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What Do Physicians Need to Transition to Value-Based Care?

October 31, 2016
by Heather Landi
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The ongoing transition from volume-based to value-based payment and care delivery models in healthcare has been a monumental industry-wide effort over the past few years, but there are many indicators that the pace of change has been slow, according to a recent Deloitte report.

The Deloitte Center for Health Solutions’ report, “Practicing Value-Based Care: What do doctors need?” offers physician perspectives on practicing value-based care based on Deloitte’s survey of 600 U.S. primary care and specialty physicians.

And the survey findings come on the heels of the Centers for Medicare & Medicaid Services’ (CMS) posting of the final Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) rule on October 14. The new law will fundamentally change how eligible Medicare physicians will be reimbursed, starting with an outcomes-based Quality Payment Program set to kick off in 2017. MACRA sets two reimbursement tracks for physicians in Medicare. The default track is the Merit-Based Incentive Payment System (MIPS), which varies payments to physicians based upon their individual performance on cost and quality indicators as well as their use of health information technology and clinical improvement activity. Additional payments go to physicians and other clinicians who participate in advanced Alternative Payment Models (APMs), or certain value-based payment models that carry both upside and downside financial risk.

According to the Deloitte report, there is currently little focus on value in physician compensation and physicians are generally reluctant to bear financial risk for care delivery, and both are factors in the slow pace of adoption. Another key finding is that tools to support value-based care vary in maturity and availability.

Ken Abrams, M.D., managing director in Deloitte Consulting’s strategy practice and Deloitte’s Life Science and Health Care national physician executive, says having physicians engaged and involved is critical for value-based care since their decisions impact treatment, costs, and quality, and he also contends that various stakeholders—health systems, health plans and biopharma and medical technology companies—should consider their role in helping physicians transform care delivery.

According to Abrams, the survey suggests many physicians conceptually endorse some of the main principles behind value-based care, such as quality and resource utilization measurement.

“They do support the overall concept of value-based care and delivering value to their patients,” he says. “The first element all physicians come out with is the importance of the Hippocratic Oath, and based upon that, to do no harm, they want to embrace value-based concepts. In that regard, I think what most people perceive as being value-based in the clinical environment, which is really good outcomes with minimal if any complications associated with those outcomes, I think they really want to provide that care at a very appropriate expenditure and use of resources. I think, by and large, most physicians are looking to achieve those ultimate goals.”

Abrams continued, “What’s lacking for them is a few things, one is the information. The absence of information makes it hard to make informed decisions, and the survey demonstrated the availability of accurate and reliable cost data, for example, makes it hard to choose. And, then, complicated by that, is some of the complexities that go into the way in which they are currently financially incentivized, which is to pursue high volumes of activity because that is how they are reimbursed. To move to the environment where they are paid for the overall value that’s developed, and ultimately paid on the basis of outcome success, is going to require not just a change in payment reform but a significant change in access to information and a focus on measures that really matter and that matter to the patients and also matter to the clinical outcomes.”

So, what can health care organizations do to stimulate wider adoption of value-based care and support physicians in practicing value-based care? A combination of financial incentives and data-driven tools and capabilities may help doctors to align their activities with value-based care principles, Abrams says.

And, Abrams contends that CIOs at healthcare systems and other healthcare delivery organizations have a strategic role to play in this effort.

“The CIOs are in a great position to help physicians in many, many ways. The CIOS and chief medical informatics officers (CMIOs) are in the position to be able to really help take all the data that’s been gathered and accumulated in their electronic health records (EHRs) and in their systems as they have connected inpatient and ambulatory environments, and as they have begun to collect appropriate cost of care data around episodes or bundles of care, or even just admissions and visits, the CMIOs and CIOs are in the position of taking that data and creating the analytical capability that allows us to turn data into information and information into action,” he says.

Specifically, the Deloitte report outlines three areas that healthcare industry stakeholders should focus on to facilitate physicians’ transition to value-based care delivery and payment models—tying compensation to performance, equipping physicians with the right tools to help them meet performance goals and investing in technology capabilities to connect and integrate the tools.

