The Payor (R)Evolution

[As seen first on the Unified Patient Information Management Blog]

I had originally titled this piece “A World Without Health Insurance” but figured I’d get fired from my day job if I did that, so enjoy the new title, healthcare fans.

All joking aside, I am writing this piece to have you think about a world where patients and providers are empowered to do what is best for them and the health insurance companies (aka Payors) will need to evolve in order to keep up.

Have I got your attention?

Let’s look at a few facts:

1)  The Patient Protection and Affordable Care Act (PPACA) is adding approximately 32 million formerly uninsured people to the ranks of the insured. Good news for the health insurers, by the way.  Can you imagine if the Feds mandated that we all eat pizza?  Papa Gino’s and other pizza vendors would be pretty happy about that.  Can you also imagine the new Dartmouth Atlas that shows which regions of the country like pepperoni and which prefer mushroom?

I digress. Back to the current state of affairs.

Our healthcare system today already has problems with cost control. And now we’ve added 32 million people to it with little to no education and empowerment.  So this could get interesting. And by interesting I mean bad. As in its Saturday night, I have a headache, and since I have health insurance now I’m going to the ER at a world-class teaching hospital to get it checked out bad.

2)  Doctors aren’t happy with PPACA. Not all, of course, but a good number of them. A Thomson Reuters-HCPlexus National Physicians Survey released earlier this year showed that nearly two-thirds of doctors surveyed felt that PPACA will worsen care.  Not to mention it won’t help the docs financially.

3)  Employers aren’t exactly thrilled with PPACA either. In fact, only 16% were in favor of it according to this article from Employee Benefit News (quoting the 2011 UBA Benefits Opinion Survey). Couple this with double-digit premium increases from their health insurance plan year-over-year and you have some pretty peeved people.

How about you?  Feeling good about our healthcare system and PPACA?  Maybe you are…for the moment.

Let’s play make-believe.  (I love this game).

Above I have painted a real-life picture where two-thirds of doctors do not like PPACA.  Some of them are likely in the later stages of their careers.  Let’s pretend that they choose to retire rather than endure a complete healthcare system overhaul.

Now you have fewer docs.

Oh, and don’t forget, you have 32 million more patients.

Fewer docs + 32 million more patients = longer waits, fewer resources, likely more doctor mistakes.

If you think waiting for your doctor in today’s system is a problem…just wait until PPACA really kicks in.  And if you aren’t advocating for yourself when it comes to healthcare, well I hope it’s on your to-do list in 2011.  Or at the very least before 2014.

So how does all of this tie into this blog post?  Well, the docs aren’t just retiring. They are looking for alternate ways to keep working but without the hassle of PPACA or insurance reimbursements.

Enter telemedicine.

The more I read on this stuff, the more I think we’ll all be seeing docs via live chats in the next few years.  Companies like MD Live Care out of Texas are making it easy for John Q. Public to be seen by a doc almost instantly.  Or at the very least seeing the doc when John Q. wants to see the doc, not when the doc wants to see John Q.

You log in, create an account, tie it to a credit card, schedule an appointment and bang – you see the doc. It likely costs about as much as a co-pay today. Well, a higher co-pay, maybe $30 to $40 or so, but hey – it’s worth it so you don’t have to leave work and sit in a waiting room full of sick people coughing all over you right? (Side note – keeping us out of the germ-infested doctor’s office keeps us healthier. Win Win).

Docs love this.

And it doesn’t hit the insurance company either.

How about the companies that are doing contract surgery work directly with employers?  Have you heard about these yet? A trend known as employer direct healthcare?  If you haven’t yet, you will.  Companies like National Surgery Network are one example.  These companies work with hospitals and large self-funded employers to find the best rates in the market for particular surgeries and procedures.  They negotiate greatly discounted rates for a company’s top cost-driving procedures and surgeries while putting some perks in place so that traveling out of the normal area for the care doesn’t seem too bad. Savings are significant, too. I’ve read upwards of 50% savings for some procedures vs. the traditional model. And that reduces healthcare expenses significantly for employers.

Thus, employers love this.

Once again, it doesn’t hit the insurance company.

Then there are other companies whose goal is to provide more basic medical care without the hassle of insurance.  Companies like White Glove House Call Health who was featured in a previous blog post.  Instead of leaving work to see doctor for a sick visit, you schedule a nurse practitioner to see you where you are.   You pay a small fee, your employer pays a per member per month fee.  Cost avoidance due to reduction in use of insurance, doctor charges and absenteeism = happy patients and employers.

Or how about a company like Healthscape Partners who have created a new business model that benefits both the consumers of healthcare (including employers) as well as the organizations who join the Healthscape Alliance, like two of the companies named above.  Think collaboration, not competition – companies that cover a number of healthcare related verticals benefit from shared business development activities to help reach clients they might not have normally reached.  Wow.  If this type of collaboration for the betterment of healthcare is a sign of the future, sign me up now.

Last but not least, there’s the creation of state exchanges to offer health insurance bound by common rules around pricing and offerings which promotes pricing and consumer choice.  Not to mention portability of insurance despite job change and more consumer information.

Seeing a trend here?

What do you think?  Lower costs? Seeing the doctor quickly will minimal hassle?  Little to no insurance involvement?  And when there is insurance involvement, there’s choice and competition involved? Are you loving this?

So, Mr. Insurance Company…how are you going to evolve to continue to be a player in this ever-changing healthcare field?

Perhaps I’m unfairly singling out the insurers here.  Nah, not perhaps.  I am.

But guess what – they’re worried. And they should be.  The world as they know it is changing rapidly around them.  I recently heard a story from a colleague about a health insurance worker saying that they are wondering if they (the insurance company) will still be around in 5 years.  Yikes.

Before you write them off – don’t.  Disruptive technologies have a way of bringing out the best in people and companies.  And folks aren’t giving up on the system that is in place today.  This system can still work, it just needs a kick in the behind. And the other players in the system are working with the payors to make it happen.

Look at all of those electronic medical records vendors creating solutions using meaningful use standards to assure health IT is as functional as can be, or as Janice McCallum puts it: “Data that can do stuff.”

Companies like NaviNet, the company that created a real-time communications platform that links the major players in health care: providers, health plans and other industry partners, is one example. Their platform for unified patient information management (UPIM) turns data into meaningful information for payors.  Their EMR, practice management and e-prescribing solutions for providers make it easier for docs to deliver high- quality connected care.

Heck, even the feds are in on the fun by pushing for the creation of Accountable Care Organizations to drive quality outcomes and a better, more coordinated patient experience. How’s this for “Nah, the old system ain’t working very well. Whatdaya say we push aside the old fee-for-service payment system and trying something different”?

That’s some pretty cool stuff, no?

Now…put it all together.

Will it work?  Some would say that it is already working. Others will say that it’s too early to tell.  And still some naysayers believe it will fail.

But like I said – disruptive technologies have a way of bringing out the best in people and companies.  Payors will need to evolve as will each of the players in the healthcare system…because revolution isn’t really an option.

And I think the best is yet to come.