Learning from other healthcare models
pharmafile | January 13, 2011 | Feature | | CapGemini, Kaiser Permanente, NHS, healthcare, integrated healthcare
When you need high quality healthcare that is also affordable, prevention is definitely better than cure.
How can governments and healthcare providers maintain, and even extend, high quality services while keeping costs down?
This question lies at the heart of the debate over healthcare reform – a debate that is at the top of the political agenda in many countries
The NHS reforms outline bold new plans for the UK that promise a ‘patient-centric’ future with increased power for GPs and a severe ‘de-layering’.
Meanwhile, Obama’s plans are pushing the US system towards a future where care is provided for all, although exact details of how funding responsibility will be divided between private sector and state are still being worked out. To achieve goals like these, it will be necessary to bring together the best elements of both state-provided and private healthcare.
The general philosophy of state providers is to respond to health issues by providing interventions and care to individuals as needed, and by and large they are effective at doing so.
By contrast, the more successful and profitable private sector companies educate and incentivise their members to manage their own health better, thereby preventing problems wherever possible. They also take steps to anticipate the future interventions that will be required, since forward planning reduces costs – substantially in the case of expensive interventions such as hospital admissions.
While both public and private sectors can learn from one another, this article focuses on lessons that state providers can learn from the private sector about affordable healthcare provision. In particular, we shall argue that adopting preventative strategies could drastically reduce costs while improving wellbeing.
We give special attention to Kaiser Permanente, a widely respected and much publicised US healthcare company. Finally, we consider the possible role of the life sciences industry in helping healthcare providers to bring together the best of the various systems.
Learning from successful companies: the value of prevention
Kaiser Permanente is one of the US’s largest not-for-profit health plan providers, and has advised both private and state healthcare providers in the UK, Canada, Brazil and Singapore. Its philosophy centres around preventing unnecessary hospital admissions, and in Kaiser’s own words: “Healthcare should not be a crisis management care model but should much better be a preventative care model, with the implication that the relationship between the patient and the healthcare provider is a lifelong relationship.”
Its doctors are salaried and therefore do not get paid on the basis of interventions or events.
Similarly, the performance metrics and incentives for doctors, pharmacists and care delivery teams are all designed to keep patients well, rather than treat illness.
Kaiser works with plan members to educate, screen and advise on health issues. Crucially, it does this when members are healthy to prevent the onset of problems as far as possible, and to anticipate those that cannot be prevented, planning appropriate responses.
This approach is mirrored by an increasing number of other providers, who offer incentives to their members to take more responsibility for maintaining and improving their health.
Discovery, one of the largest providers in South Africa, has gone a step further with its ‘Vitality’ plan, which offers assessment and advice on areas such as nutrition, exercise and lifestyle. Members who commit to improvements such as regular gym visits or dietary changes are awarded points that can be redeemed for discounts on health plan premiums, or for other rewards such as air tickets.
Elements of this approach are also offered by some state providers who offer screening services and support services for specific conditions. However, the UK’s Quality Outcomes Framework is typical of these public sector programmes in rewarding practitioners, whereas the private sector schemes usually incentivise the patients.
Risk management aids prevention
As we have seen, one key to reducing the cost of healthcare provision is to help and incentivise patients to stay well. The second, closely related, element of successful private strategies is better risk management – in particular, the identification of individuals and groups at risk from specific conditions.
An example is Kaiser’s ‘Healthy Bones’ initiative. For the elderly, broken bones can have serious implications: approximately one in four elderly people dies within a year of breaking a hip. Kaiser uses central electronic health records to identify high risk patients, and then assigns them to care teams who provide information and ongoing support.
The result in 2008 was a 41% reduction in broken bones. This has the double advantage of improving the health and wellbeing of large numbers of patients while also avoiding millions of dollars worth of medical bills.
Applying this percentage improvement to the UK NHS spend on broken bones, suggests potential savings of about £175m per year in acute care. Whilst the NHS does offer online educational material and a falls prevention service to patients, these are provided only after a GP referral. Success therefore depends on adequate risk management at a local level.
Core to the success of Kaiser’s initiative is the maintenance of central health records, enabling analysis of an entire patient population to identify at-risk groups.
Integrated, technology enabled models
Prevention and risk management are at the heart of successful private sector strategies for reducing the cost of healthcare while improving patient wellbeing.
However, not all conditions and events are preventable. Therefore, the right model of affordable provision must take service delivery into account, and particularly the management of chronic conditions such as heart disease and cancer which account for a high proportion of health expenditure.
