In 2021, healthcare spending in the U.S. grew by 2.7% and climbed to a grand total of $4.3 trillion, or $12,914 per person. This means that our health spending accounted for a staggering 18.3% of the nation’s gross domestic product.
Despite the monumentally high (and still increasing) costs of care in this country, the healthcare industry is still struggling to provide an efficient, holistic and technologically sound product for our patients.
The challenges we as a country face in improving our healthcare system won’t be fixed overnight, but there are clear, concrete steps that health plans and others can take to begin to address these issues and promote a better future for our families and generations to come.
Here are four strategic priorities health plans must focus on to make significant improvements in the coming year and beyond.
Determine how to achieve competitive scale
It’s time for health plans to work together to make a substantial impact and compete effectively for their members. To achieve this, however, will require intense collaboration and a willingness to spend on health plans’ part.
The plans that can strike this balance will work together to develop valuable capabilities, including health plan-provider data and workflow integration, scalable pay-for-value models and capabilities to support a redesigned, affordable approach to pharmacy. To manage costs of these tools, plans can share them with others while also obtaining scale benefits in their daily operations.
This won’t be a development that will completely flip our healthcare system in just one year, but we can start by figuring out which capabilities are critical to develop jointly or at an industry level and then convening the right organizations to figure out how to make this happen.
Successful health plans that are willing to work together to achieve this scaled model will be able to identify early critical capabilities and determine the most productive ways to get there, such as building, buying, renting or even merging. Those that aren’t willing to collaborate will find themselves at a disadvantage from both a competitive and a financial standpoint.
Make healthcare holistic and personalized
In 2020 alone, patients with behavioral health diagnoses accounted for nearly 1.5 million inpatient hospitalizations in California and approximately 2 million emergency department treat-and-release visits. These figures made up one-third of all inpatient hospitalizations and one-fifth of all emergency department visits that year.
If we learned anything from the pandemic, it’s that healthcare is much more than just dealing with a physical illness or filling out a prescription. COVID-19 had immense effects on our well-being overall and heightened the importance of having a whole-person-focused care delivery system.
As mental health challenges continue to climb and the need to address social determinants of health becomes more apparent, we as plans have a responsibility to foster more holistic and quality care. Just some of what we can do to assist our members can involve helping them secure appropriate housing and nutrition, providing them with social interaction or stress management support and other interventions that have a far bigger impact on health than traditional medical care.
Further, plans can facilitate the personalization of healthcare services, advancing the practice of matching treatment and support. This can be as simple as providing meal support for a patient with special dietary needs or providing transportation to an appointment that a patient was previously unable to travel to.
We likely can’t address many of these prevalent social and behavioral issues without major policy changes. With this significant hurdle in mind, healthcare players will need to influence policy constructively in the right direction to fulfill their goals and missions.
Pay for value
“If all else fails, bet on self-interest.”
I’m not sure who said this, but the quote has stuck with me, particularly after watching for decades as an industry unsuccessfully pushed back on financial self-interest to keep healthcare affordable. The only way to get to and sustain more efficient, high-quality, personalized and equitable care is to pay those involved in the care more when that happens and pay them less when it doesn’t.
The health plans that will make the most progress in improving cost, quality and member/patient service care will make it in the provider’s financial self-interest to do exactly that. As more patients turn to a care model that charges them based on the quality of care they receive, we can begin to eliminate the common issue of paying thousands of dollars for a misdiagnosed trip to the emergency department. Once we see more value-based care models, the plans and providers that are clinging to fee-for-service will soon lose patients, thus losing out on revenue and seeing more volatile profit margins.
Also, closely aligning the incentives of payers and providers will ultimately lead to more productive relationships between the two.
Bring healthcare into the digital age
The healthcare industry remains increasingly dependent on technology, yet the technology itself is lagging. In 2023 and beyond, health plans have a clear opportunity to deliver dramatic digital and technical transformation through the entire healthcare value chain.
A few technology imperatives for plans should include upgrading data management systems, shoring up data privacy and security practices, and stepping up in how, where and when to communicate with our patients. The data exist to make health plans smarter about how to best serve members, as populations and at the individual level—not using the information is a missed opportunity at best and irresponsible at worst.
Affordable, accessible, member-centric care delivery requires that plans adopt a technology framework that’s more automated, real-time, cloud-based and enabled, if not driven, by artificial intelligence. Having the right technologies in place, paired with not just shareable, but usable data, is required to make any sort of meaningful transformation possible.
COVID-19 reminded us that accessible, efficient data are non-negotiable at any time, but never more so than when trying to fight a global health crisis. Today’s healthcare system needs a tech infrastructure capable of both handling an influx of data and having those data in a usable format to fuel research and clinical discovery at the fast pace a public health emergency requires.
On a much more granular level, plans and providers that adopt updated technological workflows will gain administrative and healthcare cost advantages over those who do not, while also being in a better position to use AI and analytics for smarter, more targeted care management.
By pulling these strategic levers, health plans of any size can play a crucial role in making care more efficient for patients, while being more effective partners for providers in the quest to make healthcare affordable, accessible and equitable.
Paul Markovich is the president and CEO of Blue Shield of California.