2017: The Year We Become Healthcare Consumers Emily Lamont, Director, Oxeon Holdings and Srishti Mirchandani, Director, Oxeon Ventures

Healthcare

Whereas patients receive care, consumers make choices. Try as we may to act like consumers, the healthcare system makes this incredibly difficult. Whether we're ready or not, the Trump administration is about to make us all healthcare consumers FAST.

Policy direction and fiscal pressure are going to accelerate demand for healthcare consumer tools.

We have made strides to augment healthcare choice, increase transparency, engage patients, and collect individual health information. The past decade of legislative history has laid the foundation for a revolution in how we deliver and consume healthcare, paving the way for healthcare consumerism. Healthcare reforms led by the Obama Administration have spurred unstoppable momentum to construct the infrastructure necessary for informed choice. While the ACA has been the catalyst, even its repeal will not stop the drive forward to healthcare consumerism. If anything, the intended GOP policies may be an accelerant for consumerism on top of the momentum Obama helped put in place. With healthcare costs continuing to rise and more cost responsibility shifting to the individual, patient demand for information and tools may reach a tipping point.

Consumerism has long been a buzzword in healthcare...and ONLY a buzzword. Following healthcare reform and the ACA, a surge of innovation, dollars, and energy flowed into the antiquated industry. Within years, the healthcare industry had coined a new term: the healthcare consumer. This term intended to capture the idea of a proactive purchaser of healthcare: an educated consumer who buys healthcare on the basis of price, quality, and personal preferences. This buzzword was bold and represented a fundamental shift in how we approached and innovated around healthcare. Yet in 2017, it still represents a mind-shift more so than the modus operandi.

There have long been barriers to making healthcare consumerism a reality. The structural barriers to acting as a healthcare consumer often feel insurmountable. There remains a lack of objective measures and information needed to evaluate choices. There remain information barriers to accessing and understanding one’s own health, choices, price, and quality metrics. To date, accessing this information has been cumbersome at best, and non-existent at worst. As a result, any sense of choice has felt shallow.

CHOICE IS THE FOUNDATION OF CONSUMERISM

Without real choices, it does not matter whether we can evaluate the characteristics of a doctor, drug, or surgery. The ACA set into motion a small explosion that has ignited the fire for innovators who have embraced new models, providing patients with a greater selection of care. Depending on the preferences and characteristics of the patient, new models of care are constantly being invented and tested. Primary care has expanded beyond the doctor’s office to telehealth from your kitchen table, retail clinics at the local pharmacy, and urgent care clinics on your street corner. Meanwhile, the definition of primary care has expanded greatly to include concierge medicine, behavioral health, integrated facilities and risk-based models. Read: more choices!

In addition to choice over providers and care setting, millions of patients now have increased choice regarding insurance coverage. Now more than ever, patients can choose insurance on the basis of price, quality, and other objective metrics. Medicare patients can choose between private Medicare Advantage plans with clear quality ratings alongside price. Medicaid patients can increasingly choose among Managed Care and traditional Fee-for-Service plans. Employees are steadily being offered more choices by their employers via private benefit exchanges (such as Liazon, now a part of Towers Watson) that allow employees to select the plan right for them. Additionally, individuals and small businesses utilize the new public exchanges to shop for health insurance.

Despite enthusiastic early predictions that exchanges were the future, individuals and employers have only slowly warmed to the idea. In both the public and private exchanges, choice has led individuals to think through their options more carefully and to better understand their plan coverage. As insurance choices continue to change, the American population is becoming increasingly aware and informed about their health insurance – a positive turn, even if this engagement is being driven by fear of losing coverage. If the subsidies are repealed, we expect individuals to face increasingly difficult decisions about how to afford healthcare. If the individual mandate is repealed, we expect the individual to also face increasingly difficult decisions about whether to purchase health insurance. To make sense of these choices and their tradeoffs, healthcare consumers need more information.

"As much money and life as you could want! The two things most human beings would choose above all – the trouble is humans do have a knack of choosing precisely those things that are worst for them."

— J.K. Rowling, Harry Potter and the Sorcerer’s Stone

Without trusted information and points of comparison, it does not matter whether or not we have choices.

