Value in Healthcare

Value in Healthcare

A common complaint about healthcare in the United States is that it has traditionally operated on a fee for service (FFS) based model. It is a natural and easy to understand system, and generally the type of system that both patients and providers prefer. The idea is that you pay for the services you receive from a healthcare provider. So if you need a tooth extracted, you go and have the tooth extracted and pay for the extraction. If you need a skin check, you go and get a skin check and pay for it. However, this FFS model can encourage a lot of waste through unnecessary medical procedures, and the value in healthcare is sometimes lost when we wait until someone has a problem before we help them with their health.

 

A lot of government programs, employers, and insurance companies are making efforts to push against FFS in an effort to provide greater value in the healthcare services we pay for, but it is worth asking, what is value and how can healthcare systems provide it? Is value just better health? Is it services that a patient said they were happy about? Is it care that saves a life or can it just be care that makes a life somewhat more comfortable? Dave Chase helps explain one aspect of value in healthcare in his book The Opioid Crisis Wake-Up Call, “Value is defined as the ratio of quality to cost. Value increases as the quality of the care increases or the cost of care decreases.”

 

FFS encourages short appointments where doctors cram as much as they can bill for into the shortest possible time before moving on to the next patient to do the same. Value based models, on the other hand, seek to improve the quality of the care provided without adding more costs to the patient and their insurer. As opposed to simply cramming in more tests, treatments, and procedures to get more money, value based systems that increase quality focus on improving health outcomes while keeping costs stable.

 

Alternatively, value based models might seek to keep quality the same, but reduce overall costs. This can wade into territory we don’t necessarily want to support, such as cutting nurse management staff to keep overhead low, but it could also look like more comprehensive care to reduce costly re-admissions after a procedure. When we think about value and try to build systems around value, we ultimately have to think about quality and cost, and how those are related. We can cut pieces out of the system that are just meant for signaling and cut pieces out that might be unnecessary without diminishing quality. But at the same time, we really need to examine whether the pieces we want to cut really do help with the quality of the care, especially over the long run.

 

Thinking about value in healthcare isn’t entirely new, but it is receiving increased focus, which is important if we want to have a healthcare system that people actually trust and are willing to engage with when necessary.
Health Care Supply

Health Care Supply

Dave Chase makes an argument in his book The Opioid Crisis Wake-Up Call that healthcare has a substantial supply side drive, not just a demand side drive. This argument doesn’t align with standard pictures of healthcare, the idea that people seek care when they are sick, and don’t use care when they are well. Its troubling, but evidence does support the idea that the healthcare market is in some very important ways a supply driven market, meaning that as supply and capacity increases, demand also increases.

 

I’m not completely sure I understand this idea, but it is important for us to acknowledge and think about, especially if we live in growing cities, gentrifying regions of the country, and areas of the United States that have real opportunities for reinvention. When looking to the future of healthcare in the United States, Chase includes many elements from Bruce Katz and Jeremy Nowak’s book The New Localism and thinks there is an important role for new models of city and local government to play in shaping local healthcare ecosystems. He is also heavily influenced by Jim Clifton’s book The Coming Jobs War and the importance that local communities invest in sectors that are likely to be highly productive in the future. Chase writes,

 

“Sooner rather than later, we can expect other developments along the same 3.0 spectrum [More info on Economic Development 3.0 here]. Cities will incorporate true health needs into mater planning and review building permit applications with a deep understanding that health care is a supply-driven market. The more supply there is, the more demand will increase, with little regard for value and community well-being. Approving more health care build-out virtually guarantees a massive burden on local citizens.”

 

It is important that we think about what it is in healthcare that actually provides value. If simply adding more healthcare capacity will lead to greater demand and utilization, then we need to take steps to ensure that an uptick in services is actually accompanied by improvements in health. When communities are redeveloping and growing, they should be focused on upstream social determinants of health rather than just hospitals and healthcare service buildings. Designing communities that will have ample green space for outdoor activity, that will control noise, and will have well lit parks and outdoor areas will help build healthy communities. Plopping a hospital in a space that doesn’t include these elements might give people a place to go when they are stressed, overweight, and injured by debris in the streets, but it will not help people actually live healthier, it will capitalize on a broken environment that fails to support health.

