks of Medicaid participants. This means that total government spending on healthcare has increased considerably. Escalating healthcare costs are straining federal and state budgets, hindering the nation’s ability to pay for important initiatives needed to address other significant national issues.

U.S. Healthcare Spending
Healthcare Spending as % GDP

As this slide shows, the United States spends far more on healthcare as a percent of gross domestic product than any other country in the world. Escalating healthcare costs are hindering the nation’s ability to pay for important initiatives needed to address other significant issues. In 2010, health spending in total accounted for 18 percent of gross domestic product and has been rising since.

U.S. Healthcare Spending
U.S. Spends two-and-a-half times the OECD average

And as this graph shows, the total U.S. expenditures per capita in both the public and private sector is far greater than any other nation in the world. The United States is represented by the bar on the far left. The center red bar indicates the average of OECD countries who submitted data. Clearly, the U.S. is far out spending every nation in the world.

The Reality

A thoughtful analysis of this spending data brings a harsh reality to life. It is abundantly clear that change is inevitable. As a society, we are spending more in clinical care than we can afford and we have promised more than we can deliver. In a 2006 study by David Walker, of United States, it was demonstrated that the unfunded liabilities in U.S. totaled about $47 trillion. I reviewed this study with you during my first presentation. Two-thirds of these unfunded liabilities, about $30 trillion, were as a result of Medicare. At the time of the study, the total net worth of the United States was roughly the same. We have promised an amount equal to our total net worth. Clearly, this is not financially prudent nor is it sustainable. Something has to change. Some president and some congress in the not too distant future will have to face these realities. These healthcare spending trends are simple unsustainable, and in the future, they will make change inevitable as private payers, public payers and consumers demand the elimination of waste and better utilization of resources and delivery in high quality and safe care using new, more efficient techniques and care delivery models. While there has been a return on this societal investment in medical care, it has not been as great as the country needs or as the country deserves.

A Twofold Solution

The solution to this national dilemma is twofold. First, we need to slow the rate of growth in spending on healthcare; and secondly, we have to spend what we devote to healthcare more efficiently, wisely and effectively. Published studies indicate the rate of waste in healthcare is somewhere between 30 and 50 percent. These causes of waste have to be eliminated. This waste represents hundreds of billions of dollars that could be devoted to making care better and accessible. Even if you look at just the lower estimate of 30 percent, it’s about $800 billion that could be spent to improve care and make it more accessible to Americans. This is where aggressive data-driven process improvement enters the picture. The evidence is steadily growing, that clinician-driven, data-driven quality improvement is the answer to our problems, just as it has been in other industries. Informed, inspired, and engaged clinicians can solve this problem. We will discuss this in great detail in section two of my book and in the presentations related to section two.

For now, suffice to say that experience at leading delivery organizations has clearly shown that clinician-driven, performance improvement can improve outcomes, reduce harm, increase patient satisfaction, drive out waste, and save large sums of money. Value-based performance improvement efforts can assure that waste is eliminated and health expenditures are more efficiently and effectively used. In addition, new more efficient, patient-centric, and ambulatory-based care delivery models need to be implemented. An example of this trend is the NCQA Medical Home. Technology and advanced data management will play a role enabling this new care model. I will discuss this in more detail in section three of the book and in my presentations related to that section.

Several studies have shown that these technology-enabled models of care can reduce the annualized cost to manage some high-profile chronic diseases by up to 40 percent. Given that roughly two dozen chronic diseases are coming from almost 75 percent of U.S. healthcare expenditures, these new models of care offer great potential to address healthcare inflation. They have also been shown to allow clinicians to manage more patients, which will help address a growing clinician shortage, especially for physicians and nurses.

So what’s the bottom line? The traditional healthcare approach, though it has greatly benefited humanity, is no longer working. It’s no longer adequate. It’s time for a new approach in healthcare. We need to take the best of what we created carried into the future and then create new ideas and initiatives that will help us eliminate waste and improve care. In a world of increasingly constrained costs, we have to find a more efficient and effective way to spend the resources we allocate to care delivery and on improved quality and safety, eliminating waste and reducing cost.

High Touch: Caring, not just curing

Now, in addition to financial realities, there are a number of cultural realities that will influence decisions as well as we go into the future. Peter Drucker once suggested that ‘culture eats strategy”. There is definitely truth in this statement, and we ignore its wisdom at our own parallel.