The first pillar for a healthcare consumer is to be able to identify value – long an elusive metric in healthcare. Before patients can purchase healthcare on the basis of value, discussed here as a function of price and quality of care, we need to agree on a common set of objective measures to assess quality. Since 2009, the widespread adoption of EHRs has made outcomes data more accessible and comparable. With passage of the HITECH Act, technology innovators surged into the space to help physicians manage and understand the data. Meaningful Use played a key role in accelerating the use of EHRs, and thus the data necessary to better identify quality. The ACA then tied this data to provider reimbursement for quality outcomes, through initiatives such as PQRS and Medicare Star Ratings.

As of January 2017, the final phase of Meaningful Use has kicked off, further expanding the creation and aggregation of data to assess quality. Provider reimbursement incentivizes greater usage of electronic prescriptions, computerized provider order entry, and the electronic exchange of information (alongside other objectives). As the more complete data set comes to bear with historical data for comparison, the opportunities to better assess quality will accelerate.

A respected leader in healthcare quality, Intermountain Healthcare provides an excellent case study for the steps involved in getting from EHR implementation to widely accepted quality outcomes. A leader in quality, Intermountain Healthcare’s technology path speaks to the greater process the U.S. healthcare system is undertaking. In the 1970s, Intermountain created one of the first EHR systems. The EHR system soon thereafter began to result in objectively higher outcomes of care. However, it took decades to fully understand the power of data analytics to improve patient health. Success hinged on the development of trustworthy data, cultural adoption, and a common language of metrics.

Intermountain has long been recognized for a reputation of evidence-based medicine cemented by its unique penchant for building internal data and analytics assets and programs to support this. For Intermountain, the adoption of technology has played an important role in achieving clinical quality at lower costs than the national average. For example, they have a technology-enabled service offering to support clinicians in reducing clinical variation and improving outcomes. More information to come, but Oxeon is proud to be co-founding a company with Intermountain to commercialize this evidence-based medicine platform. It is tools and systems such as these that will help providers utilize quality metrics. As providers agree on objective standards of quality, patients can begin to understand the language of quality as well; meanwhile, innovators are stepping into help patients interpret the language.

The second pillar for a healthcare consumer is patient engagement, which has been encouraged by the shift to value based care. Prior to the ACA, the payment system financially incentivized providers to focus on volume. The ACA inspired a seismic shift, propelling the healthcare system from FFS towards value-based care. For providers, the value-based approach rewards quality outcomes over volume. For patients, the value-based approach is intended to deliver better results at a more reasonable cost.

As we say goodbye to FFS, the notion of a passive patient is disappearing. Healthcare systems are proactively engaging patients in their health. In turn, patients are furiously googling, desperately trying to understand their healthcare options and know which questions to ask. When a patient is engaged in their healthcare, the result is better health outcomes.

While the link between quality and payment grows, providers and payors are increasingly focused on high-value care. In the process, patient engagement and the patient experience have emerged as key elements of quality, and in turn, value. Across innovative health systems, the hiring wave of Chief Experience Officers speaks to this new focus.

Better understanding the personal needs of a patient outside the traditional realm of healthcare is proving an effective way to keep patients out of the hospital. Be it Landmark Health’s focus on the whole person and their environment, providing comprehensive care to patients in their home. Or, Docent Health’s new approach to patient experience from the beginning to the end of a patient’s interaction with a healthcare system. Docent Health pioneered a new approach to the patient experience, building a customized patient journey through the health system. For example, the Docent platform recommends birthing plans and prenatal classes to expectant parents while keeping family members updated via text and other tools. This form of patient engagement was unimaginable ten years ago, though it remains the exception not the rule.

The third pillar for a healthcare consumer is allowing patients to better and more fully interact with their personal healthcare information. Patients are more engaged than ever in managing their health, but the inability to access and understand their own healthcare information remains a barrier. In the coming years, Meaningful Use provisions will be powered forward by the bipartisan MACRA; together, they will lay the foundation for patient self-knowledge.

In 2017, health care regulations continue to encourage greater patient access and control of their data. The goal is for EHRs to allow patients to not only view their data, but also to interact with it - even download and send it to other providers - and to use their personal data to guide individual healthcare choices. While this process has taken longer than expected, it's importance as a pillar of healthcare consumerism cannot be underestimated.

