The innovation imperative

BOSTON—Innovation is an imperative, not just an option in today’s healthcare environment, said futurist Ian Morrison, PhD, speaking at the National Healthcare Innovation Summit on May 14.

The ongoing quest for value is a big driver, he said. Hospital prices are under intense scrutiny, accountable care is a megatrend and we’ve seen the rise of public and private exchanges which all have served as a transformative set of shifts driving the market more toward retail.

That kind of change would mean that all assets that made money in the old system become liabilities.

Morrison predicts 100 to 200 very large regional systems dominating the healthcare landscape in the future. Hospital consolidation is high which could eventually run into antitrust concerns. The industry has “come to the belief that you have to be big and integrated to be superior” and for the time being, that attitude is reinforcing behavior toward consolidation.

In his 25 years of surveying on these topics, “I’ve never seen employers this upset. We’ve hit this wall where we must innovate and redesign the delivery system. It needs to be science based, technology-enabled, and consumer friendly. The average household cannot afford the average premium. That's a wee bit of a problem" in a country where the median household income is $52,000 and the median annual household cost for healthcare is $17,000.

Morrison said he sees enormous opportunity for innovations that look a lot more like social work and IT-mediated social services than medical care.

It’s different this time, he said, because the Affordable Care Act is a stimulator and accelerator of change. Compared with the 1990s, technology has changed, the affordability issue is different and there is a quality issue. “Docs have been softened up by a series of issues not the least of which was ‘meaningless use’ and consumers have been empowered. There are different disruptive actors. I don’t think this is a replay of the 1990s.”

The U.S. is the only industralized country in which people can lose their health insurance. It also has the largest government run health system in the world but doesn’t have a high performance rate on the outcomes side, he said. But, “medical care is overrated as a contributor to overall health.”

Growing patient engagement is changing the landscape as well. Morrison cited the recent Time article that revealed the vast discrepancy in healthcare prices—in some cases a tenfold difference. Studies and surveys show that consumers are willing to make tradeoffs such as lower premiums for restricted choice. However, they want low monthly premiums, to keep their current doctors and  have no limits on their access to medical technology. “And they see no irony in that,” he quipped.

Greater responsibility is being pushed onto employees to shop based on cost and quality and more employers are actively exploring ways to avoid providing health insurance to their employees. Public employees are the ones to watch, he said. “The people with the best health benefits are teachers and firefighters. When they have to pay copays like everyone else, that’s going to be transformative.”

The current tally for those who signed up for Obamacare is 8 million and 85 percent are eligible for financial assistance. More than one-quarter (28 percent) of enrollees are aged 18-34. “My guesstimate is somewhere between 10 to 12 million people have insurance now as a result of the Affordable Cart Act that didn’t have it last year. That’s the biggest dent since Lyndon Johnson and nothing to be sneezed at.”

This has shown that exchanges can be functional, he added. “There will be choppy waters over the next two years but [exchanges] are not going away.”

Meanwhile, population health is impacting care. He cited a patient in Denver who kept being readmitted to the hospital. She had diabetes and wasn’t taking her medicine. When asked why she said they need to be refrigerated and she doesn’t have a refrigerator. They bought her one. “When you get into triple aim work and when you think in those terms, you have to think about different innovations. You have to open your mind.” Keep thinking about traditional methods of delivering care but be open to other solutions too. “It’s most important to go after lower costs. You have to get serious about not just chipping away but figuring out how it can be half the price.”

Change is not going to stop, Morrison said. “It will accelerate if anything. The solution is about the delivery system and changing the way we do what we do, not pretending that this is all going to sort itself out.”