OXIO Health, Inc. – How Can the U.S. Healthcare System Recover?
What if I were to tell you that our healthcare system, once believed to be one of the strongest and most resilient healthcare systems in the world, is considerably more vulnerable than we would have imagined it to be today. Though many flaws and exceedingly high costs, the U.S. healthcare system has always been there when we needed it – possibly even saved our life, the lives of others or our loved ones.
What if I were to tell you that the flaws, or small cracks in the surface that some of us in the healthcare industry could see, would become major chasms and craters as a result of the COVID-19 pandemic virus? What if I were to tell you that while we all are watching in astonishment at the rebound of the financial markets, the healthcare system is gasping for air and struggling to get back to its feet? What if I were to tell you that ‘you may not keep your doctor’ because they might be forced to close their practice due to the mounting financial pressures that they were unprepared for?
I am certain you would ask why? Why are these things are happening, to what appeared to be such a robust healthcare system, that had grown consistently from 5% of Gross Domestic Product (GDP) in 1965 to 18% in 2019? The answer lies in a combination of two specific areas: structure and the lack of data; the structure of the business model and payment system for physician practices in general needs reconstruction, as well as the lack of complete data to track the patient across delivery systems or even at home.
The structural issue centers almost exclusively on the payment system, which today is overwhelmingly “encounter based”; meaning every time there is an encounter with a patient the physician can bill the patient, the insurance company or Medicare – think about it as a tollbooth on the highway. Because so many of our primary care physicians have employed the encounter-based or fee for service model, physicians could not see patients during quarantine which led to zero billing and worse, zero revenue. Further, because most primary care physicians are at the bottom of the pay scale, they had far less reserves and much less resilience and sustainability. Consequently, as noted in numerous reports Primary Care Practices could close a matter weeks not months, as well as other reports from the medical community, that predict an upwards of 20% of primary care practices who have indicated they are closing or considering closing their practice permanently. This could be a huge loss to our community based, point-of-care health delivery system.
According to the U.S. Bureau of Labor Statistics, 1.4 million health care workers — many of them nurses – lost their jobs in April 2020 and more than 134,000 of those losses happened in hospitals! For decades, the healthcare industry proved to be a “safe haven” for workers during some deep and long recessions. In fact, when other industries were laying off, the healthcare industry was hiring; however, that’s not the case today! With physician practices closing their doors for good, many of these jobs will not be returning soon, if at all.
The inevitable alternative to the fee for service model is “value-based care”, or a form of the managed care model, that is in part, employed for Medicare Advantage patients in which the payer (usually an HMO) receives a fixed amount monthly (capitation) from the Centers for Medicare and Medicaid Services (CMS) and in turn, pay the attending provider a fixed amount per month regardless of encounters with the patient. Instinctively, this means that the healthier the patient the fewer the visits to the provider, or worse to a hospital or ER, and the more of the capitation is left for the provider as income. This not only provides some resilience for the provider, but also it incentivizes the provider to focus on the patient’s overall health and wellbeing as opposed to encouraging encounters.
Universal Data Access – Technology
Universal data access, the secure and accurate resource to a patient’s medical record, and the technology to assure the data is up to date, is the second area affecting the healthcare system. Telemedicine has received a big boost from this crisis and it has provided a temporary measure of assistance for those patients needing to “touch base” with their doctor; however, only for those patients that needed to see their physician for a physical checkup, such as cardiologist or endocrinologist for diabetics or other chronic disease specialists, the telemedicine portal does not offer a total solution – it is not, and cannot be, a complete replacement to an in-person visit. Further, a recent study by the University of Michigan at Ann Arbor found that Just 4% of Older Adults Use Telehealth. So, despite the hoopla, telemedicine has a long way to go to become mainstream and much of this has to do with data access for the physician. For telemedicine to advance to a more useful and broad-based tool, the provider will need access to universal medical records and real-time, home-based devices. If the individual is not a patient, asking them how they feel and what medications they are taking is about as much information as the provider can get without having access to the patient’s historical medical records. This is not a recipe for quality care by any standard.
Despite more than $100B USD being spent in the past five (5) years on Electronic Health Record (EHR) programs, data access and the interconnectivity between EHR programs remains a major impediment to better quality of care and a reduction in healthcare cost. Telemedicine has proven its value in the pandemic; however, there is still a long way to go to bring it to the “at risk” population that could benefit the most. Clearly, the ability to know the patient’s condition by having the vital information such as temperature, respirations, blood pressure, heartrate and blood glucose (for diabetics) would certainly improve the accuracy of any telemedicine encounter and minimize the liability to the physician.
Today, the question remains, how we can bring the healthcare system back to a “healthy” state again? There are unquestionably a complex set of variables to the healthcare delivery system that is further complicated by extremely siloed medical data. These issues demand a comprehensive solution – in other words there is no single solution or a “silver bullet” that will fix the system.
We believe that it will take “technology-infused healthcare” to fix the issues – the right combination of technology, driven by healthcare and a fundamental pivot in the payment model for most physicians. The encounter-based or fee for service payment model will remain for quite some time (years but not decades); however, the more we can implement the value-based payment model, with the result that the focus of the “healer” is on the patient from a total view, the healthier patients will be.