“To boil it down to where the intersection exists between the three areas, it comes in the form of partnering, finding opportunities to share relevant and timely information with each other and to embrace physicians as part of the solution to achieving enhanced value within the health system,” Abrams says. “At the core, care remains the cornerstone of the physician and their team, so the more we can include physicians on the advancement of clinical protocols, the development of relevant quality measures, the evaluation of the effectiveness of different care options is a great benefit for all sectors within life sciences and healthcare.”

Tying Physician Compensation to Performance

Currently, according to the report, value-based payment arrangements represent a relatively small source of physician compensation; three in 10 physicians now receive some compensation from value-based arrangements. Similarly to the consulting firm’s 2014 findings, a majority of physicians (more than 8 in 10) still report being compensated under fee-for-service (FFS) or salary. While physician participation in value-based payment models is increasing (30 percent in 2016 versus 25 percent in 2014), few physicians participate in models that have the greatest downside risk (10 percent in capitation and 4 percent in shared-risk arrangements).

Additionally, the survey found that 51 percent of physicians in the survey reported performance bonuses less than or equal to 10 percent of their compensation, and one-third reported that they were ineligible for performance bonuses.

The Deloitte report authors suggest that at least 20 percent of a physician’s compensation should be tied to performance goals.

“What we’ve seen and what the data supports is that in order to make incentive-based performance meaningful, it has to reach a certain threshold and 20 percent seems to be that threshold,” Abrams says. “If you’re going to begin to create an incentive-based performance management program for physicians, and I would say that this is more than physician compensation but also probably consistent with executive compensation as well, that 20 percent threshold is about where meaningful activation seems to rest.”

The Right Tools and Technology Capabilities

As mentioned above, a key finding in the physician-based survey is that tools to support value-based care vary in maturity and availability. While three in four physicians have clinical protocols, only 36 percent have access to comprehensive protocols, and only 20 percent of physicians receive data on care costs.

The survey findings demonstrated that physicians with access to some types of advanced capabilities, for example, clinical protocols and/or care pattern information, were less likely to say they feel underprepared for quality reporting requirements such as those considered under MACRA.

According to Abrams, physicians are looking for better clinical protocols and quality measures that align with their specialties. “They are absolutely looking for measures that are consistent with the patients that they care for. Giving people measures that are generic but aren’t relevant to the patients that they are caring for really doesn’t provide great benefit or value to anyone. So they want to focus on measures that really matter, and they want to have the tools to be able to interpret the information that’s being shared with them. They want those tools, particularly the decision support tools, that can help them make informed decisions and they want them to be readily available at the point of care,” he says.

Additionally, based on the survey findings, physicians want measures that emphasize outcomes rather than processes of care, and detailed data on their own performance and on physicians to whom they refer patients. The Deloitte survey findings suggest that many physicians currently lack these tools, but when made available, they impact performance.

“There is information that’s necessary to evaluate, for example, the true cost of care for an episode such as taking care of a patient with community-based pneumonia versus caring for a patient with pneumonia that requires hospitalization. They need the tools to be able to connect the ambulatory environment with the inpatient environment. They also need the tools to be able to analyze the effectiveness of treatment on those patients to ensure that the right course of treatment produces the optimal result and get some predictive value out of the information that’s been captured and stored, and also that they’ve got relevant cost information so they can make informed decisions,” Abrams says.

The survey findings also suggest that care pattern reports, which provide physicians with feedback on their clinical practices, are available to most physicians, but challenges still remain. Sixty-five percent of surveyed physicians reported receiving care pattern information, however, there are gaps between the reported availability and the perceived usefulness of these tools.

Specifically, physicians noted that care pattern reports should contain information on clinical outcomes, patient experience measures, and cost. In practice, though, physicians reported mostly receiving information on “process” measures, such as quality-of-care information, rather than clinical outcomes, according to the report.

When asked about improvements to care pattern reports, physicians cited that they would like the data to be adjusted for patient complexity or severity (60 percent), to be trustworthy and consistent with their experience (51 percent), and to have a stronger focus on outcomes instead of processes (36 percent).