Kaiser uses an integrated delivery model embracing “the care giver, the hospital, the laboratory and the pharmacy”, all of them with access to the patient’s electronic health record. The company believes this integrated approach, underpinned by technology, is the future model for cost-effective healthcare.
The technology not only provides a single view of patient details for all the practitioners but also allows plan members to connect from home to a range of online services. ‘My Health Manager’ is a website that in 2008 was regularly used by three million Kaiser members who sent 600,000 emails, receiving responses from doctors, nurses and other staff. For those with chronic conditions there is home health monitoring: a triple bypass recipient can step on a scale and use a blood pressure cuff every morning, and then automatically send readings, along with pacemaker information, to a website that is monitored by caregivers.
This kind of remote monitoring and internet-based communication could benefit cash-strapped state providers looking to reduce hospital admissions, as well as helping patients to avoid lengthy hospital stays.
Remote consultation with specialists has similar attractions. Kaiser has introduced ‘tele-dermatology’ to overcome a shortage of dermatologists.
Patients and their primary care physicians are connected electronically to dermatologists who use a range of information including digital images and the health record to diagnose problems and prescribe treatment. Techniques like this, if adopted by the public sector, have the potential to reduce waiting times drastically, improve speed and quality of care, and cut the cost of service provision for the taxpayer.
Applying the lessons can be challenging
For the state, it’s clear that adoption of private sector models would require a radical shift in emphasis towards preventative care and risk management. This shift necessitates broader and deeper relationships between patients and primary care practitioners than currently exist in most state healthcare systems. It also requires an acceptance of responsibility on the part of patients, with incentives to manage their own health.
These incentives are complex to achieve within a government subsidy model: when patients do not pay identifiable health insurance premiums, they cannot easily be offered discounts in return for healthy living. A version of the reward points scheme used by Discovery, as mentioned above, might be worth exploring, however.
Another major lesson is the adoption of an integrated approach. The difficulty here is that integration requires doctors, nurses, pharmacists, and anyone involved in healthcare delivery to think about and manage the overall cost of the service: this is the only way to maintain and improve the health of the patient population as a whole whilst remaining within a budget.
However, it represents a huge challenge for a typical state healthcare system, where practitioners have little or no ability to see, let alone control, the total cost of treatment, as metrics are collected and monitored locally. A further lesson is the importance of technology. On the one hand it can enable online support, home monitoring and ‘tele’ services, with the chance to achieve dramatic reductions in the cost of treatments – reductions that can be substantial in the case of chronic illnesses. On the other, it can be used to maintain central records that will drive efficient healthcare.
The latter area, in particular, is one where state providers are struggling, although private companies such as US Preventative Medicine and its UK subsidiary are offering relevant technology platforms.
The life sciences industry can help providers apply the lessons
State healthcare providers can learn from the private sector (and vice versa), but as they implement the lessons they will need help in overcoming the difficulties just outlined. Global life sciences companies, with their experience of the full range of healthcare systems, could be well placed to help decision-makers combine the best aspects of all of them. They occupy a powerful position as global entities interacting with fragmented and differentiated local markets. State-sponsored change is coming, and there is an opportunity for the industry to take a proactive role. While some risk is inherent in this approach, it is arguably less risky than waiting to understand the outcome.
There are some straightforward roles for life sciences companies to play. Educating and informing patients on general health issues and specific conditions is a continuation of their current activities.
Entities like Pfizer Health Solutions have been independently providing assistance to patients and healthcare professionals for many years. Increasingly, these activities can emphasise prevention as well as aftercare, and become part of a national strategy. For medical device manufacturers, home monitoring and ‘tele-treatment’ are a natural extension of their current portfolios.
Conclusion
Though they are approaching the problem from different directions, the UK and the US governments are both battling with the need to provide universal healthcare within stringent cost constraints. They need to preserve (in the case of the UK) or achieve (in the US) the ethos of a public service – plus all the trust that citizens have in such a service – while attaining the financial control associated with a private one.
Both the UK and the US, and other countries too, can learn from the experiences of a private sector (but non-profit) organisation like Kaiser.
However, major organisational and cultural life sciences companies could play a pivotal role in shaping future health services – by virtue of their knowledge of different healthcare systems worldwide, their track record in implementing organisational transformation internally, and their increasingly comprehensive scientific knowledge of the medical conditions in which they specialise.
Engaging with this role as quickly and actively as possible could improve companies’ sometimes strained relationships with national providers.
It would also help the industry to show the public that it is making an increasingly positive contribution to the healthcare landscape.
Matthew Whitson is a managing consultant at Capgemini consulting UK. Visit: www.capgemini.com
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