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Deloitte's Life Sciences & Health Care Blog

A modern strategy for population health

When Henry Ford built the Model T, he chose a different path from his competitors who were interested mostly in manufacturing cars for the wealthy. Ford wanted to build a lower-cost, more efficient car that was affordable to the largest possible pool of customers.

The Model T sits today in museums and in our collective memory. But Ford’s ground-breaking automotive strategy has important lessons for the health care industry; in this case, improving the integration and delivery of population health affordably across the full spectrum of health care and the life sciences.

The ability to compete in the marketplace depends on the efficient use of resources, in support of competitive business strategies that are financially sound and provide the best product to the widest possible audience in the most expedient manner.

In our industry, no one completely understands how to unlock the value of caring for a population. We still depend heavily on the fee-for-service (FFS) model. FFS will always be a part of the process, but we are presented with myriad new opportunities to modernize and improve population health care.

Who are the Henry Fords of the 21st century health care industry? The leaders who ask the right questions, take healthy and informed risks, and rely on the expertise of innovators to help generate ideas that benefit the enterprise, the industry, and the consumer. But more than that, they are the leaders who understand that the health plan isn’t the end game, but an engine of change in the push for population health models based on value over volume.

To map their journey, health care organizations should be asking the following questions:

  • How does it create more opportunities for my business and my customers?
  • How am I going to finance this transformation?
  • What kind of new, more adaptive business models and collaborative partnerships should we be considering?

Many of our clients and other stakeholders are devising strategies that involve new and intriguing partnerships. Provider-sponsored health plans are making more of a splash as a model for cutting costs, tailoring medical coverage to specific needs, and giving providers more of a say in financing care.

At last estimate, there are more than 200 provider-sponsored health plans in the United States, and roughly 170 non-provider-sponsored plans (NPS). But NPS plans make up 90 percent of the market.1 With the right guidance, there is room for growth, whether they move to acquire unaffiliated health plans or expand on the commitments of providers developing their own programs.

Meeting these population health challenges is also a matter of changing practices and emphasizing efficiencies. Many experts agree that the current way health care is delivered in the US contains too much waste—with some stating that as much as 30 percent of care delivered is duplicative or unnecessary and may not improve people’s health.

According to the National Institute for Health Care Management Research and Educational Foundation, “For the overall civilian population living in the community, the latest data indicate that more than 20 percent of all personal health care spending in 2009 — or $275 billion — was on behalf of just 1 percent of the population…and the top 5 percent are responsible for 38 percent of spending.” So keeping patients on track without a variation in the quality of care is an ongoing learning experience.

Consider these variables: Is seeing a doctor for five minutes necessary, or cost-efficient? Wouldn’t a phone consult serve equally well? What are the benefits of expanding telemedicine? Do wearable technologies promise an effective means of data sharing or patient monitoring?

There is no shortage of critical questions for health care participants in determining what tools will work best and how they can applied across the entire health care ecosystem.

Organizations that aren’t asking the right questions and implementing the right solutions when it comes to population health could one day find themselves going the way of the Model T.

Source: 1 AIS’s Directory of Health Plans: 2015


Author bio

Bill Copeland, Vice Chairman of Deloitte LLP, is a 27-year Deloitte veteran and leads the US Life Sciences & Health Care Practice. Previously, Bill was practice leader for the health reform initiative, focused on serving clients’ needs around the incredible changes resulting from the Affordable Care Act. He was also National Managing Director of our Life Sciences & Health Care Industry Consulting Practice and managed the Health Plans Consulting Practice.