The survey findings suggest that many physicians distrust the data they receive or find it difficult to integrate that data into their daily practices. “There’s a great deal of skepticism around the data, because the data is hard to validate, under many circumstances,” Abrams says. “Some of the proprietary reports that get into the public domain, the methods aren’t readily apparent and some of them are considered proprietary and, therefore, not available for physicians to be able to review and analyze so it’s generated a fair amount of concern as to the validity of some of that data.”

“And the second part of it is that,” he continues, there has always been a tension between the health plans, who have a lot of the claims data and the consumption data, but that information has not been shared readily with the provider community. The same goes for the provider community not as readily sharing the clinical data elements with the plans. I think that dynamic is beginning to change as we’re seeing more a recognition that providers and plans have to partner together if we’re truly going to be able to improve the value that our healthcare system is providing for the country.”

Under MACRA, performance on resource utilization and quality measure will be factors affecting the level of physician reimbursement in Medicare. The fact that only one in five physicians reported receiving resource utilization data points to the need to develop these reporting capabilities further, the report authors noted. Not only do physicians need to receive this type of information, but the data need to be presented in a way that is useful, easy to understand and actionable. Further, the report authors wrote, quality data used in setting performance benchmarks should be reliable, reproducible and focused on outcomes within physicians' control.

And Abrams suggests that it is the tools and technology, rather than the financial incentives, that will stimulate wider adoption of value-based care. “If we give physicians the right information that’s going to help them to provide better care to their patients and do so within their workflow that minimizes disruption to already busy and challenging days, we’ll see greater and greater results. The financial incentives help secure that, but they are not going to motivate it,” he says.

“Many physicians are not informed about MACRA. Many physicians who do know about MACRA, don’t understand it,” he admits. “It’s a complex law and set of regulations that have come with the final rule. I think many physicians aren’t prepared for what’s necessary relevant to reporting, which is part of the reason why CMS pushed back and loosened some of the reporting requirements for 2017. There’s more uncertainty than certainty about what it’s actually going to mean, and there’s still more information to be gleaned before physicians can clearly understand it.”

Currently, Abrams says he has seen “two camps” with how organizations are approaching their preparations for MACRA. “There are a set of organizations that have said, ‘We’re going to inform and educate our physicians early and often about what’s in MACRA even given the large number of uncertainties that exist.’ And there are other organizations that have said, ‘No, until we have more clarity about what it’s going to mean, we’re going to limit the amount of information around MACRA that we’re going to try to generate, because it’s going to create more concern on the part of physicians than it’s going to alleviate.’ So I think it’s very much a work in progress that is taking place.”

He adds, “I’d lean more toward the side of we should be sharing as much information with the physician community as we can and allowing them to generate more questions, which will allow us to be better and better informed as these models continue to evolve. There is no question that MACRA was designed to be disruptive and shielding physicians from that disruption likely is not going to do anybody any great service.”




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CMS: 93% of Clinicians Get Positive Payment Adjustments for MIPS Year 1

November 8, 2018
by Rajiv Leventhal, Managing Editor
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Ninety-three percent of MIPS (Merit-based Incentive Payment System)-eligible clinicians received a positive payment adjustment for their performance in 2017, and 95 percent overall avoided a negative payment adjustment, according to a CMS (Centers for Medicare & Medicaid Services) announcement today.

The first year of MIPS under MACRA’s Quality Payment Program (QPP) was dubbed by CMS as a “pick your pace year,” which essentially enabled clinicians to avoid payment penalties as long as they submitted at least the minimum amount of quality data. As such, in its announcement, CMS did admit that the overall performance threshold for MIPS was established at a relatively low level of three points, and the availability of “pick your pace” provided participation flexibility through three reporting options for clinicians: “test”, partial year, or full-year reporting.

CMS said that 93 percent of MIPS-eligible clinicians received a positive payment adjustment for their performance in 2017, and 95 percent overall avoided a negative payment adjustment. CMS specifically calculated that approximately 1.06 million MIPS-eligible clinicians in total will receive a MIPS payment adjustment, either positive, neutral, or negative. The payment adjustments for the 2017 program year get reflected in 2019.

