Business of healthcare will demand providers treat patients as customers
In the future, successful doctors, hospitals and health systems will shift their activities from delivering health services within their walls toward a broader range of approaches that deliver health, which will require providers to become less product-oriented and more customer-oriented.
So stated an editorial in the New England Journal of Medicine, by David A. Asch, MD, MBA, and Kevin G. Volpp, MD, PhD, from the Center for Health Equity Research and Promotion, Philadelphia Veterans Affairs Medical Center; the Penn Medicine Center for Innovation; and the Wharton School, University of Pennsylvania—all in Philadelphia.
Drawing on examples from failed business models, such as Eastman Kodak, Asch and Volpp noted that it is better to define a business by what consumers want rather than by what a company can produce.
“The analogous situation in healthcare is that whereas doctors and hospitals focus on producing healthcare, what people really want is health,” they wrote in the Sept. 6 editorial. “Healthcare is just a means to that end—and an increasingly expensive one. If we could get better health some other way … then maybe we wouldn't have to rely so much on healthcare.”
To that end, Asch and Volpp suggested that there are three signals that healthcare could be missing.
One, “while much of recent U.S. medical practice proceeds as if health and disease were entirely biologic, our understanding of health's social determinants has become deeper and more convincing,” they wrote. “An enormous body of literature supports the view that differences in health are determined as much by the social circumstances that underlie them as by the biologic processes that mediate them.”
Second, while traditionally there has been an implicit presumption that doctors and hospitals provide healthcare of consistently high quality, that presumption is now being challenged, as a result, “we're getting much better at identifying, measuring, reporting and targeting health outcomes.”
For decades, health plans, states and the federal government have published quality data at the levels of conditions, populations, physicians and hospitals. Some of these data reflect processes—for example, which hospitals are better at giving aspirin to patients with acute MI—but more often data reflect outcomes, not just for patients within hospitals but for the populations surrounding them.
Also, the Mobilizing Action toward Community Health project has been publishing ratings of county-level population health. Finally, employers increasingly focus on employee wellness, on one side, and disease management, on the other. Research funding increasingly supports efforts to improve these measures and effectively communicate outcomes.
“This trend reveals an interest in what ultimately happens to individuals and populations,” Asch and Volpp wrote.
Third, healthcare financing is testing the pathways as well, in that payers will not reimburse for preventable readmissions and bundled payments will be issued for goals or episodes of care rather than visits. “Today's standard approach of reimbursing for office visits and hospitalizations is likely to be displaced once better measures of outcomes can provide a substitute that's more relevant to our key goals. If we can measure success, why pay for process?” they wrote.
“Doctors and hospitals who pay attention to the business they are actually in—defined by the outcomes their ‘customers’ seek—will leave the doctors and hospitals who don't behind,” they concluded.
So stated an editorial in the New England Journal of Medicine, by David A. Asch, MD, MBA, and Kevin G. Volpp, MD, PhD, from the Center for Health Equity Research and Promotion, Philadelphia Veterans Affairs Medical Center; the Penn Medicine Center for Innovation; and the Wharton School, University of Pennsylvania—all in Philadelphia.
Drawing on examples from failed business models, such as Eastman Kodak, Asch and Volpp noted that it is better to define a business by what consumers want rather than by what a company can produce.
“The analogous situation in healthcare is that whereas doctors and hospitals focus on producing healthcare, what people really want is health,” they wrote in the Sept. 6 editorial. “Healthcare is just a means to that end—and an increasingly expensive one. If we could get better health some other way … then maybe we wouldn't have to rely so much on healthcare.”
To that end, Asch and Volpp suggested that there are three signals that healthcare could be missing.
One, “while much of recent U.S. medical practice proceeds as if health and disease were entirely biologic, our understanding of health's social determinants has become deeper and more convincing,” they wrote. “An enormous body of literature supports the view that differences in health are determined as much by the social circumstances that underlie them as by the biologic processes that mediate them.”
Second, while traditionally there has been an implicit presumption that doctors and hospitals provide healthcare of consistently high quality, that presumption is now being challenged, as a result, “we're getting much better at identifying, measuring, reporting and targeting health outcomes.”
For decades, health plans, states and the federal government have published quality data at the levels of conditions, populations, physicians and hospitals. Some of these data reflect processes—for example, which hospitals are better at giving aspirin to patients with acute MI—but more often data reflect outcomes, not just for patients within hospitals but for the populations surrounding them.
Also, the Mobilizing Action toward Community Health project has been publishing ratings of county-level population health. Finally, employers increasingly focus on employee wellness, on one side, and disease management, on the other. Research funding increasingly supports efforts to improve these measures and effectively communicate outcomes.
“This trend reveals an interest in what ultimately happens to individuals and populations,” Asch and Volpp wrote.
Third, healthcare financing is testing the pathways as well, in that payers will not reimburse for preventable readmissions and bundled payments will be issued for goals or episodes of care rather than visits. “Today's standard approach of reimbursing for office visits and hospitalizations is likely to be displaced once better measures of outcomes can provide a substitute that's more relevant to our key goals. If we can measure success, why pay for process?” they wrote.
“Doctors and hospitals who pay attention to the business they are actually in—defined by the outcomes their ‘customers’ seek—will leave the doctors and hospitals who don't behind,” they concluded.