10 Ideas for Energizing American Healthcare
Don’t give up hope for an efficient health system. Here’s how to make care cheaper, safer, and faster.
1 OFFER FEWER CHOICES
Whether it’s in the grocery store or the car showroom, shoppers like a bevy of choices. But having more options when it comes to picking a health insurance plan might not be a good thing. Keith Marzilli Ericson, an associate professor of markets, public policy, and law, has found that while multiple insurers offering the same plan can force prices down, having lots of different plans—with a myriad of price tags and deductibles—does not.
With Justin Sydnor of the University of Wisconsin, Ericson created simulations to mimic the impact of more plan options on the insurance market. They found that markets could quickly become destabilized as healthy people flocked to low-cost, high-deductible plans. As a result, premiums for those looking for a low deductible rocketed. The only thing that kept the markets somewhat balanced was the fact that plenty of people ended up with plans that didn’t suit their needs: healthy people paying top dollar for low deductibles that they probably wouldn’t need, for example. When choice came into the market, the sick and uninformed were hit especially hard.
“It’s very difficult to forecast your own health needs,” says Ericson. “There’s a lot of uncertainty and just a lot of work to translate what you know about yourself into what insurance plan will be best for you.”
Ericson recommends that employers think twice before expanding the range of insurance plans they offer. He also says that using risk-adjustment software can help keep premiums relatively stable by ensuring that money flows from plans full of healthy people to those with sicker people.
2 THINK LIKE AMAZON
When you shop on Amazon.com, the site is ready for you, offering suggestions tailored to your interests and buying history. It’s a level of personalization that the healthcare industry has yet to adopt. Try consulting a specialist in a different network, heaven forbid another state, and it’ll probably take untold forms and faxes to get your notes to travel with you. If you had a test, you’ll probably need to do it again.
“Only in healthcare do we have highly compartmentalized information systems and non-customer-controlled information,” says Jonathan Woodson, Larz Anderson Professor in Management and director of the Questrom-based Institute for Health System Innovation & Policy. Woodson advocates “personal, longitudinal health records; digital data that can be shared at the discretion of the individual” rather than the provider. If someone is diagnosed with a condition, their genetic data, biomarkers, proteomics, and other health information would go into a record they control; wherever life takes them, the data follow. Add machine learning and artificial intelligence, says Woodson, and the system “will give the provider an ability to select the information that is most relevant to rendering an opinion.”
Allen Questrom Professor and Dean Kenneth W. Freeman agrees such advances could have a major impact, particularly when it comes to virtual doctor-patient interactions. “Enabling patients to take charge of their own health, maintain their own health information, and seek reliable answers from medical practitioners in real time will improve health outcomes and reduce costs,” says Freeman, the former chair and CEO of Quest Diagnostics.
The technology is already there, says Woodson, but someone needs to develop “a business proposition to make it profitable,” promote “different regulations that require sharing of information,” and prove the system will remain secure. It’s work the institute he leads is taking on, building a team that includes computer science, public health, medical, and business experts to help healthcare catch up with the rest of the digital world.
3 Use Cancer-Fighting Computers
Artificial intelligence can detect home intruders, make smart trades on the stock market, and pilot cars. Why can’t it help treat illness, too? By automating laborious tasks, like sifting through research findings in medical journals, AI can allow doctors “to spend more time on the parts of their job where they bring the greatest value, such as understanding a patient’s emotional well-being or other attributes not quantified or captured on standard medical charts,” writes Venkat Venkatraman, David J. McGrath Jr. Professor in Management, in The Digital Matrix: New Rules for Business Transformation Through Technology (LifeTree Media, 2017). He points to IBM’s Watson for Oncology as one example.
The cognitive computing platform, developed with Memorial Sloan Kettering Cancer Center, analyzes a patient’s medical record and then sifts through hundreds of medical journals and textbooks, along with other sources, to evaluate and rank new and existing treatment options. It’s becoming the virtual sidekick for oncologists in institutions and networks around the world.
In a study at Manipal Comprehensive Cancer Center in Bangalore, India, Watson concurred with a board of experts about treatment recommendations in roughly 96 percent of lung cancer cases and 93 percent of rectal cancer cases. In another study, oncologists in Mexico said they found the technology especially helpful in clinics that lacked subspecialist expertise.
4 GO EASY ON Medicaid
With an annual bill of $565.5 billion, Medicaid is firmly in the sights of cost-cutting congressional Republicans. But, according to Tal Gross, an assistant professor of markets, public policy, and law, the program buys more than doctor visits—it benefits the wider economy, too. “Medicaid, and health insurance more broadly, doesn’t just provide health or improve access to healthcare providers,” he says. “It also provides people with a financial stability they otherwise wouldn’t have.”
