By Tom Schramski, PhD, CM&AA
Volume 2 Issue 26, December 22, 2015
Most of us are overwhelmed by the myriad possibilities for the future in our healthcare marketplace. Unprecedented innovation and the demands for true integrated wellness are being thrust forward at a dizzying pace in the economics of our new world. Investors are leaping in with billions of “dry powder” dollars and all of us are trying to estimate the future with accuracy: what does 2016 and beyond hold for American healthcare?
Nate Silver, the prognosticator extraordinaire of FiveThirtyEight.com, recently wrote “the signal is the truth, the noise is what distracts us from the truth.” Although he wasn’t speaking specifically of healthcare marketplace challenges, there are so many biased bets in the noise that it makes sense to step back to appreciate the signals.
Hear are seven of the strongest signals that we see:
Give Us The Facts
Healthcare payers and customers require that all interventions be acknowledged as best practices with research to support efficacy. The label itself is not enough and all practices must withstand the “open the kimono” test. Are you really practicing what you preach?
Office Visits Are Not Outcomes
For more than 50 years, American healthcare economics have been built on the premise that office visits have critical value. Originally designed to provide convenience and efficiency for physicians, the focus will increasingly be placed on what provides value in results, such as the CMS Independence At Home demonstration project.
Aging baby boomers are unwilling to accept what their traditionalist parents acquiesced to: their healthcare options are determined by payers. They have made it very clear that they require a more robust array of options and they will continue to fuel an expansive view of what wellness should mean in our society.
The Third World Advances The First World
Third World innovation, from newly designed hospitals in India to medical tourism and creative health management practices, have positively impacted services and products in the US, especially urgent care centers. This innovation will also continue to affect the development of technology such as the portable imaging devices common in many American clinics today.
My Home, Your Clinic
As Peter Pilch noted in a recent BDO report, “site neutrality” will be favored because the best outcomes for diverse medical conditions don’t require inpatient or more restrictive settings – and that includes substance abuse treatment. Reimbursement pressure and treatment generalization research are supporting this perspective for different reasons.
New Normal Economics
As new analytics emerge, publicly funded services are receiving a new scrutiny that appears less bound by politics and more attentive to the best value delivered for the dollar. This view will likely be advanced in the growing number of public and private provider partnerships now underway.
The Re-Creation Of Health Insurance
As more healthcare services and products are scrutinized in managed care environments, there is increased dissatisfaction with how today’s commercial insurance models force a ‘gaming’ of healthcare expenses, making it extremely difficult to understand what products and service cost. The best business models in America have a level of transparency that is nearly absent in our healthcare system.
Seen collectively, these signals are unmistakable: we want to know the results; we want to have a role in determining our full list of options; we want to know the cost; and we want to make our own informed choices. As Nate Silver went on to say, “distinguishing the signal from the noise requires both scientific knowledge and self-knowledge.”
We have undoubtedly made great advances in healthcare and the next wave of innovation will incorporate this data. But more profound action may be led by our emerging assumption that we can drive change by what we believe is the truth amidst the noise. Something for entrepreneurs and investors to consider with their “dry powder” gambling.
Tom was the Founder and Managing Partner of VERTESS. He was a Certified Merger & Acquisition Advisor (CM&AA), consultant, and Licensed Psychologist with over 35 years of very successful national experience in the healthcare marketplace, including co-founding and building a $25 million behavioral health/disabilities services company. Tom represented sellers and investors across the healthcare spectrum and was recognized for his executive leadership in the 2005 Entrepreneur of the Year issue of Inc. Tom passed away in December 2018.