The Collaborative Forum

President Obama has made healthcare – and rising healthcare costs – a national priority, and it’s easy to see why.  As a country, we spend 2 Trillion dollars a year on healthcare, yet one in two Americans, or close to 200 Million of us, suffer from chronic diseases that decrease quality of life and increase healthcare costs. 

Chronic disease is a problem that many physicians see daily in their clinical practices…I sure did.  It is one that causes countless unnecessary and avoidable hospitalizations.  This problem largely reflects a lack of simple coordination of information and care processes, as well as a lack of programs and approaches for patients with chronic disease to become more involved in their daily self-care.

Unfortunately, the burden of chronic disease falls largely to the elderly and vulnerable, in other words, Medicare and Medicaid beneficiaries.  As an example, if you are a Medicare beneficiary with congestive heart failure, you and your peers consume 40% of the Medicare annual budget.  A short list of chronic conditions account for 95% of Medicare expenditures, and over 80% of Medicaid costs.  It is a small wonder that the Medicare Trust Fund is predicted to be insolvent by 2018!

So…how can healthcare reform properly focus on achieving the biggest bang for the buck?  (In other words, move to the Value Quadrant). My sense is that we need to start the discussion by recognizing where the money on healthcare is being spent.  No, not thinking in terms of location or services, but in terms of population types and medical conditions.  To borrow from a former health reformer…It’s the Chronic Disease, Stupid!  Simply put, without a focus on reengineering our healthcare delivery system from an “acute care model” to a “Chronic Care Model,” Medicare, Medicaid, and the taxpayer are all doomed.

But current discussions of health delivery reform largely lack this focus.  Take for example the Accountable Care Organization model. Yes, Mayo Clinic delivers great care, but have you looked at the hospitalization rates and readmission rates at Mayo for chronic conditions like CHF?  Their performance is mediocre at best.  Why?  Because in spite of being an integrated system, in America, you get what you pay for.  Since we pay more for hospitalizations than for outpatient care coordination (which today we don’t pay for at all), people with chronic diseases end up in the hospital. 

Health reform, like any attempt to change a complex system, will be accomplished only with focus.  I’m not sure current legislative efforts to find “cost savings” have even begun to think through the opportunities and amount of potential cost savings if healthcare reform focused on reengineering the care delivery process (and payment) for populations with chronic disease.  One reason that I hear on the Hill for this lack of clarity is that large Medicare demonstrations and the published literature fail to point a way to cost savings for chronic care interventions.  They argue that prevention does not pay for itself, and that well done studies have failed to show consistent benefit from such interventions as case and care management.

I think that may be because we aren’t looking into the Value Quadrant of Healthcare Reform. The Value Quadrant is where chronic disease interventions leverage technologies instead of heavily relying on human resources, and where care is coordinated WITHIN the provider-patient relationship, rather than organized around payers.

In subsequent posts, we’ll explore the other quadrants, and how we move from where healthcare is today: largely human resource intensive interventions organized by healthplans, to one that is efficient, scalable, and delivered within existing clinical relationships.  Read more in our position paper, “The Value Quadrant of Healthcare Reform – Technology Enabled Chronic Care Management.”

Tags: Care coordination, Care management, Healthcare delivery system, Healthcare reform, Medicaid, Medicare, The Value Quadrant of Healthcare Reform