5 ways to accelerate healthcare innovation and delivery system reform

Innovations could help produce a more efficient and effective healthcare delivery system but only if the industry creates conditions that allow new models to thrive and clear a pathway to spread and scale reforms. Getty/jackaldu

Innovations could help produce a more efficient and effective healthcare delivery system but only if the industry creates conditions that allow new models to thrive and clear a pathway to spread and scale reforms.

That’s the underlying message of a new report, “Accelerating Innovation in Health Care: Five Game-Changing Ideas to Clear the Way, by the Aspen Institute’s Health Innovation Project. The report is the result of off the record discussions with dozens of executives from Fortune 500 companies, provider organizations, and insurance companies; and leading innovators, researchers and academics.

In order to drive reforms, “the most pressing task at hand is to create fertile ground in which the seeds of innovation can grow, especially by stimulating market demand for change,” according to the report announcement.

The report explores five “game changers” to create conditions in which new models for delivering healthcare can thrive. These big ideas suggest the industry:

End fee-for-service reimbursement by 2025

If healthcare continues to be reimbursed based on how much service is provided, there is no sustainable incentive to apply innovation to diminish volume and lower healthcare costs, according to the report. Its replacement—a new universal reimbursement model, designed collaboratively by payers and patient advocates— would pay for patient and community outcomes, not for services provided. This model would create incentives for new innovations to keep patients healthy and remove waste from the healthcare system.

Cut out the middle man and create direct-to-consumer insurance products.

A tighter alignment between what patients value about care and the financial goals of their providers would push providers to respond to consumer needs or risk losing market share. A direct-to-consumer marketplace would allow patients to opt into a relationship with a particular provider group. Employers could still contribute to the cost of this insurance model for their employees, but they would no longer be able to influence its design as middlemen, the report noted.

Share healthcare savings with consumers and communities.

Along with rewarding providers for good outcomes, new payment models must be structured to also reward the patients and communities who achieve them. A shared savings model would allow patients to earn money for managing their medical or health conditions. Although some employers offer wellness plans, the report said this concept could be applied on a larger scale. As an example, the report said the federal government could calculate how much Medicare, Medicaid and other taxpayer-funded programs would save over the next 30 years if blood pressure readings were controlled to a certain level among the population in a particular city. To save that money, the city would receive federal funds to promote blood-pressure-lowering goals through local policies and at all levels of the community, including schools, workplaces, and public spaces. Continued funding would be contingent on measurable progress, the report suggested.

Empower consumers with their own data.

Although the industry has an extraordinary amount of health data from electronic health records, insurance claims and clinical trials, the report noted that most patients make healthcare decisions based on the advice of one doctor. But if patients had greater access to aggregated data, supported by artificial intelligence and analytics, in order to make decisions about their care, it would revolutionize the industry and create a new demand for innovation, according to the report.

Develop a common return on investment (ROI) calculator.

It would be easier to adopt innovations if the industry had a universal ROI calculator that would provide information about likely outcomes and costs, taking into account short-term savings, long-term impacts and cost-sector benefits, according to the report. New research and outcomes should feed into the calculation as well. “Although individual entities, such as the Innovation Center of the Centers for Medicare and Medicaid, have encouraged ROI calculations for specific payment reform proposals,” the report said, “an industry-wide approach would accelerate innovation exponentially.”