The majority of employers (and employees) agree that health care inflation and and subsequent cost shifting in employee benefits is unsustainable. You may have heard the stats: Health care accounts for almost 18 percent of the U.S. gross domestic product (GDP), and one-third of all spending is wasteful spending from an inefficient system.
David Blumenthal, executive director of the nonprofit Commonwealth Fund, made an interesting analogy when he stated, "If the health care system were to break off from the United States and become its own economy, it would be the fifth largest in the world. It would be bigger than the United Kingdom or France and only behind the United States, China, Japan and Germany."
At first, that stat might sound dreadful; however, that also means there is a huge opportunity to revolutionize the industry by turning these challenges into opportunities and strengths. We cannot afford an evolution from the past, but must truly transform the industry through revolutionary innovation and value. Think about the impact that companies like Amazon, Netflix, and Apple have had on their respective industries. These companies created disruptive innovation that disintermediated many competitors who were stuck trying to evolve from past precedent (have you been to a Blockbuster video store lately?).
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Innovation is defined as addressing a challenge, problem or unmet need with something new that adds value. The health care industry is full of challenges and unmet needs that need value based solutions. To clarify, value is the intersection of outcomes divided by cost, not price.
Now is the time to create a transformational revolution in health care, that will deliver innovation and value to all stakeholders. Specifically, we must focus on the two most important stakeholders: the doctor and the patient. So, 21st century healthcare analytics will enable the doctor and patient to:
- Understand what is going on;
- Determine the appropriate action; and
- Provide incentives to take that action.
As simple as that may sound, the majority of wasteful spending in health care is due to a breakdown in one of the three steps above. These failures are unintentional and a result of a broken industry with fragmented data and misaligned incentives.
However, a revolutionary opportunity exists to provide better care, with lower cost, and improved patient satisfaction — the triple aim! To accomplish this goal, I am going to identify four challenges that must be turned into strengths:
- Curbing chronic disease
- Paying for outcomes and value
- Leveraging mobile health technology
- Activating the consumer
Over the summer, I am going to provide a comprehensive overview and integrated solution to these challenges. There will be significant economic advantages to employers and employees who invest in these opportunities.
Next month, I will focus on chronic disease and paying for value, followed by mobile health and activating the consumer. I hope you will join me on this revolutionary opportunity.
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