Why can’t all health plans pick us up and take us to the gym?

If we look at the bell curve of adopting healthcare delivery models in the United States, we are still early adopters of the quality variety in 2019. Take the Medicare Access and Chip Re-Authorization Act (MACRA) which has been the flavor for Medicare Part B’s quality reimbursement programs since 2015. The Merit-Based Incentive Payment System (MIPS) and Alternate Payment Model (APM) are the two reimbursement tracks within MACRA that have emerged as the primary payment mechanisms of Medicare Part B services. Roughly 45% of all Medicare spending comes from Medicare Part B, so the implications of the success of its delivery systems cannot be overstated. Picture this, the same people that quizzed Mark Zuckerberg about privacy concerns on those congressional committees are from the same cloth as the ones who helped construct our existing healthcare delivery models and are creating the frameworks for future healthcare delivery.

Kahneman and Tversky would appreciate the fallacies that operate within the regulatory bodies that design, create, and manage these programs. However, one Medicare delivery system is gaining momentum. Look no further than our friends in the Little Havana region for a picture of that model working well. Medicare Advantage (MA) enrollment has doubled in the past ten years without as consistent of a change in terminology as its Part B brother (See the evolution of Meaningful Use if you have interest). Could the MA model’s architecture be the blueprint for future healthcare interactions across consumers, payers, and providers? 

Medicare Advantage plans are capitation-based models that operate within a finely defined demographic of Americans. Despite Medicare Advantage being a supplement to traditional Medicare, three major players and several others provide Medicare beneficiaries coverage from the private industry. A single-payer healthcare system is complicated to retain efficacy, competition and openness in the marketplace. The healthcare operations within states, payers, and healthcare systems are successful based on significant regional and local dependencies. Side note: blockchain is a boon to the healthcare industry if we can pull the nation’s healthcare backbone software languages into this century.

Coupling the rise of electronic clinical documentation with a litany of reimbursement models has created one of the largest randomized trials on healthcare outcomes in recorded history. Now that Electronic Medical Record Systems abound in the U.S. healthcare system, the network effect and aggregation theory are reducing the asymmetry of effective models for managing populations. These evolutions have prompted employers and health systems to realize the significant power they possess, supply and demand. So, where is all this going?

We are in the herd adoption phases of healthcare organizations recognizing the value of the data that they own. Why else is the rise in data breaches so exponential? While protecting patient information is critical, leveraging that information to administer better and more cost-effective care is still very much in the early adopter phases.

I’ve previously mentioned that some healthcare organizations are aggressively skating towards NPS scores and the consumerization of healthcare. On a micro-level, consumer spending power is aggressively increasing as liablility for costs shifts through High Deductible Health Plans. High Deductible Health Plans. I’ve previously mentioned that some healthcare organizations are aggressively skating towards NPS scores and the consumerization of healthcare. As healthcare provider outcomes data continues to come online through an internet connection near you, consumers’ power over understanding who their healthcare providers are, their track records, and where they get their care grows every day. As these market pressures continue, examination of the overall healthcare experience will only increase.

As an aside, the cost buckets that make-up healthcare delivery will start to encounter literate healthcare consumers, At the top of the list of scrutinized cost buckets should be, The Medical Loss Ratio (MLR). Martin Shkreli is not operating health plans, but to say health insurance organizations could also use a nudge towards humanity would be an understatement. In time, private insurance companies will have no choice but to toe the line on profitability.

The Medicare Advantage model shows promise in operating within those market pressures of consumer preference (demand), services and data (supply). By engaging patient populations, producing quality outcomes, and bending the cost curve, these plans can provide dental care, gym memberships, transportation, human interaction (what a concept), healthy food options, etc. Those social determinants of health neglected for so long are proving magnitudes more impactful on healthspan than actual medical care. Quality experiences and value-added benefits create brand awareness that fosters mindshare. Take Uber and Lyft, for instance; what percentage of people pick up the phone and call a taxi anymore? Are the same folks organizing their entire lives electronically willing to continue sitting in waiting rooms for routine, elective, and care management services? Mindshare people!

Right now, healthcare systems are working directly with employers and consumers, cutting out the middleman, and offerring an uptick in patient experience. However, access to care persists within narrow-network plans. However, the amount of data we have and will continue to gather around this model will allow us to evaluate how these value-oriented architectures stress-test at the local and regional levels—narrow-network. However, the amount of data we have and will continue to gather around this model will allow us to evaluate how these value-oriented architectures stress-test at the local and regional levels.

The United States is built on an idea-meritocratic system of innovation. That’s what sets us apart from the rest of the world. Capitalism works when executed effectively, and what Peter Drucker said is more applicable to healthcare than any other industry; the goal is to be both productive and humane. Medicare Advantage plans are jockeying towards that balance, and health systems are in the catbird seat.