The once insular health care industry now finds itself facing the fallout from decades spent resisting change: an all-sides blitz orchestrated by outsiders intent on doing the changing for it. Besieged by upstarts and titans alike, even the most change-averse organizations are being forced to adapt to this threat. For leaders already laying foundations for innovation within the industry, these disruptions are providing new platforms on which to build the health care delivery models of the future.
Hospitals have long been the exemplar of the old-school model, where bigger is better, evolution is met with suspicion, and more services — regardless of their necessity — mean more lucrative kickbacks from the regulators in charge. As hospitals cling to their shiny facades and standard procedures, the federal government props them up with inefficient regulations and misdirected incentives. Bureaucrats pay them to diagnose and treat illnesses, shelling out money every time a doctor orders a test or performs a procedure. This keeps hospitals in the sickness business — not the health care business.
The approach even extends to so-called accountable care organizations, the Obama-era conglomerates whose carrot-and-stick incentives encourage collaboration and punish or reward outcomes based on a set of ever-shifting performance metrics. These behemoth provider networks receive government funding based more on the number of services they offer, and less on the results these services achieve. Historically, accountable care organizations have also tended to favor hospital models over local or standalone providers.
New commercial health care strategies will demand that players throughout the industry change both their mission and their overall mindset. Care delivery organizations need to move away from simply working to cut costs or maximize subsidies and instead move toward seeking growth by doing business — that is, patient care — differently. This new approach should lead to a more holistic rendering of accountable care, one that is more faithful to the objectives it is supposed to achieve.
One initiative that holds particular promise is the microhospital, either standing alone or situated as part of a local “healthplex” replete with an exercise facility, laboratory testing, IV therapy, imaging, and pharmacy services. Microhospitals’ outpatient or short-stay facilities often hold fewer than 50 beds, and are able to tailor their offerings toward their communities’ specific health needs. Take the CHRISTUS Southeast Texas Health System, for instance. While its Beaumont facility offers a number of sports-oriented rehabilitation services, its other locations offer specialized wound care and outpatient lactation centers.
With the advent of the microhospital and healthplex, consumer-minded providers are making strides toward delivering truly accountable patient care. These facilities offer a much-needed middle ground between costly, over-large hospitals and underequipped, freestanding EDs.
Like other healthplexes whose micronetworks include off-site providers and representatives from their local communities, CHRISTUS’ facilities coordinate with surgeons at outside health practices. This also allows them to collaborate on consumer-focused initiatives that patients specifically request, not just the ones the government will subsidize.
The accountability of a microhospital or healthplex lies with the patients under its care, not the regulators overseeing its reimbursements. Instead of waiting to update its facilities in response to regulatory mandates, for example, CHRISTUS uses routine patient utilization analyses to determine when and how to upgrade its facilities.
By coordinating with post-acute and primary health providers, these new delivery networks take on responsibility for their patients’ health over an entire lifetime, not just across a single episode of care.
Microhospitals and healthplexes also boast lower overhead, allowing their networks to invest in more targeted population health approaches, such as Humana (HUM) has done with its Bold Goal initiative. Aimed at instituting programs that would address select communities’ most pressing health issues, Humana’s pilots included offering diabetes-friendly cooking classes in Knoxville; providing mobile health services to Medicare populations without sufficient standalone primary care resources; and creating nutrition partnerships between Humana, local food banks, and YMCA facilities in so-called food deserts outside San Antonio. The Bold Goal programs boasted promising results, increasing Medicare members’ healthy days by nearly 10 percent in 2017.
Lower overhead also enables health systems to create budgets that focus on addressing the wellness issues most relevant to their local communities.
With one large hospital roughly the equivalent of five healthplexes in terms of beds provided, the challenge posed to America’s hospital-based health model has catalyzed more consumer-driven, collaborative approaches to competition than we have seen in the past.
To be sure, larger hospitals and nursing facilities remain patients’ best options for more complex procedures and longer-term stays. Yet even these institutions are feeling the pull to become more targeted in the resources they provide, as subacute and lower-cost services expand to off-site locations (either as affiliates or as competitors). New roles for traditional hospitals — as providers for almost exclusively long-term or highly acute cases — may be difficult to adopt, since hospitals have historically been reluctant to embrace transformative change.
In the wake of internal and external industry disruption, health care systems and providers have little choice but to augment innovative delivery models with new, shared-risk payment approaches and more streamlined, collaborative relationships. Providers in networks, if not across the nation at large, must define shared objectives — from mutual improvement on performance metrics to reductions in administrative burden — and design specific mechanisms for achieving them. Only then will we see a truly coordinated approach to care, yielding more transparent metrics and better patient outcomes across the continuum.
Technology plays a powerful role in this effort, which may be why we’ve seen an increase in digital disruptions, like Cerner’s collaboration with Apple or Intermountain’s new digital mental health services platform, which complement delivery innovations such as the microhospital and healthplex. Because of the growing need for collaboration alongside competition, remote facilities and delivery organizations are being pressured to reevaluate the ability of their information technology systems to provide real-time, usable data for patients and providers. Cutting-edge systems that allow them to track, measure, and display meaningful outcomes will differentiate organizations amid an increasingly competitive market.
Developments in data tracking and sharing provide opportunities for patients and physicians to coordinate care across various sites within a health system without running everything through an expensive or inaccessible hospital. Research suggests that this approach is, in fact, a better guarantor of the benefits that accountable care organizations were meant to provide: heightened quality, collaboration, and competition, all with lowered costs.
It’s a time-honored truth that most people — and organizations — don’t change unless they have to. It looks as though health care’s moment for change has finally arrived. In the battle between old models and new challengers, it may be up to consumers and communities to declare the winners.
Rita E. Numerof, Ph.D., is president of Numerof & Associates, a firm that helps businesses across the health care sector define and implement strategies for winning in dynamic markets. She reports no financial interest in the companies mentioned in this article.