Breaking down the 93 percent of participants that received a positive payment adjustment last year, 71 percent earned a positive payment adjustment and an adjustment for exceptional performance, while 22 percent earned a positive payment adjustment only. Meanwhile, just 5 percent of MIPS-eligible clinicians received a negative payment adjustment, and 2 percent received a neutral adjustment (no increase or decrease).

Of the total population, just over one million MIPS-eligible clinicians reported data as either an individual, as a part of a group, or through an Alternative Payment Model (APM), and received a neutral payment adjustment or better. Additionally, under the Advanced APM track, just more than 99,000 eligible clinicians earned Qualifying APM Participant (QP) status, according to the CMS data.

CMS Administrator Seema Verma noted on the first pick-your-pace year of the QPP, “This measured approach allowed more clinicians to successfully participate, which led to many clinicians exceeding the performance threshold and a wider distribution of positive payment adjustments. We expect that the gradual increases in the performance thresholds in future program years will create an evolving distribution of payment adjustments for high performing clinicians who continue to invest in improving quality and outcomes for beneficiaries.”

For 2018, the second year of the QPP, CMS raised the stakes for those participating clinicians. And in the third year of the program, set to start in January 2019, a final rule was just published with year three requirements. Undoubtedly, as time passes, eligible clinicians will be asked for greater participation at higher levels. At the same time, CMS continues to exempt certain clinicians who don’t meet a low-volume Medicare threshold.

Earlier this year, CMS said that 91 percent of all MIPS-eligible clinicians participated in the first year of the QPP, exceeding the agency’s internal goal.

What’s more, from a scoring perspective in 2017, the overall national mean score for MIPS-eligible clinicians was 74.01 points, and the national median was 88.97 points, on a 0 to 100 scale. Further breaking down the mean and median:

  • Clinicians participating in MIPS as individuals or groups (and not through an APM) received a mean score of 65.71 points and a median score of 83.04 points
  • Clinicians participating in MIPS through an APM received a mean score of 87.64 points and a median score of 91.67 points

Additionally, clinicians in small and rural practices who were not in APMs and who chose to participate in MIPS also performed well, CMS noted. On average, MIPS eligible clinicians in rural practices earned a mean score of 63.08 points, while clinicians in small practices received a mean score of 43.46 points.

Said Verma, “While we understand that challenges remain for clinicians in small practices, these results suggest that these clinicians and those in rural practices can successfully participate in the program. With these mean scores, clinicians in small and rural practices would still receive a neutral or positive payment adjustment for the 2017, 2018, and 2019 performance years due to the relatively modest performance thresholds that we have established. We will also continue to directly support these clinicians now and in future years of the program.”

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HHS Secretary Azar: HHS Is Planning New Mandatory Bundled Payment Models

November 8, 2018
by Heather Landi, Associate Editor
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The Centers for Medicare & Medicaid Services (CMS) is revisiting mandatory bundled payment models, possibly for radiation oncology and cardiac care, according to Health and Human Services Secretary Alex Azar, which signals a strong about-face in the Trump Administration’s policy about bundled payment initiatives.

HHS is reexamining the role that mandatory bundled payment models can play in the transition to value-based care, Azar said in a keynote speech at the Patient-Centered Primary Care Collaborative Conference on Thursday. HHS published Azar’s comments.

In the published remarks, Azar said the Trump Administration is revisiting mandatory bundled payments and exploring new voluntary bundled payments as part of the Administration’s goal of paying for outcomes, rather than process.

“We need results, American patients need change, and when we need mandatory models to deliver it, mandatory models are going to see a comeback,” Azar said.

In his speech, Azar said, “Imagine a system where physicians and other providers only had to worry about the outcome, rather than worrying about their staffing ratios and the individual reimbursements for every procedure they do and every drug they prescribe. That kind of payment system would radically reorient power in our healthcare system—away from the federal government and back to those closest to the patient.”

