In my last article, I talked about how the unsustainability in health care inflation must be addressed with transformational thinking. What we truly need is revolutionary thinking. A revolution in the health care industry is the only way to bend the trend, improve health and create a competitive advantage for employers who embrace it. To accomplish this goal, these four challenges must be turned into strengths:

• Curbing chronic disease

• Paying for outcomes and value

• Leveraging mobile health technology

• Activating the consumer

In this post, I am focusing on curbing chronic disease and paying for outcomes and value. Check back for the final part of the series on leveraging mobile health technology and activating the consumer.

Curbing chronic diseases

Chronic diseases, such as heart disease, stroke, cancer, type 2 diabetes, obesity and arthritis, are the leading cause of death and disability in the United States. According to the CDC, cancer and heart disease alone account for 48 percent of all adult deaths in the United States. Seventy five percent of all health care spending is tied to chronic disease and this is just the tip of the cost iceberg. Workers’ compensation costs are two times greater for someone with one or more chronic diseases, and employers suffer additional burdens from lost productivity and absenteeism. However, the good news is that 50 percent of all chronic disease is preventable or reversible based on lifestyle decisions (diet, exercise, smoking, stress and sleep). The definition of “chronic” implies long lasting, recurring and difficult to eradicate. Thus, these diseases must be cured with a longer term view of behavior modification and prevention.

Paying for outcomes

Unfortunately, the majority of financial payments to health care professionals today are based on a short-term, fee-for-service reimbursement model. With only 25 percent of health care spending based on acute (i.e . one-time, short-term) events, we must evolve payment reform to reward a longer term and holistic view of health and health improvement. In a value-based reimbursement model, health care professionals will be rewarded or penalized for their success (or failure) to deliver certain agreed upon health outcomes. The concept of value over volume, or outcome equals income, is a transformational shift for both insurance companies and health care professionals.

Value-based networks

While some of these new partnerships are referred to as “narrow networks,” I would encourage you to dig deeper and confirm if these smaller groups of health care professionals are aligning more closely with the insurance company and receiving reimbursements tied to health outcomes. If so, I would argue these networks are “high performing” or “value -based” as opposed to just “narrow.” In a truly aligned health care delivery model, preventive care will skyrocket. Preventive screenings enable early detection and prevention of disease to happen sooner and more often. We can reward health care professionals for keeping people healthy and productive, as opposed to only paying them once a patient is sick and in their office. This model rewards improved health, rather than asking employers and employees to spend more of their income on sickness each year. I would encourage all employers to measure their chronic condition population today and understand how health care professionals and insurance companies in your community are working together to create these value-based partnerships.

When employers, employees (aka, patients), insurance carriers and health care professionals create a greater degree of alignment, share data and focus on value and outcomes, the result will be improved health, lower cost, and higher patient satisfaction — the triple aim!

I look forward to sharing the third and final installment of this series with you next month. Be well!