In a study published in Health Affairs in October 2017, Gross and his coauthors examined the relationship between payday loans, a type of high-interest borrowing often used by low- and middle-income Americans, and California’s early Medicaid expansion under the Affordable Care Act. “We found a pretty big drop in monthly payday borrowing—11 percent—roughly six months after counties expanded Medicaid,” says Gross.
These results support previous research on healthcare’s financial benefits. “You see people less likely to declare bankruptcy and less likely to default on their credit cards and max out their credit cards. Lenders actually benefit to some extent from Medicaid expansions.” So do hospitals. Gross’ research shows local hospitals pay an annual average of $800 for each uninsured person.
Washington analysts don’t typically factor these financial benefits into their assessments of healthcare policy, says Gross. But they already have the tools to do the job. “In November, Republicans in Washington proposed tax cuts and argued that one needs to judge tax cuts with what is called ‘dynamic scoring.’ The basic idea is that you need to adjust your estimate of the cost of the tax cuts with the increase in revenue that (might) arise because lower taxes will encourage investment. I’d like to see that same type of rigorous analysis applied to thinking about government spending.”
5 Stop the Death of Antibiotics
“Antibiotics are part of the infrastructure for our healthcare system,” says Kevin Outterson, a professor at BU’s School of Law. The problem is, that infrastructure is crumbling.
We depend on antibiotics to fight bacterial infections and illnesses, from strep throat to cancer. “Almost everything in modern medicine relies on antibiotics as a safety net,” Outterson says, and the more we use antibiotics, the more bacteria builds up resistance to them. When antibiotics no longer work, even routine procedures like hip replacements can become deadly. Approximately 700,000 people already die each year from drug-resistant infections, according to the Guardian; without action, that number could reach 10 million by 2050. The obvious solution is to develop more antibiotics—but the reward for innovation runs counter to developing most other products in our economy. We want to use new antibiotics as infrequently as possible to maintain their effectiveness, so why would companies innovate if they don’t stand to make a profit?
Outterson is bringing together experts in public health, economics, education, and law, among other disciplines, to advance the development of new antibiotics, vaccines, and rapid diagnostics. He’s the executive director of Combating Antibiotic Resistant Bacteria Biopharmaceutical Accelerator (CARB-X), a $455 million global, public-private partnership based at BU. In 2018, CARB-X and the Institute for Health System Innovation & Policy founded the University’s Social Innovation on Drug Resistance postdoctoral fellowship program to better understand how people have contributed to the rise of drug-resistant microbes. “Resistance is exactly the sort of problem that is too complicated, too interdisciplinary, to be solved by anyone other than academic researchers working together in universities,” says Outterson.
6 make pricing transparent
In 2016, the United States spent over 17 percent of its GDP on healthcare goods and services—far more than any of its peer countries. “The cost is unsustainable; it’s growing much faster than the economy,” says Mark Allan (MBA’93), executive director of BU’s Institute for Health System Innovation & Policy. The biggest culprit, he says, is a lack of transparent pricing for treatment and medicines. The rates negotiated between insurance companies and providers or pharmaceutical companies are confidential, “so there’s no way to have real competition.”
The government has little incentive to step in, says Allan, who is also a senior lecturer of markets, public policy, and law. “Pharma is the most profitable industry in the country and makes incredible amounts of political donations, and increasing competition will decrease profit margins.” He believes the push for change will come from tech giants and digital entrepreneurs—like Amazon, Google, and Apple—that make artificial intelligence and health-monitoring technologies. Once they have price data, says Allan, it wouldn’t be much of a leap for them to build services that “recommend providers based on geography, cost, and quality.”
The healthcare industry will fight price transparency, Allan says. “Every cost is someone’s revenue,” and some companies will go out of business in a competitive market. But the public will benefit. Not only will competition drive down prices, says Allan, but it will spark quicker development in the industry and ensure the survival of companies that offer consumers the most value.
7 Add More Red Tape
The annual cost of unnecessary medical tests and treatments in the United States has been put at anywhere from $200 billion to $800 billion, according to healthcare think tank the Lown Institute. It’s a problem, but cutting back on tests could endanger patients’ health and leave doctors liable if something’s missed. It would also mean fewer reimbursements for doctors.
A solution might lie in adding some well-placed red tape.
Two researchers in Questrom’s operations and technology management department studied what would happen if doctors were forced to justify a common test. They looked at data from two emergency departments: in one, doctors requesting an ultrasound for patients experiencing abdominal pain had to rationalize the test to a radiologist; in the other, they could just book the test with no oversight.
