Predictions, Hopes and Aspirations for U.S. Healthcare in 2015

Predictions, Hopes and
Aspirations for U.S.
Healthcare in 2015
Dale Sanders
Senior Vice President, Strategy

© 2014 Health Catalyst
www.healthcatalyst.com
Proprietary. Feel free to share but we would appreciate a Health Catalyst citation.
Poll Questions
2
How are you involved in healthcare?
a. Executive – 26%
b. Clinician – 9%
c. IT – 15%
d. Data Analyst/Data Architect – 15%
e. Other – 32%
What is your primary functional area of expertise?

Today’s Agenda And Format
• Why is so healthcare so
predictably unchanging, year-to-
year?
• Is there any good news?
• The real predictions for 2015
• The aspirational predictions for
2015
• Poll questions for your predictions
• Open the telephone lines for your
comments, questions, and
predictions

Mean Time To Improvement
Measured in years and decades for healthcare… why so long?
4

Only One Part of The Bad News
6

There Is Some Good News
Maybe our MTTI will start to decrease?
• BCBS of North Carolina posts contract prices with providers
• http://www.bcbsnc.com/content/providersearch/treatments/index.htm#/
• Sec Burwell announcing “Our goal is to have 85% of all Medicare fee-
for-service payments tied to quality or value by 2016, and 90% by 2018.”
• NEJM, January 26, 2015
• Republicans (Hatch, Burr, Upton) offer alternatives to the ACA that seem
to have merit
• But aiming for repeal of ACA and replacing it with Patient Choice, Affordability,
Responsibility, and Empowerment (Patient CARE) Act
• UnitedHealthcare, Humana and Anthem Blue Cross Blue Shield offer
HealthySavings discounts at grocery stores for buying healthy foods
• Kenosha News, Feb 10, 2015
7

Asymmetric information in
micro and macroeconomics;
Nobel Prize, 2001.

Now, About Those Predictions…
First, the most obvious…
• Mergers & Acquisitions
• Supreme Court
• Accountable Care Organizations
• Physicians
• Drug reform
• Broad insurance, narrow
coverage
• HIE Failures
• EHR Disillusionment

Mergers & Acquisitions
CEOs with cufflinks and monogrammed
shirts love mergers and acquisitions, fueled
by the availability of cheap money and
testosterone, until they realize they don’t
have the data to manage the new
company.
CEOs with a lower wardrobe budget will
also look for M&A opportunities, but will be
careful, pragmatic, and data driven.
The pragmatic settlers, not the pioneers,
are going to create better, more efficient
care through M&As in 2015.
By 2020, 70% of US healthcare will be
delivered by 9 very large, regional health
networks

Supreme Court
The Supreme Court has two choices
regarding King v. Burwell and
federal subsidies:
1. Interpret the spirit of the law
2. Interpret the law’s precise wording
If overturned, millions of voters
would suffer financially from the loss
of those subsidies.
The Supreme Court will rule in favor
of the subsidies and the Affordable
Care Act.

Affordable Care Act
• Congress will threaten to
repeal it, altogether.
• Obama will threaten to
veto the repeal.
• Eventually, the GOP will
propose dramatic but
effective changes that
Obama will support.
• Compassionate
Capitalism

Accountable Care Organizations
Burdened by administrative overhead,
federally ACOs will continue to struggle
and underperform.
In 2015, the federal government will start
acting like the world’s largest customer
of healthcare instead of the world’s
largest bureaucracy of healthcare
governance.
The ACA will be rewritten, trimmed,
improved and Obama will agree to the
changes before he leaves office.

Physicians
In 2015, as the centroid of ACOs
crystallizes around physician
groups.
Physician groups are gaining
ground and will increase their
lead over hospital and insurance
centered ACOs.
The future of accountable care
resides in the hands of
physicians.

Pharmaceutical Cost Reform
High-profile drug costs, such as Solvadi
($84,000 per regimen for hepatitis C),
will spur debate and concern.
But no meaningful progress on reform
in pharmaceutical pricing will take place
in 2015, thanks to pharmaceutical
lobbyists and weak-kneed politicians.
(US drug prices to consumers are 3x-
5x more than in Germany and the UK,
btw)

Broad Insurance, Narrow Coverage
Healthcare will hit 20% of GDP.
Affordability of care will be hotly
debated, once again.
The expansion of “affordable”
insurance policies will highlight the
downside of very narrow networks and
coverage.
Patients will find very limited coverage
and enormous out-of-pocket expenses
that will drive uncomfortable headlines
and subsequent changes to the ACA.

Health Information Exchanges
HIEs will go deeper into the
“Trough of Disillusionment”
The benefits of an HIE are in
direct contradiction to the existing
US economic model which
rewards inefficiencies.
Document-centric HIEs will be the
worst in terms of perceived value
by clinicians.

EHR Disillusionment
The pain of reality is just beginning.
83% of clinicians have a negative view
of EHRs.
The outcry will deepen and broaden as
the limitations of EHRs to support
population health, clinical quality, value
based purchasing, patient safety and
clinician efficiency become more
painfully obvious.
They were designed for Healthcare 1.0,
circa 1964.
Are they to blame or are we?

Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. 22

Aspirational & Satirical
Predictions

Meaningful Use
As Congress debates Meaningful
Use, it will come down to these
two barriers:
1. The EHR data interface is encounter
specific rather than patient centric and
inherently lacks an effective workflow.
2. EHR vendors see interoperability as a
threat to their market share.
Legislation will force EHR vendors
to support interoperability--
technically, contractually, and
economically.

Wal-Mart Disrupts GPOs
Wal-Mart’s entry into primary care
clinics and the insurance market
are the first steps towards the
complete consumerization of
healthcare.
In 2015, Wal-Mart’s next
disruptive step is in the logistics
and supply chain of healthcare,
where they will completely
unsettle group purchasing
organizations (GPOs) in five
years.

Cleveland Clinic Telemedicine
Borrowing from lessons learned in
military operations and command
centers that managed over
400,000 troops in Iraq, the
Cleveland Clinic will open a
telemedicine command center that
can monitor, interact, and manage
100,000 patients in post-acute
home care, hospice care, and
chronic condition management
settings.

Price Transparency
Hospitals and physician groups will
continue to drag their feet on the issue of
price transparency, even though they are
required by the Affordable Care Act to
make their prices publicly available.
Several states will pass laws to address
this problem in 2015.
Hospitals and clinics that do not post
their prices on the web will not be
allowed to pursue their bad debt
collections through collection agencies or
legal action.

DoD EHR Contract
The DoD was once one of the most
inefficient and wasteful operations in the
world.
Today the DoD culture embraces
constant change, adaptability, precision,
and execution.
As a consequence, it will surprise
everyone and delay its award of the $11B
contract until existing vendors offer better
solutions or a new, dark horse vendor
appears with a modern, 5th generation
EHR.

Employer-Sponsored Medicine
In a bold experiment to dramatically cut
costs and improve the quality of care to
their employees, Toyota will acquire two
hospitals and two physician groups near
their San Antonio facility in 2015.
If this experiment succeeds—and it is
expected to—Toyota plans to expand the
model to all of their manufacturing plants in
the U.S.

Medical Tourism In Your Backyard
Dr. Devi Shetty, founder of the 29-hospital
Narayana Health System in India and
Health City Cayman Islands, will open a
1000-bed hospital and affiliated clinics on a
Native American reservation in the central
U.S., most likely Oklahoma, providing a
huge economic boost to the tribe, while
operating under the benefits of sovereign
nation protection.

Affordable, Accountable Insurance
State Governors will follow the lead of
Colorado and require all hospitals and
physician groups licensed in their states to
offer their own health insurance plan, thus
encouraging the same organizational
balance between quality-of-care and cost-
of-care as exemplified for decades by
organizations like Intermountain
Healthcare.

Elimination of Federally Managed
Medicare
In a bold, bipartisan move, Congress will
eliminate Medicare at the federal level,
replaced by an expansion of Medicaid
services and funding at the state level.
Several independent analyses will indicate
the move will save billions of dollars without
sacrificing patient care.
Quality of care will improve through tailored,
regional personalization and local
accountability.

Taxation on Violence
An anti-tax, 2nd Amendment Congress, will
ensure all ammunition will be taxed at 50%
and the proceeds will fund:
1. A national insurance program for all
victims of murder and major life
disabilities caused by firearms
2. Development of a behavioral health and
cultural awareness and sensitivity
program that deals specifically with the
reduction of gun violence in the U.S.,
particularly mass shootings.

The NFL and Genetic Medicine
The Denver Broncos will steal DNA
material from the Seattle Seahawks
quarterback, Russell Wilson, and splice that
into Peyton Manning's genome.
The Broncos will go undefeated in 2015
and win five Super Bowls in a row.

Jimmy Hoffa Mystery Resolved
Two of the biggest mysteries of our
generation will be simultaneously
resolved when Mr. HISTalk reveals
his identity in 2015.

Poll Question #1
Will the Supreme Court rule in favor of Burwell and
the Affordable Care Act?
a. Yes – 76%
b. No – 24%
36

Poll Question #2
Will Congress and the President reach a favorable
agreement on improvements to the Affordable Care
Act?
a. Yes – 18%
b. No – 82%
37

Poll Question #3
Will the DoD award an EHR contract to:
a. Epic – 37%
b. Cerner – 10%
c. No one – 16%
d. A surprising dark horse – 36%
38

Poll Question #4
Will we make any significant progress on price
transparency and availability, e.g., publicly available
costs published on the web?
a. Yes – 71%
b. No – 29%
39

Poll Question #5
Will clinician satisfaction with EHRs improve, decline,
or stay the same?
a. Improve – 34%
b. Decline – 32%
c. Stay the same – 34%
40

Poll Question #6
Will Peyton Manning and the Broncos win the Super
Bowl in 2015?
a. Yes – 9%
b. No – 74%
c. What’s the Super Bowl? – 17%
41

Thank You
Upcoming Educational Opportunities
How One ACO is Using Analytics to Drive Clinical & Operational Excellence
Date: February 18, 2015, 1-2pm, EST
Hosts:
Gregory Spencer, MD
Chief Medical Officer and Chief Medical Information Officer
Crystal Run Healthcare
Scott Hines, MD
Co-Chief Clinical Transformation Officer
Crystal Run Healthcare
Register @ www.healthcatalyst.com

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Predictions, Hopes and Aspirations for U.S. Healthcare in 2015