For now, it’s COVID of course. Hospitals are overflowing with sick patients, mostly unvaccinated. Outpatient departments are closed, and staff are reassigned to fight the latest variant, Omicron. The burden on healthcare workers is big and could have been avoided, which makes many sad, frustrated, and downright angry. So, hats off to everyone doing the work caring for the sick. We respect you, are grateful for you, and hope you can heal as you have healed so many others.
It does appear with a combination of more people getting vaccinated and herd immunity which ironically Omicron may accelerate, the crisis may move from pandemic to epidemic. That will relieve some pressure for sure. We will be able to focus again on improving care, creating new care models, and obsoleting old ones.
As Catalysis looks to the future our board had a chance to speak with futurist David Johnson of 4sight Health. He’s the author of the book Customer Revolution in Healthcare. He also wrote a paper recently titled The Roaring ‘20s Then and Now: Insights on Healthcare’s Post-Pandemic Future comparing the post-pandemic 1920s to what could be for the post-pandemic 2020s. There was an explosion of innovation in the 1920s that included the automobile, the airplane, and new drugs. Also, less well known, the Flexner report detailed the standards for medical education which were universally adopted and are still in place today. He suggests 2020 as a parallel to the post-pandemic innovation environment of one hundred years ago. This explosion in new possibilities is fueled by the breathtaking advancements in technology that is enabling machine learning which has the potential to revolutionize diagnosis and treatment of disease, gene sequencing technology that will eliminate many chronic diseases and decentralization of health care delivery processes that allows for mass care customization making each care experience personal and customer centric. Read more about technology integration here.
As these innovations change healthcare, new payment processes will emerge. Johnson cites the Maryland hospital payment experiment in which all payers agree to pay hospitals the same rates for procedures through global budgeting. The global budgets incentivize disease reduction in the population and fewer hospital stays. Other programs such as capitated insurance products like Medicare Advantage have been successful at keeping people healthier than the fee-for-service Medicare counterpart.
As more risk is accepted with global budgeting and other financial mechanisms, the primary care system will become even more valuable and redesign will revolutionize care. There is a reason that Optum, a subsidiary of United Healthcare, has hired over 50,000 doctors in the last few years. They acquired no hospitals. Johnson suggests advanced primary care models that include a team of experts from pharmacists to mental health workers and many others joining teams to design radically different new care models. This isn’t just improving the existing primary care system; it is obsoleting the old and creating something new focused on all the patient needs not just the medical ones.
I‘ve had time to interview many healthcare CEOs in the last few months. Almost all confirm that building an advanced primary care model to manage population risk is necessary for any future scenario they can imagine. The question is how. I think we are going to need a different system. Most other industries have expertise in developing new service delivery products, but we don’t in traditional healthcare delivery. We are going to need to change that.
Care delivery organizations will need to invest in a research and development system. I’m not talking about a skunk works that designs apps for phones. This is a focused system summarized in five phases; research, design concepts, protype and iterate, model cell, and spread (Read more about the system here). The output is only to develop new integrated care models. We described this process in the Harvard Business Review a while ago, but this system is better defined than ever before.
Let’s be clear that innovation does not come at the expense of improvement. A robust lean management system that supports the operations and improvement of new and existing care models is necessary to spread and scale the new care models. I believe the future is bright for organizations that have a combination of a robust lean management system and a Research and Development system for the creation of new care models.