In a 1965 speech, a physician said, “A man stricken with disease today is assaulted by the same fears and finds himself searching for the same helping hand as his ancestors did five or ten thousand years ago. He has been told about the clever tools of modern medicine and somewhat vaguely, he expects that by-and-by he will profit from them, but in his hour of trial his desperate want is for someone who is personally committed to him, who has taken up his cause, and who is willing to go to the trouble for him.”

This quote illustrates a key point. Patients expect, want, and deserve a caring healthcare provider.

What do we get for all that money?

In addition to caring or high touch, patients have other expectations as well. These include choice and a rapid response if they are ill or injured. In terms of choice, Americans have grown used to maximal choice. This also causes them to being insulated from the cost of care, although that’s starting to change. While maximal choice may not continue for everyone, it will remain a powerful cultural expectation. The capitation movement in the 1990s largely floundered on this cultural reality: patients want choice. It will be interesting to see if the affordable care act faces similar challenges. Even if everyone no longer has maximum choice, when it comes to medical care, at a minimum, the American people will want or need to define the limits of choices. Patients will also expect a rapid response when they become ill or injured. This is an American cultural norm. This brings us to a discussion of the Rule of Rescue.

The Rule of Rescue

In 1986, U.S. bioethicist Albert Jonsen described the so-called Rule of Rescue. The Rule of Rescue refers to our need to rescue identifiable individuals facing avoidable death without giving much thought to the opportunity cost for doing so. Note the use of the key phrase ‘identifiable individuals’. The Rule of Rescue describes the moral impulse to save identifiable lives in immediate danger, regardless of the expense.

Think of these extremes, from rescuing a small child who’s fallen down a well, or a woman pinned beneath the rubble of an earthquake or a submarine crew trapped on the ocean floor. In these situations, no effort is deemed too great. In fact, American society frequently applies the same principle to animals. We will rescue the dog trapped on the ice, as one example. The Rule of Rescue has helped, of particular significance to the United States, where the importance of the individual has to long been a part of our cultural fabric. In the U.S., we tend to count ourselves as not truly human unless we pull out all the stops. Increasingly, however, healthcare ethicists and policymakers are asking whether the same moral instinct to rescue, regardless of cost, should be applied in the emergency room, the hospital, or the community clinic.

System Performance, by nation – Major trauma and Heart attack

The Rule of Rescue is reflected in how and what we spend on healthcare in the United States compared to European countries. In the face of major trauma or heart attack, we spare no expense and our mortality rates reflect this reality. As this graph illustrates, mortality following a major trauma in the U.S. is half what it is in European countries. Likewise, mortality following a heart attack is also lower in the U.S, two-thirds of what it is in Europe.

System Performance, by nation – Neonates

When it comes to premature infants, we also spare no expense no matter how premature the infant is, and our mortality rates reflect it. Mortality for the neonates in the United States is substantially less than in European countries.

System Performance, by nation –Prevalence of Patients Undergoing Dialysis

We also use advanced treatments more aggressively in the United States compared to European countries. The performance of renal dialysis in major European countries is substantially less than U.S., as illustrated in this graph.

System Performance, by nation – Prevalence of Patients Undergoing Renal Transplant

Similarly, the performance of renal transplant in major European countries is also substantially less than in U.S. It is not that Europeans do not have patients that would benefit from dialysis and transplant. It is a matter of public policy in using renal dialysis and renal transplant in the treatment of advanced renal failure. The U.S. uses these interventions extensively, the European countries much less so.

System Performance, by nation – Cancer Mortality Rates

Finally, let’s compare mortality rates from cancer between the United States and major European countries, as illustrated in this graph. Cancer is equally prevalent in Europe as it is in the United States, but we tend to treat it much more aggressively here, offering patients every opportunity to be cured, or at least extend their lives, and our cancer mortality rates reflect this reality.