 

I think that is part of the idea that Chase argues for. We should maintain the healthcare capacity and services which actually improve health, and we should be weary of systems that provide healthcare but fail to demonstrate real health improvements for citizens and communities.
Thoughts on Health Insurance Companies

Thoughts on Health Insurance Companies

Moving to a universal healthcare system with everything run by the Federal government might not solve all the problems in our healthcare system, and it might not really reduce all of our healthcare costs, but at least it would give us someone to hold accountable for rising costs, challenges with accessing care, and questionable quality of care. People across the United States are frustrated by healthcare providers and systems that seem to always be raising their costs and charging outrageous fees for basic medical care. Younger people today seem to find the idea of profiting on medical care to be slightly unethical, and health insurance company practices do a lot to increase people’s discontent with the current system and actors. In short, a lot of people probably just want to move to universal coverage provided by the government just to simplify the process and cut out insurance companies, especially when the average consumer can’t understand what benefit the insurance company provides.

 

These thoughts about our discontent with our current system came to mind this morning after reading the following passage that I highlighted in Dave Chase’s book The Opioid Crisis Wake-Up Call. Chase writes, “If you’re a fully insured employer and have higher-than-expected claims in one year, your insurance carrier will work to get as much back as possible in subsequent years through larger premium increases.”

 

What Chase describes is something that not everyone is directly aware of or able to explain, but it is something many of us have a vague feeling of or intuitive expectation of. Rather than existing as organizations to help us be healthy, rather than trying to solve a problem, rather than caring about our health needs, many people simply see health insurance as stealing a few bucks from them, their employers, their providers, and from people who really need medical care. Insurance companies are seen as morally unethical, powerful government lobbiers, and as bureaucratic machines that treat everyone like numbers.

 

If you are not in favor of a public health insurance program, and if you think that private insurance is the way to go, ask yourself what the industry could do better to actually provide value to patients. If you are in a health insurance company and think you do provide value to your patients, ask yourself, why don’t people see it? Perhaps we only see the games that insurance plays to limit access to care, to increase premiums every year, and to squeeze hospitals and providers, causing us to misunderstand the benefits that insurance provides. If private health insurance really wants to survive in the future, the industry needs to do better at showing its value, and minimizing its greedy tricks, otherwise, you can’t blame the public for wanting to eliminate insurance companies and have an accountable government take on universal coverage.
Healthcare Stagnation

Healthcare Stagnation

We are facing a disastrous healthcare stagnation in the United States. Our hospitals are getting older, Medical providers are aging with too few young providers to replace them, and the quality of care that many of us experience is not getting much better. Despite this, the cost of healthcare has been soaring. Healthcare expenditures, including the costs of our deductibles, co-pays, and what our insurance pays out, has been going up at a rate reliably above inflation.

 

In The Opioid Crisis Wake-Up Call, Dave Chase writes the following about our healthcare stagnation, “Unlike virtually every other item in our economy, where the value proposition improves every year, the norm in health care for decades has been to pay more and get less. Also, unlike nearly every other industry, healthcare hasn’t had a productivity gain in 20 years.”

 

Productivity is how much we produce per unit of time spent on production. A factory that makes 5,000 widgets per hour is more productive than a factory that makes 1,000 widgets per hour. Automation and new technologies have helped factories and offices become more productive, but our healthcare stagnation is evidence that we are not seeing the same gains in healthcare. Technology has improved, but not in areas that seem to produce more healthy patients given the same amount of time and effort from our medical providers. We have some new technologies, but somehow those technologies have not translated into a healthcare system that supports the same number of people with fewer resources.

 

Chase continues, “In other words, for the last two decades, there has been a redistribution tax from the working and middle class and highly efficient industries to the least productive industry in America.” 

 

As your job has become more efficient and more productive, your healthcare costs have risen. Chase equates this healthcare stagnation price increase to a tax. Factories that can work with fewer employees, software engineers, and other employees form highly productive sectors are paying more in healthcare for services that haven’t kept the same pace as the industries of the patients they treat. This is the cost of healthcare stagnation that chase wants to push back against by demanding better systems and structures from healthcare providers, insurance companies, and benefits brokers. Chase believes we can find a way to improve our healthcare system and help people live healthier lives for less cost, if employers are willing to make real investments in their employees healthcare, and are willing to hold their brokers and insurance providers accountable for the value their products provide.
Health Insurance Company Games

Health Insurance Company Games

Dave Chase’s book The Opioid Crisis Wake-Up Call was an interesting read because Chase highlights many of the health insurance company games that add to the cost of healthcare in the United States without providing additional value. I’m skeptical of health insurance companies, and Chase’s book discusses some of the nitty-gritty details of misaligned incentives that lead to unending increases in healthcare premiums and costs.