He continued, “One way we can do that is through bundling payments, rather than paying for every individual service. This is an area where you have already seen testing from CMMI for several years now—and I want to let you know today that you are going to see a lot more such ideas in the future.”

Azar highlighted the Bundled Payments for Care Improvement (BPCI), which, he said, has shown significant savings in several common inpatient episodes, including joint replacement and pneumonia.

During his speech on Thursday, Azar said, “I want to share with all of you for the first time today: We intend to revisit some of the episodic cardiac models that we pulled back, and are actively exploring new and improved episode-based models in other areas, including radiation oncology. We’re also actively looking at ways to build on the lessons and successes of the Comprehensive Care for Joint Replacement model.

“We’re not going to stop there: We will use all avenues available to us—including mandatory and voluntary episode-based payment models,” he said.

One industry group, the American Society for Radiation Oncology (ASTRO), already has voiced concerns about a mandatory payment model. In a statement issued Thursday afternoon, Laura Thevenot, CEO of ASTRO, made it clear that the organizaiton strongly supports a radiation oncology alternative payment model (RO-APM). "ASTRO has worked for many years to craft a viable payment model that would stabilize payments, drive adherence to nationally-recognized clinical guidelines and improve patient care. ASTRO believes its proposed RO-APM will allow radiation oncologists to participate fully in the transition to value-based care that both improves cancer outcomes and reduces costs."

Thevenot said ASTRO has aggressively pursued adoption of this proposed model with the Center for Medicare and Medicaid Innovation (CMMI). However, Thevenot said the group has concerns "about the possibility of launching a model that requires mandatory participation from all radiation oncology practices at the outset."

Further, Thevenot said any radiation oncology payment model will represent "a significant departure from the status quo." "Care must be taken to protect access to treatments for all radiation oncology patients and not disadvantage certain types of practices, particularly given the very high fixed costs of running a radiation oncology clinic," Thevenot stated.

Back in January, CMS announced the launch of the voluntary BPCI Advanced model, noting that it “builds on the earlier success of bundled payment models and is an important step in the move away from fee-for-service and towards paying for value.” The BPCI Advanced model includes more than 1,000 participants that are receiving episode-based payments for over 30 clinical areas, Azar said.

“BPCI Advanced is a voluntary model, where potential participants can select whether they want to join. But we’re not going to stick to voluntary models. Real experimentation with episodic bundles requires a willingness to try mandatory models. We know they are the most effective way to know whether these bundles can successfully save money and improve quality,” Azar said.

The Obama Administration introduced mandatory bundled payment for care for heart attacks and for cardiac bypass surgery in July 2016.

In the past, CMS Administrator Seema Verma has said that she does not support making bundled payments mandatory, and former HHS Secretary Tom Price, M.D. had strongly opposed mandatory bundles, going so far as to direct the end of two mandatory bundled payment programs—one existing and one previously announced. In November 2017, CMS finalized a rule, proposed in August 2017, that cancelled mandatory hip fracture and cardiac bundled payment models.

As per that final rule, CMS also scaled back the Comprehensive Care for Joint Replacement Model (CJR), specifically reducing the number of mandatory geographic areas participating in CJR from 67 areas to 34 areas. And, in an effort to address the unique needs of rural providers, the federal agency also made participation voluntary for all low-volume and rural hospitals participating in the model in all 67 geographic areas.

On Thursday, Azar acknowledged that his statements signaled HHS was reversing course on its previous stance, noting that last year the administration reduced the size of the CJR model and pulled back the other episode payment models, including those on cardiac care, before they could launch.

Azar, who was confirmed as HHS Secretary earlier this year, signaled early on that he diverged from Verma and Price on his views about mandatory bundled payments. During a Senate Finance Committee hearing in January on his nomination for HHS Secretary, he said, on the topic of CMMI [the Center for Medicare and Medicaid Innovation] pilot programs, “I believe that we need to be able to test hypotheses, and if we have to test a hypothesis, I want to be a reliable partner, I want to be collaborative in doing this, I want to be transparent, and follow appropriate procedures; but if to test a hypothesis there around changing our healthcare system, it needs to be mandatory there as opposed to voluntary, then so be it.”

