Joe Swedish says a revolution in healthcare is heating up and it will be dependent on a rapidly evolving tech landscape through big data, social networks, and personal connectivity.
"Revolutions happen because the status quo is unacceptable," says Joe Swedish, CEO of WellPoint Inc. one of the nation's largest health insurers, with 36 million health plan members. With healthcare on pace to soon consume one fifth of the nation's GDP, "today's healthcare environment is unacceptable."
Maybe so, but let's be honest, the status quo has been unacceptable for years. Over the past 10 years, healthcare costs borne directly by the patient have doubled while incomes have grown only 4%. If that's not fertile ground for a revolution, I don't know what is.
One of the key problems, however, is that until recently, there have been few weapons with which to stage such a revolution.
Swedish was the keynote speaker for the Malcolm T. McEachern Memorial Lecture and Luncheon at the 2014 Congress on Healthcare Leadership presented by the American College of Healthcare Executives in Chicago. What's different now, he says, is that the convergence of data and the technological gizmos that allow real-time intervention based on that data are now nearly ready for widespread adoption.
One of the reasons (and there are literally hundreds) healthcare is so expensive is that because of a lack of good data, physicians and other clinical caregivers had long been reduced to an educated guessing game on how to treat a patient's problem, which might be serious, and which might not, unless that patient was sitting right in front of them—maybe in the ED.
Another way to describe the magnitude of the coming transformation is that the art of medicine is changing to the science of medicine. With devices and data now available to nearly instantaneously guide clinicians on how to proceed, often without the patient having to physically visit a site of care, vast amounts of staff time and expensive interventions can be avoided.
Not an Insurer
That's one reason Swedish, the former president and CEO of Trinity Health, doesn't like to use the word "insurer" when referring to his company. Instead, he calls it a health benefits company. As such, he wants his organization to lead the deployment of data-dependent decision-making tools and monitoring devices that he says have the potential to not only reduce the cost of providing care, but also to improve patient outcomes.
Asking the audience to use their imagination, he described a patient whose EKG readings are being continuously monitored. Whose blood pressure, blood sugar, and any number of other vital signs are also being continuously monitored. You might envision that person in the intensive care unit of a major trauma center. But no, Swedish says such patients might be sleeping in their own bed at home.
"Connecting via smartphone is a preview of the changes we'll see in healthcare in our lifetime," Swedish told the audience of healthcare executives. "It's not just evolutionary, but revolutionary."
The contemporary consumer wants information to make informed purchase decisions, and wants access through a variety of forums. Further, they want this info shared with someone who can help them.
Integration Lacking
Swedish argues that there is a lack of integration and context for such information, but the revolution in healthcare will be dependent on a rapidly evolving tech landscape through big data, social networks, and personal connectivity.
"Currently 4 billion people on earth don't have access to doctor, but 2 billion of them have access to a smartphone," he says. "There are great advances in data mining that lead to decision making that is fast, accurate, and predictive."
Wellpoint, like many peers, is leveraging these through consumerism, data and analytics to incentivize patients and healthcare providers to make smart choices that will revolutionize the marketplace in ways that are unpredictable.
Swedish, formerly CEO of Centura Health and before that Trinity Health, spent most of his 40-year career on the "other side" as a hospital or health system executive, argues that the modern health plan has to be much more than a payer. The so-called consumer-driven, high-deductible health plan-based member makes up one fifth of Wellpoint's membership, and that number is trending higher.
"They have skin in the game and are more engaged, which means we need to create tools that promote value-based decision making," he says.
Evidence of the revolution is abundant even now, says Swedish, whose company partnered with CalPERS, the state of California's retiree benefits agency, to establish so-called "reference pricing" for expensive hip and knee replacement procedures. Reference pricing helps employers set the maximum they will pay for a procedure based on aggregation and analysis of prices for specific procedures from hospitals and health systems across the state.
Revolutionary Pricing
Swedish says the range in price for one common procedure was between $15,000 and $110,000 with no evidence of differentiation of quality. As a result, CalPERS established that it would pay up to $30,000 for the procedure, but that beneficiaries would be responsible for paying any costs over that amount.
CalPERS costs (per related surgical admission) dropped by 20% "overnight," Swedish says.
That's an example of a simple revolution that would have been impossible just a few years ago.
Another innovation that is part of the revolution Swedish says is here is exemplified in WellPoint's partnership with IBM to use its Watson technology in both utilization management and in oncology services to process preauthorization requests.
WellPoint employees "fed" Watson 25,000 real-life scenarios to help train the technology in how to apply WellPoint policies and clinical guidelines. By the end of last year, a third of the company's nurses were using Watson to make decisions, and more than 3,500 physicians were receiving real time authorizations for things that used to take days.
"As a health plan, our responsibility is to be the connective tissue that binds the ecosystem," Swedish says. "Relationships have to be based on trust and transparency. Our role puts us at the hub of the ecosystem as a convener and collaborator."
Information is the lifeblood of this revolution, says Swedish, who adds that the ability of consumers, providers and employers to access information they need to act will lead to better choices.
"This revolution may one day be as impactful as the discovery of penicillin," Swedish says. "There's vast potential to save lives and transform healthcare and health for millions of people."
Of course revolutions have victims too. Hospitals and other healthcare providers that don't heed the call to reduce waste and compete on cost and quality will fall by the wayside.
Competition tends to do that. Bring it on.
Philip Betbeze is the senior leadership editor at HealthLeaders.