By Clayton M.
Christensen, Andrew Waldeck, And Rebecca Fogg
October 30, 2017
Finally,
health care, which has been largely immune to the forces of disruptive innovation, is beginning to change.
Seeing the potential to improve health with simple primary-care strategies,
some of the biggest incumbent players are inviting new entrants focused on
empowering consumers into their highly regulated ecosystems, bringing down
costs.
This shift
is long overdue. Whereas new technologies, competitors, and business models
have made products and services more affordable and accessible in media,
finance, retail, and other sectors, U.S. health care keeps getting costlier. It
is now by far the world’s most expensive system per capita, about twice that of
the UK, Canada, and Australia, with chronic conditions such as diabetes and
heart disease now accounting for more than 80% of total spending.
These
astronomical costs are largely due to the way competition works in American health
care. Employers and insurance companies — not end consumers — call the
shots on what kind of care they will pay for. Large hospitals and physician
practices, in turn, compete as if they’re in an arms race to attract payers,
adding advanced diagnostic gear or new surgical wings to differentiate, driving
up costs.
In most
industries, disruption comes from startups. Yet almost all health care
innovation funded since 2000 has been for sustaining the industry’s business
model rather than disrupting it. Our analysis of Pitchbook Data shows that more than $200
billion has been poured into health care venture capital, mostly in biotech,
pharma, and devices where advances typically make health care more
sophisticated — and expensive. Less than 1% of those investments have focused
on helping consumers to play a more active role in managing their own health,
an area ripe for disruptive approaches.
The Whole-Person Approach
One big
incumbent that has become more receptive to disruptive innovation is the
insurance giant Humana. It has partnered with Boston-based startup Iora Health.
Created by physician-entrepreneur Rushika Fernandopulle, Iora has advanced a
disruptive primary-care model that uses relatively inexpensive, nonphysician
health coaches to identify patients’ unhealthy habits and life styles and guide
them toward better choices, before health problems arise or become serious.
Since its founding in 2010, Iora has attracted more than $123 million in
funding and now operates 37 practices serving 40,000 patients in 11
states. Iora trains health coaches to become the consumer’s advocate, acting as
the quarterback of an extended care team that includes a physician. When
visiting an Iora clinic, the patient meets with the coach to establish a health
agenda before seeing the doctor. After the patient sees the physician, the
health coach and patient debrief to ensure the patient can confidently
pursue the agreed-upon health goals — for example, by adopting
new health habits. The coach then serves as the patient’s connection with the
Iora team, and creates accountability.
Another
feature of the Iora model is the morning huddle, when the entire care team
invests an hour discussing the health status of the clinic’s population.
Because Iora assumes full financial risk for its patients — it is paid a
set fee per patient for a given period — the huddle prioritizes those who
require the most attention and directs care around their needs.
To that
end, Iora has developed a “worry score” methodology, which rates each patient
on a 1-to-4 scale according to their health status and needs. Patients scoring
a 4 require a specific action, such as immediate outreach from a health coach.
If the patient’s outlook turns for the better, their worry score is
lowered, a development celebrated by the team.
The
Iora model has produced dramatic results in the management of chronic
conditions. For example, an unpublished Iora study found that inpatient
hospital admissions among a cohort of 1,176 Iora Medicare enrollees over an
18-month period decreased by 50%, emergency department visits decreased by 20%,
and the total medical spend declined by 12% — this despite the cohort
being sicker than average Medicare patients.
Other
new entrants (Oak Street, Omada, Docent, ChenMed, WellMed, Mosaic,
and Aledade,
among them) are also successfully implementing Iora’s care-team and
fee-for-value reimbursement model. What make the model disruptive — and
able to get a foothold among mammoth incumbent provider organizations — is
the combination of delivery and payment schemes (capitation is the predominant
model); either alone would be unlikely to succeed.
Encouraging Disruption
Payers
are getting onboard. A range of recent pilot programs modeled on Iora’s —
by Aetna, CareMore, Dignity Health, Humana, Kaiser Permanente, and the Medicare
Advantage program — are using coaches and home visits to substantially
improve health and lower costs. One study found that providers participating
in Medicare’s Independence at Home Demonstration saved $1,010 per beneficiary on average in the
second year of the program, primarily by reducing hospital use.
Another
care-team-based pilot, the Diabetes Prevention Program, reduced patients’
risk of developing the disease and saved Medicare an estimated $2,650 per
beneficiary over a 15-month period by helping patients lose an average 5% of
their body weight through changes in diet and exercise. The program is
delivered through primary care groups, hospitals, YMCAs, and telehealth
networks, and patients are supported by weekly, hourlong “maintenance sessions”
with coaches.
While
this care model has proved powerful at a small scale, to have significant
impact on costs and outcomes nationally it must serve millions more consumers.
To achieve that scale, we recommend the following strategies:
For care providers: Embrace the business
model of extended care teams that include health coaches. We recommend starting
with pilot programs under which hospitals and clinics take on financial risk
for patients’ health. This way, care teams are incentivized to help patients
stay healthy.
For payers and insurers: Private-public
partnerships like Medicare Advantage (under which
for-profit insurers administer plans paid for by the government) have become
successful marketplaces that allow disruptive models. We recommend extending
programs modeled on pilots like Independence at Home and the Diabetes
Prevention Program across privately-funded insurance markets.
For legislators: Work to enable new models
of care that lower costs by incenting individuals, payers, and providers to
improve wellness, rather than treat disease after it manifests. This requires
fostering a robust individual insurance market in which payers reward providers
for helping patients stay healthy.
https://hbr.org/2017/10/the-innovation-health-care-really-needs-help-people-manage-their-own-health?itx[idio]=8812325&ito=792&itq=20925643-efdb-4ac1-b213-def699bedb1c
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