Uncertainty is often considered the bane of economic success. With uncertainty comes paralyses as economic players hold their cards tight, waiting for the chips to fall. Healthcare is no different. The paralysis prevents innovation, R&D, investment in capital—all of which hurt the patient.
The Customer Revolution in Healthcare: Delivering Kinder, Smarter, and More Affordable Care for All
Using data analytics to drive value-based care
During his 28-year career in investment banking, Dave Johnson managed over $30 billion in healthcare revenue bonds and led significant strategic advisory engagements for health systems. Today, he serves as Founder and CEO for 4sight Health, an advisory company working at the intersection of healthcare strategy, economics, innovation, and capital formation. Johnson stopped by Strata Decision Technology’s offices in Chicago to share his thoughts surrounding today’s customer revolution in healthcare—and what providers need to do to become part of it.
“Status quo” healthcare and productivity
Today, the status quo of American healthcare often involves over-treatment, overpricing, and fragmentation. Instead, Johnson argues, revolutionary healthcare—and the care we need—involves the right care at the right time, right place, and right price.
Since 2000, the ratio of average cost of a U.S. family’s health insurance policy to median household income has more than doubled. As part of their 2019 Employer Health Benefits Survey, the Kaiser Family Foundation reported that the average premium for family coverage has increased 22% over the last five years and 54% over the last decade. Over time, America’s insurance policies have only grown more expensive for its families and patients.
The way to revolution
To overcome this status quo, Johnson suggests that three force multipliers will lead to the revolution we need in healthcare.
1) Empowered buyers. Payers and providers working together to handle the insurgence of new, value-based payment models will advance the revolution, creating a healthcare industry focused on value. In the marketplace of the future, demand-driven change will lead to significant results.
2) Liberated data. With usable data, companies can begin to take control and demand value from the system. “Just think of the predictive power, to be able to harness that information,” says Johnson. He suggests that data in the right form—and provided to the right user at the right time—can have incredible results.
3) Pro-market regulations. “When businesses get big, they don’t want to compete anymore,” says Johnson. “They would prefer to use size and leverage to limit competition.” As healthcare continues to grow, so does waste and inefficiency. The system today lacks regulations that would promote market-based value and innovation.
Focus on cost and experience