System Performance, by nation – U.S. Men and Women Under Age 65 Have Higher Rates of Potentially Preventable Deaths

However, there is a downside to this approach. Despite spending twice as much as the average Western European country for its healthcare, the United States lags on a number of health system performance indicators, including a minimal mortality – that is, deaths that could have been avoided by timely and effective care. Examples of such conditions include diabetes and acute infections. As this graphic illustrates in terms of total health as measured by mortality amenable to timely and effective medical care, U.S. does not do as well as European countries. The reason for this discrepancy is that the U.S. does not focus on primary care and prevention. Instead, we place a very heavy focus on rescue care. Many countries outperform the U.S. as a result of better public health, a greater focus on behaviors, and better primary care. However, the U.S. performs significantly better for those with severe illness or injury, that is in terms of rescue care, as a result of better access to technology, less explicit rationing and easy access to subspecialists.

Going forward, as the pressure to control healthcare cost growths and the need to manage precious resources more critically escalates, the broad application of the Rule of Rescue will be increasingly obtainable. However, the cultural and moral instincts to apply the Rule of Rescue will remain. Thus, the desire to help those less fortunate will remain strong, especially when their small numbers allow us to see them as unique individuals. This will likely be a very difficult cultural norm for American society to manage as healthcare transformation unfolds.

In Summary…

In summary, over the past century, there has been a remarkable progress, and we know medical care matters. However, medical care is only one determinant of health, and more money needs to be spent on other known determinants of health. Many policymakers feel very strongly that we don’t devote enough resources to clinical care and more dollars need to be spent on other determinants of health. At a minimum, this will put an extreme pressure on those of us involved in healthcare delivery to reduce or eliminate wastes in the delivery system.

Powerful cultural norms like high touch, the desire for a choice, and the Rule of Rescue will likely continue to play a significant role in patient decisions and influence how we allocate resources. Those needs are not going to go away. And at the same time, the pressure to achieve more value from the resources that we do dedicate to clinical care will increasingly grow in the years ahead. That is, healthcare providers and healthcare organizations will face intense pressure to use existing resources more wisely and to efficiently deliver more high quality, safe, and an effective and accessible care within the limits of what the nation can afford. This is definitely possible. How it will be accomplished will be the focus of section two of my book and the presentations associated with section two of the book, and I invite you back to hear those and discuss them.

Healthcare: The Way It Should Be

This concludes today’s presentation. This presentation is designed to be part of an educational series on healthcare transformation but generally follows the book I am writing on the same topic. We will be holding another presentation in early March that will cover the rest of the topics in section one of the book before moving on to the presentation that’s covering section two of the book.

Section two is the heart of the book. It is designed to help clinicians and help organizations understand what they need to do in order to successfully ride the wave of transformation over the next few years.

I invite you to continue participating in this educational series. I would also invite you to provide us feedback. I will happily make my email address available to you, and anyone listening is more than welcome to contact me with ideas, comments, or questions. My goal for this book is for it to be a highly valuable resource for anyone involved in healthcare. As a result, your feedback is incredibly important to me. The book will be available primarily in digital format, making it easy to enhance the book as new ideas emerge and as new directions become apparent. Please feel free to contact me with any suggestions you might have. This is exciting work and I hope you will find this educational series very, very valuable.

As a reminder, the first two chapters of my book are now available to anyone who is interested in reading them. Thank you for your time and attention.

Before we move to the questions, I would like to post three more poll questions…

Poll Questions

They’re represented on this slide. So please vote now.

First question, how difficult do you believe it will be for Americans to balance high touch, the need for a choice, and the Rule of Rescue with the need to control healthcare costs? Very difficult, difficult, or easy?

[Dr. John Haughom]
Good. Well, the answers don’t surprise me. Somewhere around 68 or 69 percent of you said it will be very difficult and 31 percent said it will be difficult and 1 percent said it will be easy. I tend to agree with the roughly 99 percent of you that say that it’s going to be difficult at best.

Second question, does your organization have an effective strategy to engage clinicians in data-driven improvement?

Okay. It looks like we’re kind of leveling out here. About 53 percent of you answered the question and affirmative, said yes, 31 percent said no and 14 percent don’t know. So, you know, I’m pleased actually to see that 50 or 55 percent of the organizations that you represent are involved in this important work.

Then the final question, is your organization considering new care models like the NCQA Medical Home or other similar type remote patient management models?

Well, it looks like we’ve leveled out. 64 percent say yes. That warms my heart. That’s fabulous that two-thirds of you are in organizations that are doing that. 11 percent no and 25 percent are unsure. Though that is better than I expected, I would expect about 50 percent, but still quite a few that don’t do that.