Assistant Professor Jillian Berry Jaeker and Associate Professor Anita Tucker found that when doctors had to pause and reflect, they ordered fewer tests. In fact, in the department that didn’t require oversight, doctors ordered twice as many tests. They concluded that fewer tests improved efficiency—patients could be seen at a faster rate—and saved money, and they also found that cutting back on tests had no apparent impact on the quality of care: patients who skipped the ultrasound were no more or less likely to land back in the emergency room within a week. It might be impractical to have doctors and radiologists chat before every scan, but Berry Jaeker thinks that something as simple as adding an explanation box to a chart may have the same impact. “Requiring a justification doesn’t have to feel extremely burdensome, but if it is a small burden, it could actually improve the whole system.”
8 Put the providers at risk
Our system for incentivizing medical providers is backward, says Eugene Hill (MBA’80), chair of SV Health Investors, a leading venture capital and growth equity firm. “We pay per procedure on a fee-for-service basis, and we don’t provide any incentive for the patient to be well managed. We wait until patients get really sick, and then we keep paying providers to treat really sick people,” Hill says. “That is a very costly and inefficient way of compensating the providers.” For example, when someone with diabetes lacks the support they need, they end up in the hospital with renal failure that requires expensive dialysis. “In a perverse way, the provider does better if the patient does worse.”
We need to flip that equation to “put the providers at risk” and align their financial incentives with keeping patients healthy, Hill says. For that person with diabetes, the government or private insurer should estimate the total annual cost of care if the disease were well managed to determine a reference price for keeping that patient healthy. Hill suggests that the payer—whether it’s Medicaid or an insurance company—should pay that fixed amount of money to the provider. “If we were to take a pot of money and compensate the providers to keep the patient compliant and well, that would be a far more efficient and far better alignment of incentives with the providers to render value care.”
The mandate for this change needs to come from the government, employers, and especially consumers, Hill says. “If a consumer is spending so much of their resources on healthcare and getting so little value for it, the consumer is going to demand reform.”
9 reboot the entire system
In the past, voters would probably have given the boot to a politician advocating for single-payer healthcare. Not anymore. A 2017 Harvard-Harris Poll found that a majority of Americans (though only a minority of Republicans) would back a government-controlled, tax-funded system.
Jonathan Woodson, former assistant secretary of defense for health affairs in the US Department of Defense, thinks he and his fellow policy experts have a responsibility to help shutter the for-profit insurance market.
“In terms of the policy realm,” he says, “we’ve really got to advocate for, and make people understand the benefits of, a single-payer system—or moving to, at least, a nonprofit private insurance market….The current model is not working. We’re spending $3 trillion on healthcare with outcomes that are far below other economically developed countries.”
With businesses pumping more and more cash into supporting employee health plans, says Woodson, “we are sapping reinvestment capital out of companies and making us less competitive on a world market.” Thousands of Americans declare bankruptcy every year in the face of daunting medical bills. It is, Woodson says, unsustainable. But acting before the healthcare system flatlines will mean confronting its intricacies head-on rather than developing niche solutions. “What we need to do is rethink the entire system,” says Woodson. He predicts that if lawmakers don’t act, a crisis will force change. “The issue is, how painful will it be before it does?”
10 Automate Mental Health Care
The United States is one of the few advanced nations in the world that does not have a standardized system for tracking the progress of patients dealing with mental illness, says Jayakanth Srinivasan, a research associate professor of information systems. When providers do collect this data, most still rely on paper surveys. “That’s a significant cognitive and time burden on the provider to do something that should be done automatically,” says Srinivasan, a fellow at BU’s Institute for Health System Innovation & Policy. Even when they go to all that effort, the completed survey may just gather dust: Srinivasan says providers don’t always have the time to review patients’ previous responses. That makes it hard for them to develop care tailored to the needs of individuals.
He suggests switching to a computerized tracking system, like one the US Army developed with his guidance. The system follows the progress of soldiers with PTSD; now, a soldier completes an electronic survey on a tablet, ranking their well-being in areas such as anxiety, depression, and alcohol use. Those scores are then charted against all previous data in a “single snapshot that’s easy to understand,” Srinivasan says.
With that data in hand, the provider has more time to spend with patients and “can maximize their effort” during sessions “to provide much more detailed, richly informed care plans.”
Srinivasan thinks the system has potential beyond the treatment of mental illness, and could help providers develop a holistic care plan targeted to each patient. “Maintaining good cognitive function is integral” to overall health, he says.