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Leadership

COVID-19: Time to rethink core models of U.S. health care system

First of a two-part series on a post-COVID agenda for health care.

David Brailer | June 4, 2020

As COVID-19 swept across America, governments at every level stumbled.  Public health leaders made a shamble of a pandemic response playbook that was well-known and oft rehearsed. Despite this, the heroic effort of hospitals, clinicians, innovators and entrepreneurs, alongside millions of Americans who stayed home, volunteered, went to essential jobs and protected the elderly, slowed the spread of COVID-19 and saved lives. The pandemic is far from over, and too many lives have been lost, but it could have been much worse. 

The battle against COVID-19 has been empowered by the robust public-private partnership that underlies American health care. The private sector rose to the challenge rapidly and without concern for profits or long-term consequences.  Imagine if health care in America was government-controlled, without independent organizations and companies that could act of their own volition without waiting for orders.  Such a folly of bureaucratic obedience could have brought us all down. Without the private sector’s resolute response, US deaths and economic catastrophe would make our current experience, no matter how awful, trivial by comparison. 

In addition to infecting millions and killing more than a hundred thousand Americans, COVID-19 also broke the health care system itself. Or, more specifically, it showed that the key foundational models that underly the health care industry (the population model, care model, business model, information model and innovation model) are hopelessly broken. Health care professionals are long on heroism and courage, but are also undermined by obsolete regulations, stalled reforms and misaligned interests. Even though we have a long way to go in the COVID-19 fight, now is the time to examine the damage and rethink the future.  I am writing today about how COVID-19 broke health care as we know it. Next week, I will continue with how we can catapult out of the pandemic with a new agenda for reform. 

Read more:  A post-COVID agenda for health care: goals and principles to guide reform

Population model. COVID-19 demonstrated that there is no model for population health in America.  Or said better, it showed that we have a very large number of arbitrary and overlapping populations when it comes to health management, with no holistic approach. Employers and health plans want their populations to be managed in different ways, so providers have no unified set of prevention and screening standards to work against. There is no truly overarching population view, making screening and prevention subscale and ineffective. If a person changes health plans or moves from commercial insurance to Medicaid or Obamacare as many people are now doing, they start over on prevention and screening, and may fall through the cracks.  At the same time, we have not developed mechanisms for or commitments to community-level health surveillance. Besides enabling more effective management of disparities and challenges at the local level during normal times, this capability is what we need to track COVID contacts and slow the spread now. We need to rethink how we approach population health so it is integrated and effective, and does more than check boxes on government ratings.

Care model. The focus of the care delivery model for decades has been efficiency over all else, including resiliency. COVID-19 showed that this is not consistent with the level of protection we need for black swan events like epidemics. We have been reducing per capita hospital bed capacity and minimizing supplies, inventory and redundancy for years to stem the growth in health care costs (“if you don’t have a hospital bed, you can’t fill it with a FFS patient”). This nearly toppled New York City and may threaten other regions during coming COVID waves. The only saving grace was that this shift has brought the US more ICU beds per capita than any place else in the world. At the same time, the run up to the COVID-19 crisis showed the fragility of our outpatient care capabilities. Yes, hospitals stood empty, ready for the COVID-19 onrush.  But primary care and ambulatory surgery centers, too? Care in the home? Retail? We have neglected outpatient care and alternative sites of care for so long that they weren’t ready when we needed them. This outmoded model of care resulted in a tremendous amount of “health debt”. Visits to emergency rooms for heart attacks and strokes dropped 40% year-over-year during March and April. What happened to those people?  What about all the mammograms, colonoscopies and other preventative screening that was postponed?  How many new cancers will come in, at more advanced stages in the next year or two? The same is true for people whose diabetes, COPD or mental health deteriorated without access to care. Our population will carry a long-term set of health deficits, perhaps throughout their lives, because of COVID-19. Providers will face an ongoing burden of care, particularly if lockdowns return or if people are afraid to come back to sites of care.  We need to rethink and modernize our model of care so that it balances efficiency with resiliency and has diverse capabilities for patient engagement. 