Okay.

Questions and Answers and Additional Information

Just as a reminder that if any of you are attending HIMSS this month in Orlando, you will find the Health Catalyst booth at #6076. There will be some special presentations here of successful stories from some of our Health Catalyst clients, as you can see on the slide. You also can see the hashtags for Twitter that are appropriate. Now, I’ll take the time and the remaining 12 minutes to turn to questions.

Dr. John Haughom: Okay. I’m scanning. Let’s see…Somebody questions whether I’m providing the history lesson and the answer is yes actually because too often in the modern debate the history is overlooked and what we’ve accomplished over the last hundred years serves as a platform for going into the future. So I think in fact that history is very, very important.

Tyler Morgan: Dr. Haughom, we’ve got a question here that says, “In the future, what will be the best practices considering benefit designs, engagement strategies, and consumer tools that drive optimal behaviors and personal healthcare engagement and decisions?”

Dr. John Haughom: Well, that’s a complicated question with lots of different nuances in the answer. Let’s start with I think that what’s going to happen in the U.S. We’re going to see more and more emphasis being placed on having patients feel the impact of their clinical decisions and the healthcare that they request. That’s going to make the consumers more price sensitive, which in turn will I think influence their desire to pay more attention to behaviors that will help them avoid those expenses. I think the U.S. has to get on with developing some very interesting models that are less hospital-centric and more ambulatory and patient-centric using technology to enable them. That will be a subject of our presentation later in this series but it’s very clear that those models will save substantially in terms of costs and put patients more in power of their health and their health decisions. It will be very empowering for patients. It doesn’t mean that the hospitals will go away. Our aging population will always need them. But we do need to need to shift the answers more to the ambulatory world.

Somebody asked a question about my view on medicine and how it’s transitioning from more art to more science. That’s an interesting question. I hope we maintain a balance there. As I tried to point out in this presentation, science is going to continue to advance, and 50 years from now we will be performing even more miracles than we have over the last 100 years. And so, that’s very important. And the rest of the world quite frankly looks at U.S. to continue to advance the science of clinical care. Having said that, the one quote that I provided you very capably illustrates, when people get ill or injured, they deeply appreciate caring and compassionate providers. We must never forget that as we go forward. And that will be a key success factor for healthcare providers and healthcare organizations going forward.

Tyler Morgan: Okay. Dr. Haughom, we’ve got enough time for two more questions. We do have a question that says, “Do the two problems require different solutions? Slowing cost implies increased productivity but being more effective implies improved outcomes. The two may be an opposite into the spectrum.”

Dr. John Haughom: Well, I think we hear people say they are at the opposite ends of the spectrum, but I actually don’t believe that that’s truly in the majority of cases. Now, you can always find instances where it’s true but I think in the majority of cases it’s not true. And in order to confirm that, you just have to look at other industries because as a matter of fact, in other industries, the very similar approaches that I will be discussing in section two have been implemented, the result has been huge increases in productivity and massive improvements in products and services, and I do not think there will be any difference in healthcare. And some of the lead organizations that have implemented these tools and techniques are in fact showing that’s true. In section three of the book, I will have a chapter devoting itself to the examples of that.

Tyler Morgan: Time for one last question, requesting a response to a statement, “We must move away from a supply-driven healthcare system organized around what physicians do and toward a patient-centered system organized around what patients need.” I think they’re asking for your opinions in response to that.

Dr. John Haughom: Well I couldn’t agree more. Now, sometimes when I make a statement that’s similar to that in audience with clinicians, some people take affront to that. I don’t think it’s threatening at all to clinicians if patients become more empowered. In fact, I think it’s quite the reverse. I think that patients, when they get ill or injured, know who they need to go to. One of the things that I’m always amused by is the fact that insurance companies have striven for over a decade to get more involved in clinical care. Now, please understand. I understand the need for health insurance companies and I know they have a role. Having said that, when people get ill or injured, what do they do? They turn to their local clinicians and they turn to their local hospital for care. And so, the more we empower them, the more we inform them, the more we help them be involved in their decisions, the more it’s going to put clinicians toward the center and local hospitals toward the center. And so, what we have to do is prepare for them to come to us and we have to be prepared to provide them the highest quality, safest, most efficient, and most effective care we can.

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