This is the first post in our three-part series on proactive healthcare. Check out parts two and three, where we discuss what healthcare providers must do to commit to proactive health and the challenges they face in doing so.
For decades, both the healthcare industry and U.S. government have focused on managing healthcare costs, quality, and access. However, the U.S. healthcare system is still far off from optimizing improvement in any one of these three areas. It’s clear to see why when you consider the following:
- Healthcare costs rose at double the rate of inflation in the 1990s and were again on the rise in the early 2000s. By 2016, U.S. healthcare spending reached over $3.3 trillion, or $10,348 per person, accounting for 17.9 percent of GDP.
- From a quality perspective, technologies such as the electronic health record (EHR) have helped providers enhance the quality of care by improving diagnoses and treatments with fewer errors. Fortunately, government intervention helped make the EMR a reality, particularly the Patient Protection & Affordable Care Act (ACA) enacted in 2010. Now, over 99 percent of hospitals in the U.S. use EHR systems. Unfortunately, as a single tool, the EMR does not solve all of the problems in the “cost, quality, and access” continuum.
- The U.S. has made many attempts to improve patients’ access to healthcare. The HMO Act of 1973 and the promotion of more liberal HMOs and preferred-provider organizations in later years improved access to some extent but it also increased costs.
- A key objective of the ACA was to open up access to healthcare services and better manage costs by addressing the insurance part of the access equation. Now, although some progress was made, the jury is still out as to whether the ACA will meet the access objective.
The ACA also embraced the concept of the Accountable Care Organization (ACO), encouraging hospitals and doctors to form networks to reduce costs and deliver coordinated care to Medicare patients. As of August, there were 649 Medicare ACOs and 38 million beneficiaries.
It is expected that ACOs will play a crucial role in moving the U.S. healthcare system from a fee-for-service and volume-based model to a value-based model. Obviously, the EHR is a critical technology element that can drive ACO success, but providers are learning that they need more than comprehensive patient information to be a successful ACO.
Reactive vs. Proactive: The Movement from Volume to Value-Based Healthcare
While the creation of HMOs, PPOs, the implementation of EHRs, and the ACA have contributed to improved population health to varying degrees, these “solutions” focus on a single encounter. You may have the flu today and be able walk into an urgent care center for treatment, but one visit does not help you stay healthy.
We label this scenario “reactive health.”
According to some estimates, reactive health accounts for more than 75% of healthcare spending in the U.S. A main contributor is chronic disease like heart disease or diabetes, which account for the majority of reactive health spending and are responsible for 7 of every 10 deaths in the United States. However, many chronic diseases are either largely preventable or fairly easily managed if patients prioritize preventive care and work closely with their providers.
Approaching chronic conditions reactively does patients a disservice on two main fronts: first, reactive care does not work to stop them from getting sick or experiencing unpleasant symptoms in the first place. Second, reactive care is typically more expensive than what preventive care would have cost.
Historically, both health systems and patients viewed reactive care as the only option, mostly because of perceived financial barriers like copayments and deductibles. Additionally, fee-for-service payments models caused healthcare organizations to prioritize the sheer volume of patients served, reducing their focus on holistic patient care.
The antithesis of “reactive health” is “proactive health.” Many consumers think, and many caregivers stress, that proactive health happens when a consumer takes responsibility to proactively manage his own health – moving away from the physician “treating an ailment or disease” to a patient practicing “self-care” activities such as exercising, taking prescribed medications and vitamins, drinking water, watching their weight, eating healthy, scheduling annual exams, and so on.
For a proactive healthcare model to work, a consumer must be compliant and commit to self-care. However, what few consumers realize is that the provider also has a responsibility to proactively manage the patient’s health – prevent disease, detect disease early, and improve healthcare results.
This is why Evariant defines proactive health as:
“A commitment between a provider and a patient, where both parties take an active role in managing the patient’s health to keep the patient healthy.”
Keep in mind another key benefit of proactive health—improved patient retention rates. Retention is vital for health system success; it typically costs 5 to 25 times more to attract a new customer than retain an existing one, and a small 5 percent increase in customer retention produces a 25 percent increase in profit. Proactive healthcare increases retention rates and extends patient lifetime value by engaging patients throughout their lifetimes, transforming them from potential one-time customers to patients for life.