During his speech Thursday, Azar pointed to the Administration’s first mandatory model, which was unveiled two weeks ago, called the International Pricing Index (IPI) Model for payments for Part B drugs. Azar said the model is a “mandatory model that will help address the inequity between what the U.S. and other countries pay for many costly drugs.”

Further, Azar said CMMI also will launch new primary care payment models before the end of the year, with the aim of introducing a spectrum of risk for primary care providers, Azar said.

“Before the end of this year, you will see new payment models coming forth from CMMI that will give primary care physicians more flexibility in how they care for their patients, while offering them significant rewards for successfully keeping them healthy and out of the hospital,” he said.

“Different sizes and types of practices can take on different levels of risk. As many of you know, even smaller practices want to be, and can be, compensated based on their patients’ outcomes,” he said. “We want to incentivize that, with a spectrum of flexibility, too: The more risk you are willing to take on, the less we’re going to micromanage your work.”

Azar also noted HHS’ efforts to examine impediments to care coordination, such as examining the Stark Law, the Anti-Kickback Statute, HIPAA, and 42 CFR Part 2. CMS has already launched and concluded a request for information on the Stark Law, and the Office of the Inspector General has done the same on the Anti-Kickback Statute, he noted.

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Dr. Sanjay Gupta’s Heartening Speech at CHIME18 Should Inspire U.S. Healthcare Leaders

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The story of an Amazonian tribe could serve as a motivational lesson for U.S. healthcare stakeholders

It was inspiring to hear Sanjay Gupta, M.D., the well-known neurosurgeon and medical reporter, give the closing keynote at the College of Healthcare Information Management Executives (CHIME) 2018 Fall CIO Forum in San Diego last week. Dr. Gupta, who serves as associate chief of the neurosurgery service at Grady Memorial Hospital in Atlanta, while also best known as CNN's multiple Emmy Award-winning chief medical correspondent, discussed the fascinating balance that he strikes between medicine and media.

“Oftentimes, I see people at their best, and sometimes at their worst. I get to travel the world, where I learn so much, but also teach others. Sometimes the dance between medicine and media can be awkward and emotionally challenging. But almost always, the stories we do have a significant impact,” Gupta told the Fall CIO Forum attendees.

What was perhaps most captivating about Gupta’s speech was when he spoke about visiting a primitive Amazonian tribe that appears to have the best heart health in the world. The Tsimane people of Bolivia do not speak a language, live a simple existence, and are disease-free, explained Gupta. So he went to visit the tribe with the goal to understand its lifestyle and what led to its members having such healthy hearts.  

Sanjay Gupta, M.D.

“I went spearfishing with one [tribe member], who thought he was 84-years-old, but he really didn’t know for sure. His shirt was off, and he was ripped, balancing himself on the canoe, just looking at the water, spearing fish. His eyesight was perfect. The entire indigenous tribe was just like this,” Gupta recalled.

After examining the Tsimane tribe’s diet, Gupta noted it was a hunter-gatherer society, meaning there was nothing technological. “The most mechanical thing I saw was a pulley for the well,” he said. Seventy percent of what they eat is carbohydrates—unrefined and unprocessed—while 15 percent of their diet is protein, and 15 percent fat, he added. “You need farmed food because oftentimes you don’t have successful hunting days, so the farmed food was the food in the bank. And they would do intermitting fasting, too. These are the people with the healthiest hearts in the world,” Gupta exclaimed.

When it comes to activity, when hunters are hunting, they’re never outrunning their prey, but rather outlasting it, noted Gupta. “We found that they walked about 17,000 steps per day. But they didn’t run; they only walked. They are active, but not intensively active. They also hardly every sit—they are either lying or standing all the time. And they would get nine hours of sleep per night, waking up to the rooster’s crow. There are no devices. Again, these are the people who have the healthiest hearts in world. They don’t have a healthcare system and don’t spend a dollar on healthcare,” Gupta stated.

