Let me embrace thee, sour adversity, for wise men say it is the wisest course.
Henry VI – Part 3, Act III, Scene I
Roy Smythe–(Forbes)–Shakespeare’s play Henry VI chronicles the turbulent events leading up to the fall of the House of Lancaster in the latter stages of the War of the Roses in England.
The hand of time did not exactly caress Henry in the years leading up to this particular scene – when he utters these words he has been deposed for a second time and is en route to an ignominious death in the Tower of London. He has also suffered a bout of insanity, been terminally separated from his wife, and his only son brutally killed. What Shakespeare, perhaps implausibly considering the foregoing events, projects through the Lancaster king is that there is much someone can learn from adversity. He implies that to fully benefit, a difficult challenge must actually be embraced.
Perhaps one of the more difficult challenges to embrace, if you are in business, is losing money – Warren Buffett suggests that you in fact shouldn’t, once stating, “Rule No. 1: Never lose money, Rule No. 2: Never forget rule No.1”.
However, the business of health care delivery is doing just that – losing potential revenue and being progressively demonetized by technology. Even though I am obviously running the very real risk of disagreeing with an oracle (the one from Omaha), I think that health care delivery systems should actually embrace that fact.
I recently discussed this dilemma with Peter Anderson, the Chief Strategy Officer for Sutter Health – Sutter supplies comprehensive care for patients in more than 100 communities in Northern California, and is viewed as a forward-thinking system that embraces both new models of care and new technologies to improve delivery. Paradoxically; however, health systems at the leading edge are the first to admit to these challenges.
“More than 1 million people are using our Sutter Health online patient portal, and they generate 3-4 emails per physician each day,” Anderson relates. “Some portion of these emails would have been in person transactions for the health system, but not anymore.”
He is referring to the fact that what in the recent past required a billable, physical visit to a physician can now be achieved with a few keystrokes. Patients may receive advice, doctors may generate prescriptions, etc., on the basis of a quick email exchange. In addition, the access patients now have to medical information online may at times supplant the need for any keystrokes whatsoever – beyond those that get you onto the WebMD, or Mayo Clinic websites. Whether currently embraced or not, the days of “pay at the front desk on your way out” for less complex problems are likely to be a thing of the past relatively soon.
Anderson also extends the argument beyond the billable doctor visit – “lab tests in the future will be home-based, and this will be both more convenient, and much cheaper than the current model”.
Laboratory testing has classically been a large revenue driver for health systems, but this opportunity is also under real threat. Theranos – the “nanotest” platform created by founder Elizabeth Holmes has created a technology that can run multiple tests on a single drop of blood, and with machinery less difficult to operate. This will likely allow retail establishments such as pharmacies to offer these tests at a fraction of the space and cost. If these lab tests are performed outside the health care system, it obviously does not capture the associated revenue.
Although Theranos is impressive, there are other advances that could be even more of a game changer. Diagnostics for All is a Boston-based company that has developed paper-based tests. These allow a user to place a drop of blood on a piece of paper and determine whether, for example, liver function is normal, or abnormal by a simple color change. Similar paper-based tests exist to test the blood count (hemoglobin), immune function, gene expression, infection, and many other conditions. As it turns out, a lot of medical decision-making involves dichotomous, “yes vs. no” questions that these sorts of platforms can answer. Is this patient’s blood count high or low? Is this patients liver function normal or abnormal? It’s not controversial to suggest that most can interpret “yes vs. no” without the assistance of an expert, with simple rules to follow for the next step – especially if the next step for a normal test is “you don’t need to see the doctor”.
There are other examples of how the traditional model of health care delivery is being demonetized. The problem, of course, for health systems is that demonetizing technologies that allow the patient to receive care in a more convenient and less expensive manner, and to self-manage the more simple aspects of their care are what most people want.
As Anderson adds, “I’m not sure that this will make sense for a number of years,” he said, “but the idea that people will have more tools to take more responsibility for themselves and their bodies is a compelling concept – one that we should welcome.”
Those systems of care that embrace these changes, despite the obvious paradox of less revenue in the short term, will likely be the most advantaged over time. They will creatively leverage these inescapable escalating realities – new technologies, the democratization of information, and different expectations – into new opportunities. For this to happen; however, the move from what is still largely a fee-for-service model (payment to health care providers for interventions), to one that is based on value (payment for clinical outcomes) may need to accelerate. I hasten to add that good clinical outcomes are also what people want – they don’t care so much about the amount of revenue a health system generates, or how.
A few moments after uttering the words above, Henry VI, who is wandering incognito in a forest in northern England, is beset upon the men that will capture him and deliver him to his ultimate fate. They ask him who he is, and he replies – “more than I seem, and less than I was born to”.
The revenue that provider organizations and health systems generate from the classic care model will continue to diminish, to something less than that it was ”born to” realize. However, if they creatively embrace the new reality, the systems of care that our children inherit will not be viewed as deposed leaders – like Shakespeare’s Lancaster king – but as partners that understand what the populations they serve both want, and need. If they are able to do so, they will undoubtedly become “much more than they seem” to us now.
Dr. Roy Smythe is a Forbes contributor and the Chief Medical Officer for Valence Health, a Chicago-based health care consulting, services and operating company that seeks to facilitate the ability of providers of care to manage medical and financial risk.