In the wake of the tragic murder of Brian Thompson, CEO of United Healthcare last week in Manhattan, many people are speaking out about the dysfunction of the U.S. Healthcare system, while at the same time criticizing Mr. Thompson and focusing on the private insurance industry. Brian Thompson is not to blame for the system we have today and there is no justification whatsoever for what happened to him. We send our condolences to his family.
That said, the system we have today in the U.S. is indeed broken and has been for years. People’s frustrations are justified.
We see it across all areas of healthcare, and we see it in behavioral health here at SunCloud. A quick look at the graph below shows one of many pieces of data showing just how broken the healthcare system is. The U.S. spends significantly more on healthcare than any other “large, wealthy country” and yet our life expectancy is the lowest.
In 2013, Michael Porter and Thomas H. Lee published an article in Harvard Business Review titled, “The Strategy That Will Fix Healthcare”.
It gives the reader a clear understanding of what is broken and a proposed strategy to fix it. In 2006, Porter and Elizabeth Teisberg wrote a book titled “Redefining Healthcare” in which they introduce the “value agenda”, which will require how healthcare delivery is organized, measured, and reimbursed. Porter and his team at Harvard Business and Medical School were pioneers in arguing for a shift from quantity to quality, where VALUE is what drives the process, and value is defined as outcomes that matter to patients/dollars spent.
In 2006, when this conversation was well underway, Thompson had just recently joined United Healthcare (UHC).
Before joining UHC, he was a CPA with PwC and held multiple positions within UHC before becoming CEO including financial controller, CFO, and a director in the company’s corporate development division. He is described by some as being “low key” and appears to have had some interest in the transition to a “value agenda”. At an investor meeting last year, he outlined UnitedHealth’s shift to “value-based care,” paying doctors and other caregivers to keep patients healthy, rather than focusing on treating them when they get sick. “Health care should be easier for people,” Thompson said at the time. “We are cognizant of the challenges. But navigating a future through value-based care unlocks a situation where the… family doesn’t have to make the decisions on their own.”
The system is broken, and UHC is indeed making a lot of money.
A big component of the “value agenda” includes the use of standardized outcomes. Outcomes are used to measure quality, and to be useful they need to be standardized and risk-adjusted (which is tough, especially in mental health!). In mental health, addiction, and eating disorder treatment today, unfortunately, there are no standardized outcomes available for payers or prospective patients. Payers don’t have much interest in data beyond utilization numbers which include length of stay and readmission. While readmission data can be useful, it is pretty discouraging that providers are rewarded for shorter lengths of stay regardless of the quality provided and the progress of the patient. Many providers collect their own outcome data and often publish it on their websites as a form of marketing. Yet to be truly useful for payers or patients, this data needs to be comparative so payers can use it to set prices and patients can use it to make decisions on where to seek care and why. I don’t quite understand why payers are not more interested in standardized outcomes, but for providers providing mediocre care, I understand why they might not want this.
Some other areas of healthcare have embraced the shift toward value, and it is paying off. Institutions such as Cleveland Clinic and Maya Clinic have been at the forefront of the shift, in primary care, diabetes, heart failure, oncology and specialty care. Findings from a November, 2023 Human Report show”
Patients receiving health care under value-based care arrangements grew by 2.3 million over the past decade.
- 2022 showed a record 70% of Individual Medicare Advantage patients aligned with value-based care providers.
- Value-based care patients were less likely to spend time in the hospital. There were 30.1% fewer in-patient admissions for value-based care patients compared with Original Medicare beneficiaries in 2022.
- Value-based care patients were more likely to receive preventive care. Specifically, value-based care patients completed preventive screenings at a 14.6% higher rate than Medicare Advantage members not in a value-based care arrangement.
- Value-based care arrangements lead to cost savings for patients. In 2022, Humana Medicare Advantage Value-Based contractual arrangements saved 23.2% in medical costs compared to Original Medicare.
- Humana research found that patients cared for by VBC physicians had significantly lower acute care usage and potentially avoidable events.
- Humana invests cost savings into more member benefits, averaging $527 annually for members who see VBC providers.
Unfortunately there has been very little progress toward value in mental health and addiction treatment. Because we do not have standardized outcomes in behavioral health treatment, we are firmly stuck in quantity over quality. Patients suffer, their families suffer, and the good providers doing high-quality work suffer.
While it may appear that payers benefit in the short term, research from countless studies shows that investing in behavioral health treatment ultimately saves significant amounts of money on future healthcare costs. Cigna, one of America’s largest private insurance companies, conducted a study showing that, “of approximately 275,000 customers found that people diagnosed with a behavioral health condition, such as anxiety, depression, or substance use disorder, who receive outpatient care had lower total health care costs by up to $1,377 per person in the first year after treatment. The savings impact was sustainable, with a two-year cost reduction of up to $3,109 per person.” https://www.evernorth.com/behavioral-health-study.
This study was focused on outpatient care and no other level of care, being that outpatient care is the least expensive care option. Yet these findings show the long-term financial value for companies like Cigna of addressing patients’ behavioral health needs.
The explosion of frustration directed at the healthcare system in the wake of this tragic incident is understandable. We are hopeful that this will lead to some change. We certainly would appreciate more focus on value in our industry at SunCloud Health. We provide high-quality care and make investments that need to be made even when our financial customer does not recognize nor reward for them.
At SunCloud Health, we collect alot of outcomes measurements and are available to share them with whomever might want to look at them.
The payers we work with have shown little to no interest in outcomes unfortunately. Sometimes a savvy patient wants to look at them but because there is nothing to compare them to, they are not as useful as we would like them to be. In behavioral health, we live and breathe prior authorizations all day long. And claim denials and all of it. The system as it stands today is broken in many ways, and yet there are ways to fix it. Thompson was spot on when he discussed value-based care at last year’s investor conference. Hopefully in his legacy, all of us, including UHC, will work together to fix our broken system and continue to make the shift toward a system squarely focused on value, because when that is done patients, payers and providers’ interests will align and patients, and the lives of patients and their families will improve.
