Can CEOs help fix healthcare?

Two of the authors of "The Innovator's Prescription," Clayton Christensen and Jason Hwang, wrote a recent article in Wall Street Journal titled "How CEOs Can Help Fix Health Care" they put forth the proposition that American companies can turn high healthcare costs from a weakness into a strength. But they start with an admission that "High health care costs are one reason many of America's once-venerable corporations – like General Motors and Chrysler -- are struggling to compete globally." They go on to say:

Foreign firms rely on their governments to shoulder the burden of providing health care to employees; in the U.S., tough decisions about funding and managing healthcare has always fallen upon business leaders. However, rather than simply being a historical and cultural burden, this responsibility also creates the opportunity for remarkable innovation.

The idea makes some sense in a theoretical way, but to pursue the innovative opportunities the business would first have to be enabled to handle the current burden of providing health insurance. The article makes three basic recommendations:

We recommend executives make one or more of three innovative changes: 1) encourage employees to use nurse-staffed in-store health clinics for common ailments, 2) partner with integrated health systems like Kaiser Permanente, and 3) set up company-run clinics at corporate offices and plants.

Not all of these options are viable alternatives for most businesses, and some would find it hard to implement any of them. However, those businesses that can move towards these steps would be wise to take their advice or possibly suffer the fate of the auto industry. Healthcare reform is going to take innovation and cooperation from both the public and private sector, and corporations can not wait for Congress to address the crushing costs.

Lawrence H. Stiffman, Ph.D, MPH makes a case for Retail Clinics 2.o and promotes the idea that Retail clinics 2.0 could fulfill Public Health Service disease prevention mandates and guidance, partnering with manufacturers, PHRs like Google Health and Microsoft HealthVault, visiting nurses and local health departments, and schools to establish a new paradigm for a medical home model.

Christensen and Hwang say:

Retail clinics are basic health clinics staffed by nurses and located inside pharmacies and stores such as Wal-Mart, CVS and Walgreens. There are about 1,000 such sites in 37 states, according to a September 2008 article in the journal Health Affairs. Nurses deliver routine medical care for common ailments like a sore throat or ear infection. A typical visit costs one-third less than an urgent care clinic visit and three-quarters less than a visit to an emergency department, according to another article in Health Affairs that analyzed the costs to the insurance carrier.

Ninety percent of retail clinic visits are for 10 common complaints that constitute 18% of all visits to primary care doctors and 12% of visits to emergency rooms. So, the more employees visit retail clinics for these common problems, the more money companies will save.

Plus, retail clinics would help reduce the absenteeism related to the time it normally takes to schedule an appointment, see a doctor and fill a prescription. Retail clinics have made convenience a key part of their sales pitch by offering walk-in, no-wait visits in places where people already shop.

William Hazel, MD, a member of the American Medical Association's Board of Trustees, said retail-based clinics can "play a positive role if done properly, but they are not a substitute for a regular medical home," a term which describes the relationship built between a primary health care provider and her or his patients to help ensure all of the medical needs of patients are met.

The hard part is creating and staffing these new retail clinics (as well as the reaction from entrenched interests who might believe that this is an intrusion on their territory). The retail clinic trend is important in a nation with up to 40 million uninsured, any of whom could end up in an emergency room because without insurance or a "medical home," a simple sore throat turns into a costly hospital visit. Going to the local drugstore or other retail clinic to be diagnosed and treated for a sore throat or aching ear could become a typical healthcare scenario and would certainly be a disruptive innovation.

The article also delves into the thorny issue of fee-for-service reimbursement. Although pay-for-performance is already gaining more widespread use, the effects of this incentive system on physician response and healthcare outcomes are still unclear. What types of financial incentive strategies work best is also still undetermined. But I agree with the authors that the fee-for-service reimbursement system is not sustainable:

Next, employers must take aim at the fee-for-service reimbursement system, which is the most common method by which health insurance companies pay for medical services and which has fueled much of our skyrocketing healthcare costs. Fee-for-service rewards providers who are able to squeeze in more patient visits and perform more procedures. It encourages providers to profit from treating sickness, but not from maintaining the wellness of their patients.

Employers can help fix this flawed incentive structure by moving their employees away from health plans that offer little more than a telephone directory of independent contractors. The alternative is to partner with prepaid, integrated health systems like Kaiser Permanente, which serve as both insurer and care provider. These organizations are much more likely to deliver cost effective care that keeps their members well because these organizations are involved in both delivery and financing of care.

The high cost of healthcare must be addressed and innovations in methods of reimbursement will be key to achieving savings. California physicians given financial incentives to improve the quality of healthcare have made important changes designed to reduce costs, according to the results of a RAND Corporation study reported in the March/April issue of Health Affairs.

"Physician groups are responding to pay-for-performance programs by making practice changes and altering how they compensate physicians to reward quality, but health plans and purchasers say that those investments are not yet translating into substantial gains in quality," lead author Cheryl L. Damberg, PhD, a senior policy researcher at RAND in Santa Monica, California, said. "The true benefits of these programs may take more time to be realized and it is likely that investments in other quality efforts will be needed in addition to performance-based pay."

Health IT can help achieve these quality measures and promote further disruptive innovations. Using an Electronic Health Record connected via a Health Information Exchange is a first crucial step to any meaningful reform. Changes in reimbursement structure, quality measures, medical home models and expanding access will only be fully realized if we use all of the technology tools available.