What’s even more interesting about this tribe is that each of its members lives with some degree of a parasitic infection, which they usually get it early in life, have a few days of illness, and then just live with these parasites in their bodies for their entire lives. “The belief is that so much of the disease we talk about—that leads to this $3.3 trillion price tag [the total cost of U.S. healthcare spending in 2016]—is actually ignited or worsened by our immune systems. So the parasitic infections could be part of the reason they are protected from all types of diseases,” Gupta offered.

Essentially, it’s living this basic, undeveloped life that “inadvertently provides them extraordinary protection against heart disease,” noted a report in HealthDay last year. “Thanks to their unique lifestyle, most Tsimane [members] have arteries unclogged by the cholesterol plaques that drastically increase the risk of heart attack and stroke in modern Americans,” Gregory Thomas, M.D., medical director of the Memorial Care Heart & Vascular Institute at Long Beach Memorial, in California, said in that report.

Tsimane tribe (source: University of New Mexico)

You might be asking what the story of the Tsimane tribe has to do with U.S. healthcare since its lifestyle would obviously never be replicated in a developed country. And while that is true, it’s tough to ignore the $1 billion per day that our healthcare system spends on heart disease—compared to the Tsimane tribe that doesn’t spend a single dime, yet has the healthiest hearts in the world.

In this sense, perhaps we can use the Tsimane story to push ourselves to develop a greater understanding of why we spend so much money on healthcare and don’t have the results to show for it. Gupta asked this $3.3 trillion-dollar question in his speech—why does healthcare in the U.S. cost so much and what do we get in return?

“If you look at the statistics, it’s not impressive. More people die from preventable disease in the U.S. than in 12 other nations. People live longer in 30 other countries compared to the U.S.—including places like Chile and Costa Rica. We still have tens of millions of people who don’t have access, and we still spend all this money on healthcare. Why?” he asked.

Gupta explained that the nation’s high healthcare costs come down to the following: high administrative costs, technology, new drugs and development, and the cost of chronic disease—the last which is incredibly self-inflicted. About 70 to 80 percent of chronic disease is self-preventable, he said.

Indeed, as most of us know, about 5 percent of the U.S. population accounts for 50 percent of the healthcare costs. These are folks who are defined by illness, not by health, Gupta stated. This is why the modern-day healthcare system has proactively taken to targeting that 5 percent to improve their chances of preventing disease and staying healthy. “Data shows that home visits, nutritional counseling, one-on-one coaching, and diligent follow-up care can go a long way in preventing someone from getting sick in the first place, and from turning a disease into something more chronic. Some of these interventions can actually reverse disease. The die is not cast,” Gupta said.

For me, Gupta’s keynote highlighted the need for efforts around value-based care, care management, and population health to be intensified. A big part of that, as noted in the speech, is addressing patients’ social and environmental factors. It’s not at all surprising to see studies such as this one from earlier this year, conducted by researchers at the University of South Florida (USF) College of Public Health, Tampa, and WellCare Health Plans, and published in Population Health Management, which found that healthcare spending is substantially reduced when people are successfully connected to social services that address social barriers, or social determinants of health, such as secure housing, medical transportation, healthy food programs, and utility and financial assistance.

And with that, there is also an enormous opportunity for data and IT to play a role. Information sharing, so that providers have access to the right information at the point of care—no matter where the patient is—will be critical to reducing unnecessary costs. As will the robust use of data analytics, so that patient care organizations can be proactive in predicting which patients are at highest risk, when they might need services, and how to intervene at the appropriate time.

But to this point, Gupta, who noted that our society can get too caught up in high-tech, also suggested that “medicine seems to play by slightly different rules when it comes to innovation as opposed to other sectors. Sometimes, innovation moves painstakingly slow in respect to medicine.” At the end of the day, he said, it will be “the innovations that make us, [as a society], healthier, happier, and connect us in frictionless ways, that will be the biggest winners.”

So, will the U.S. population suddenly turn off their iPhone alarms, wake up to the rooster’s crow, and become a hunter-gatherer society? No, I would say that’s quite unlikely to happen. But hearing stories such as the one of the Tsimane tribe might just serve as good enough motivation to bring down the astronomical and unsustainable costs of U.S. healthcare.

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