Moreover, the development of EHR's has enabled providers to deliver more personalized care based on the preferences and unique characteristics of individuals. As data and tools help our records to become more accurate, we will develop a more complete and reliable set of data for understanding ourselves and our health needs. Clinical data is only a piece in the puzzle of our personal health, because today the data points are largely from our sick days. We've shifted into an era where patients want to integrate this data into their overall health picture. Companies like Neurotrack are helping patients to better understand their personal health information even before symptoms occur, empowering patients to utilize the information and proactively manage their health. This combination of traditional health data alongside newer forms of information will energize the new wave of a true healthcare consumer.

GOP POLICIES FORCING PATIENTS TO BECOME CONSUMERS…

Whether or not we’re ready, expected GOP policies on healthcare reform will (even more) rapidly force patients to become healthcare consumers. Over the past decade, healthcare reform has pushed forward policy, technological progress, and private sector investment that equip the patient to be a better healthcare consumer. Patient choices, value transparency, patient engagement, and individual health data have increased over this evolution. However, there are still large gaps in enabling individuals with the accurate, user-friendly, and effective tools that support them in their role as consumers.

We believe that this gap, and therefore the opportunity to fill these gaps with tools and support, persist. In fact, the touted Republican healthcare policies can be an accelerant to the patient changing into a consumer, and the patient needs smart tools that enable the best healthcare choices for their resources and preferences. For instance, the expansion of health savings accounts (HSAs) is a frequently cited healthcare policy change on the horizon. Optimal use of HSAs requires more than understanding its tax advantages, it also requires educated use of the dollars saved within it.

Traditional GOP priorities of free-market principles push the healthcare dollar even more firmly into patient hands. We know that blueprint proposals such as Paul Ryan’s “A Better Way” and precedent House repeal bills suggest more free-market principles and individual agency over healthcare choices. However, there will continue to be uncertainty and distracting speculation around the exact policies to be enacted under the new administration until they are passed.

In any version of forthcoming healthcare policy, individuals need products, services, and a mindset from other stakeholders that helps them become informed and effective healthcare consumers. These new developments should not only provide clear and reliable information about healthcare cost and quality, but they also can shape an individual’s preferences and priorities. All other healthcare stakeholders must then be ready to capture the healthcare consumer’s attention and dollar.

AS ENTREPRENEURS, WE ARE BETTING ON THE PATIENT-AS-CONSUMER…

In the next few years, we see real opportunity at the intersection of patient engagement and healthcare consumerism. Even if the conditions under which the individual is selecting and purchasing healthcare have changed, we are doubling down our commitment to empowering the individual. In uncertain times with increased financial risks, patients will be required to pay attention more than ever. And, Oxeon is committed to building companies and supporting products that will help the patient-as-consumer navigate the crazy maze.

We are excited about a patient financial experience approach that does just that: enabling health systems to have the information needed to truly treat the patient as a consumer of healthcare, personally engaging them to directly understand their healthcare expenses.

We are passionate about a partnership with Breastcancer.org to empower breast cancer patients by providing quality guidance, timely information, and necessary tools tailored to everyone’s personal health journey.

Similarly, we’re co-founding and betting on Risalto Health, a technology and analytics company that engages and supports patients throughout their musculoskeletal pain. Risalto provides patients with the consumer choices right for them, guiding them to high quality providers and high value treatment paths while avoiding unnecessary or wasteful treatment.

While the foundation and early building blocks for healthcare consumerism are in place, there remains significant work to provide patients with the tools to be effective consumers. The direction of the past decade combined with GOP priorities makes the case stronger than ever to enable the patient-as-consumer. To us, this is more than a trend; this is a movement. The movement has interested parties from both sides of the aisle, and we believe more and better tools are needed to bring all pockets of the country onboard.

Emily is Director of Growth Strategy at Oxeon and was a founding team member of the Venture Studio. After receiving her MBA from Stanford, Emily returned to Oxeon to manage Oxeon investments and drives a range of strategic initiatives across Oxeon’s healthcare growth services. Srishti is a Director at Oxeon Ventures, joining the team after receiving her MBA from Columbia. She is focused primarily on building new businesses through the Venture Studio, working on the concept ideation, business plan development, and standing up new businesses created de novo or in partnership with other healthcare organizations. Emily and Srishti are based in New York, NY.