Tom Sullivan | September 22, 2021
Whereas the pandemic slowed so many aspects of life down, the rate of innovation in health care and other industries increased to levels previously considered by many to be nearly impossible. From artificial intelligence to virtual visits and web-based digital tools, health systems deployed new technologies in the COVID-19 crisis.
Now that the pandemic has revealed how fast health care organizations can move, CEOs and executives are asking pertinent questions about how long they can continue operating at this new speed.
“How do we change the culture of medicine and pick up on what happened in COVID, which is we adopted a new pace of change, a new sense of urgency to respond to a clear and present danger? How do we actually feel the other types of danger that aren’t necessarily clear and present to accelerate the pace of change within health care more broadly?” asked Sachin Jain, MD, President & CEO, SCAN Group and Health Plan, during the Health Evolution Summit 2021 in late August.
Joining Jain on the stage were Jon Perlin, MD, President of Clinical Operations and Chief Medical Officer, HCA Healthcare, Farzad Mostashari, MD, CEO and Founder, Aledade, and Chris Chen, MD, CEO, ChenMed.
To answer Jain’s questions, the executives discussed what private sector and government agencies need to do to preserve the new pace of change: scaling innovation, changing financial incentives, and refining health care policies.
“This is a moment that really is disruptive. COVID has forced change. To quote the famous philosopher Yogi Berra, ‘The future ain’t what it used to be,’” Perlin said. “That future has been accelerated and there are things that are incremental, but I think COVID forced us to think differently, to really think about a step change in performance.”
Describing HCA as “a large corporation with the soul of a startup,” Perlin said its leaders are “really thinking about how to use the speed and the digital backbone to enable a new way of doing business.” To drive and scale innovation, HCA established a new division called Care Transformation and Innovation to determine ways to leverage digital enablement tools for care providers.
Chen said the biggest challenge to scaling today is not the need or demand for care services. “What’s our barrier to scale? It’s really about how to scale faster and there’s a lot of innovation happening,” Chen added. “The question for us is, number one, how do we scale faster? And number two, how do you scale the simple, rather than thinking about all the overwhelming amount of complexity?”
Mostashari pointed out that replicating some simple things at scale can be very beneficial.
“It’s not a crazy new idea to call your patient after they go to the emergency room. But what’s new is being able to create a program where independent disparate practices can have real-time event notifications and a workflow for doing so, and a monitoring system and a management system and a payment system,” Mostashari said. “What has changed is the ability to scale this across multiple different geographies.”
Changing financial incentives
The first step is aligning the incentives, Chen added, otherwise health care organizations will continue doing exactly what they do in a fee-for-service model and keep growing larger and larger.
Mostashari said health care needs a robust program focused on competition policy because if there is no competition then none of this matters.
“The game is still the fee-for-service game to get as big as you can, to become as much of a dominant player as you can,” Mostashari said. “I’m glad to see there’s an Executive Order on competition because that is the big glaring void right now.”
Chen noted that health care policy and practices need to transition from being rewarded for more acute cases, more expensive care, more complications, and more preventable, catastrophic events and move upstream to prevention.
“To create a strategy that expects large systems to transform themselves is probably not the right strategy,’ Chen said. “The right strategy actually is to find the folks who have something to gain, to create something new that will drive substantial change. And with the government enabling that and supporting you actually get an exponential effect.”
Refining health care policies
Jain recounted that when he was an undergraduate student, the common answer to every health care problem was that the U.S. needs new health policies.
“I would say we’ve had a Renaissance over the last decade and a half coming out of the HITECH Act, coming out of the Affordable Care Act, where we have a lot of new policies,” Jain said.
Mostashari added that policy makers cannot simply flip a switch and then take a break. Instead, they have to be constantly vigilant to make sure that things are going well.
“People underestimate in policymaking the importance of polishing the stone. None of these programs were perfect the day they came out, so you have to continually use policy to grind away the rough edges and make it work,” Mostashari said. “If that happens, then we will have policy tailwinds. And I think that is the key, that iteration, that sense that we’re going to fix it.”
Chen said the government also has to enable entrepreneurs by reducing existing barriers throughout the industry.
“We have data barriers, we have high fixed-cost barriers, and barriers that will disable entrepreneurs who are starting up,” Chen said. “How do we get these independent doctors to align and come together to be successful? That is what the role of government is.”
The U.S. health care system does not necessarily need 50 new models at this point but, instead, to create what Mostashari called “a chassis of the Medicare Program, the Medicare Shared Savings Program and Medicare Advantage,” and then to continue iterating on those.
The hard part: Achieving that future
Understanding and articulating what shape an ideal future should take is one thing. Developing and executing a comprehensive strategy to make that a reality is harder.
Scaling innovation is, of course, challenging. Changing financial incentives and refining government policies will naturally require some degree of public-private collaboration, as will removing the barriers that make true transformation possible in health care. All of those will take time and must be performed without neglecting patient care and safety.
“This is about as close as you get to the metaphor of changing the engine while the plane is flying,” Perlin said. “We need the mechanisms so this is not only a safe flight but a fast flight that takes us to an environment where care is better and certainly more affordable and efficient.”