Big Business to Health Care Industry: Shake It Up and Cut Costs

By Theresa Hush

Big Business has a new message for Health Care: Providers have run out the clock to fix inefficiencies. You need business solutions to shake the status quo and reduce costs.

Three recent announcements clarify that intent: Amazon, Berkshire Hathaway, and JP Morgan Chase’s joint venture to control health care costs; the merger of pharmacy-clinic CVS Health with insurance giant Aetna; and development of a consumer Apple Health Records app for iPhones.

The health care industry’s response? A hushed “many have tried and failed” view of the supposed naïveté of business entering the health care costs battle. But believing Big Business has no expertise to offer is a risky miscalculation.

By any measure, provider health systems have not been able to control health care costs. In the last decade, they’ve been feverishly pursuing acquisitions and mergers. Providers justify the expansion as an investment in technology and other infrastructure for Value-Based Health Care. But these mergers haven’t helped control costs; witness prices paid by employers, consumers and patients. In fact, the reverse is true. Failure to produce savings has cost credibility for Big Business, which has been paying most of the tab.

How Big Business Efforts Make a Difference

Amazon, JP Morgan Chase and Berkshire Hathaway are three giant companies, but all have a strong consumer focus and consumer-directed infrastructure. While details about their new health care company are still unclear, Warren Buffett of Berkshire Hathaway promises  they are aiming to stop runaway costs, beginning with their own employees. But, he said, they won’t stop there.

CVS’s purchase of Aetna is interesting because CVS’s growing community-based clinic operations are gaining share in community-based primary care. As health care organizations have ballooned, CVS has created, by contrast, a neighborhood care model. Also, CVS and Aetna can connect consumers to their data and provide care alternatives that deliver value.

These business-subsidized neighborhood clinics create price competition for basic services, like flu shots, that used to bring patients to physicians, and build a foundation for other services, once part of a primary care relationship.  They’re also more convenient. Consumers, frustrated for years that they can’t schedule physician visits online, can do so at Minute Clinic.

Can Apple’s Health Record impact health care decisions by patients? It just might. Apple’s data integration relies on a platform of EMR data contributed by health care systems, placed in consumers’ palms via their phones—a game changer in the movement to help patients monitor health status and make treatment choices.

As these tools improve, we may easily evaluate our diets, exercise and other activities, as well as use this window to convey personal data to practitioners, facilitate specialized care or create data for precision medicine. This technology can also create the “home” for patients to integrate multiple provider records. Apple is demonstrating that consumers want access to health care data and are willing to use it to improve their health status.

Five Lessons For Providers From Big Business

Health care systems should carefully consider what Big Business is signaling:

1. No more time for minimum effort and pilots to improve health care cost performance.

1. Price, convenience and customer service are still key to attract patients.

1. Patient decisions will define the future of cost control, because providers have not been able to (yet). Offer services to lower costs via price transparency, quality data and decision support for patients.

1. Consumers want access to their health care data and are willing to use it to improve their choices.

1. The most important tools for providers to develop: streamlined, on-demand health care services and support for health care decisions.

The health care system must change. The only question is who will be on the leadership team. It could be business, or health care providers—or a combination. How fast providers can develop their own organizations to be customer-focused—toward the patient and prospective patient—will determine their place in the industry.

Theresa Hush is the CEO and Co-Founder of Roji Health Intelligence. As an expert at creating consensus for desired change through education and collaboration, Terry helps organizations take actions that will direct their future through meaningful technology and programs.