Business model. Value-based payments have been inching along, but at such a slow pace that we don’t have a payment system in transition, but rather a payment system with permanent and disabling financial conflicts and misalignments. This leaves no entity able to achieve true efficiencies, integration or clarity of purpose.  And it has weakened many hospitals. For them, the empty emergency rooms, hospital beds, procedure rooms and waiting rooms from COVID-19 have led to a revenue decline of more than $250 billion. This financial depletion will starve providers of the capital they need to continue operations – credit ratings have been universally downgraded for non-profit institutions and P/E ratios have collapsed for public companies.  The federal government may bail them out, but it won’t repair the lasting damage to the sustainability and solvency of many health care organizations. While this seems to benefit capitated providers and health plans in the short run – a constant flow of revenue with lower medical costs paid out – this will catch up with them when employers demand rebates or 2021 premium reductions and, most importantly, when 25 million Americans move from commercial insurance to Medicaid or Obamacare.  The messy, chaotic, mis-aligned business model of health care needs to be rationalized and done so rapidly. 

Information model. If one wanted to hobble a nation’s ability to respond to a pandemic, one would design a health information model like America’s – siloed, enterprise-based data with little information sharing and neglect of non-PHI data (geolocation, activity, home temps, etc.). These deficits prevent compiling clinical records in order to rapidly diagnose COVID-19 patients, identify principal risk factors for morbidity and mortality, evaluate the efficacy of various real-life treatments outside of trials, or identify prognosticators of recovery. Poor health information integration also makes it difficult for public health agencies to track positive tests and get actionable case reports without enormous manual efforts. While we have made progress, and the recent ONC interoperability and patient access rules are a much-needed improvement, we are still stuck in a model of siloed health information. COVID-19 shows us that we need to put interoperability, data sharing and accessing new forms of data in the center of our health information model and return our focus to the basic challenges of making that part of routine care. 

Innovation model. Innovators played an important role in the COVID-19 response. But the very fact that those innovations were adopted quickly in a crisis shows how anti-innovative health care has become. Too many innovations are status symbols or vanity projects that health systems and health plans use to create an aura of progress rather than to fundamentally remake their businesses. Take telemedicine, for example. It has languished for years because it disrupts traditional providers. When it was finally needed during COVID-19, the barriers fell away overnight.  The same is true in life sciences. If we can now create a vaccine at scale in 12-18 months, why can’t we do that routinely?  FDA regulations that aren’t necessary now during a crisis shouldn’t snap back in place during normal times without a reason. Beyond these historical barriers, innovation could be even more challenging in the post-COVID-19 world. Hospitals, health plans and life sciences companies will be focused on COVID-19 for a long time, and their appetite for risk and disruption may be depleted by the time it ends. Talent and capital are focused on COVID-19, being pulled from other projects, and it is very difficult, if not impossible, to enroll patients in studies during COVID. We will have a large innovation deficit across health care sectors in the post-COVID-19 world and need to change how the industry approaches innovation in the future. 

The social and economic disruptions brought by COVID-19 are an existential threat to the public-private foundation of our health care system. The stresses are so great that health care is likely to be rearchitected in a sweeping reform of the industry, including the potential for nationalizing insurance or provider sectors.  Those who value the public-private foundation for health care need to step up and fight for it – and to do so now. The way to fight for it is to rethink and strengthen the system so that it works at the community level, by adopting modern models of care, tuning the business model so profits are aligned with value, using information to advance care and adopting innovative new ideas. That will be the work of CEOs and other health care leaders for years to come.  

 

 

 

About the Author

David Brailer, MD, PhD, is the Founder and Chairman of Health Evolution

David Brailer is known around the world for his leadership and entrepreneurialism in health care. Over the past three decades, Dr. Brailer has built a variety of private and public-sector organizations. From 2007 to 2017, Dr. Brailer was managing partner at Health Evolution Partners, a fund that invested in companies with the potential to transform health care delivery. Prior to that, Dr. Brailer was appointed by President George W. Bush as the nation’s first National Coordinator for Health Information Technology. From 1996 through 2002, Dr. Brailer was founder and CEO of CareScience, a health care information management company. He earned his M.D. from West Virginia University and his Ph.D. in economics from The Wharton School. Dr. Brailer serves on the Board of Directors of Walgreens and as a board member or chairman of five private health care companies.