Why it's VERY HARD for businesses to SIMPLIFY healthcare?

May 30, 2020


People with chronic illnesses and mental health conditions account for 90% of the country’s $3.5 trillion in annual medical spending, according to the Centers for Disease Control and Prevention. So better management of chronic ailments can result in substantial savings, but the incentives have to match up for both patients and providers.

The Health Transformation Alliance was formed in 2016 and includes 54 employers including American Express, IBM, and Macy’s, which among them pay for coverage of 4.5 million people in the U.S. The group is creating a marketplace of health programs for its members to use. One example: Livongo Health, which uses smart devices to monitor patients with chronic conditions, has been selected to help employees manage diabetes and weight loss. The alliance has saved members $700 million in drug spending, CEO Rob Andrews says, and is working to match patients to providers with the best outcomes. “Our biggest problem is a tug of war over data ownership,” he says. “If you can’t aggregate the data, how do you measure any of this?”

When Amazon, Berkshire Hathaway, and JPMorgan Chase announced the formation of Haven Healthcare in January 2018 to stem the rise of employer health-care spending, the world expected big results. The mere prospect of Jeff Bezos, Warren Buffett, and Jamie Dimon joining forces so worried investors that the shares of established health insurers and pharmacy benefits managers tumbled on the news. A little more than two years later, those concerns feel like a distant memory. Rather than disrupting health care, Haven finds itself in disarray, with its top two executives departing in the past year and the venture giving few clues as to how it’s going to slow the upward march of health costs in America.

On May 13, Chief Executive Officer Atul Gawande, a surgeon, Harvard professor, and high-profile expert in the field, resigned abruptly after less than two years in the role to instead become the venture’s chairman and devote his time to efforts related to the Covid-19 pandemic. Haven has so far said little about what it’s going to do next as it searches for a new leader, fueling doubts that the venture is anywhere close to having the kind of radical plan to transform the delivery of care that it promised at its inception.

Health consultants agree that to wring costs out of the system, employer plans need to ensure that doctors are being financially rewarded to lower spending. This can be done through a technique called “capitation,” in which physicians accept a set payment for managing a patient’s care and can even get bonuses for keeping medical costs down.

Another way is by pointing patients to the best-performing doctors in a given specialty to ensure better results. This isn’t easy for large, national employers to do across the country, given the amount of work it takes to identify high-performing medical groups in local markets.

The Covid-19 crisis and the potential economic fallout from a slow recovery only put more pressure on many small to mid-size employers to rein in spending for employee's health and wellness. It going to be interesting to see how businesses will be challenged to build back their businesses and their employee's health and wellness at same time given post-COVID-19 slow start to reopen their businesses.

Read Full Article by Cynthia Koons at Bloomberg Quint 
HOMECARE2GO<sup>®</sup> Media Team


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