 

An example that Chase highlights is early renewal discounts for companies that chose to stay with their current health insurance company or plan administrator. Throughout the book, Chase discusses how businesses are letting their employees down and allowing healthcare costs to skyrocket by accepting increasing healthcare costs from health insurance companies each year. Many companies don’t have someone who really understands healthcare or health insurance in charge of their benefits programs, and as a result those individuals are often more focused on not being yelled at by employees than on reducing costs and providing a valuable health insurance package. Insurance companies take advantage of this by pressuring businesses to accept increases in the cost of healthcare administration each year at rates far above inflation.

 

Insurance companies know that businesses don’t actually want to shop around for health insurance and they know that employees don’t want to have a change in insurance each year. Insurance companies will offer benefits for early renewals from companies, and as Chase writes, “Often these early renewals come with no-shop clauses. So, a 20 percent rate increase may only be a 15 percent if you sign today and agree not to shop the competition. This should be viewed as a red-flag, not a great deal on a premium reduction.”

 

Insurance companies position themselves as offering a good deal, but they are increasing the cost of the insurance plan by 15%. Busy employers with small HR staff often see this as a win because it reduces their effort and while employees see costs rise they don’t have to hassle with changing insurance and unknown insurance processes. This is part of why premiums in the United States are rising so fast. Insurance companies hide information and data, and make it difficult for overwhelmed staff to pick benefits that will truly help employees.
Employers, Employees, and Opioids

Employers, Employees, and Opioids

One of the frustrations I have with modern day America is how frequently employers say that their greatest asset is their employees, but don’t back that statement up with actual action that helps improve the lives of their employees. Many of us work 40 hours when our work could reasonably be completed in fewer hours, alternatively many of us have incredible demands and insufficient help or time to complete our work. On the benefits side, many of us have health plans that don’t make preventative care affordable and have high deductibles and copays which place basic medical care beyond our reach. These frustrations, incursions into our non-work-lives, and a lack of support for living healthy lives are examples where employers are failing to live up to the claim that so many of them make about the care and value they have for their employees.

 

In the end, a failure to take care of employees and a willingness to let workers languish hurts the employers as much as the employees. In his book, The Opioid Crisis Wake-Up Call Dave Chase writes, “Ohio attorney general Mike DeWine estimated that 40 percent of job applicants in the state either failed or refused a drug test. The result: In certain places, solid middle-class jobs can’t be filled.”

 

On a first read, the problem sounds like it is on the job applicants. Why are so many job applicants using drugs, refusing drug tests, and unable to be hired for work? Shouldn’t they stop using drugs, get their lives together, and do the sensible things to be responsible humans and find employment? From the outside, as someone with a job who doesn’t have an opioid addiction, this is easy to say and think, but it’s also shortsighted.

 

Many of us have incredibly lengthy commutes, decimated social lives, no meaningful civic or religious organizations to give us purpose outside of work, and lack access to supportive mental health and general healthcare services. When we fall on hard times and need assistance, we don’t have a social safety net that we can fall back upon with encouragement and understanding. We feel isolated, can barely afford healthcare, don’t have much time outside of work and commutes for social or civic engagement, and if we do need welfare, the system is designed to make us feel like abject failures for turning to public support programs for help.

 

The blame can’t fall entirely on the individual. Businesses have to be held accountable as well, after all, employers count on a strong labor market to stay afloat and be productive. If they truly value their employees, they should prioritize a happy, healthy, and effective workplace by pushing back against institutions and structures in our lives that make us miserable, depressed, unhealthy, and uncommitted to the work we do. Chase’s book shows how employers are beginning to do this, by providing more services (in healthcare) to their employees and actually saving money while doing so. Employers can let their actions speak louder than their HR slogans, and can help their employees actually live healthy lives. In the end, the workforce that they rely upon will indeed be more reliable.
Making People Feel Valuable

Making People Feel Valuable

Toward the end of his book Dreamland, Sam Quinones quotes a the VP of sales from a shoelace factory in Portsmouth Ohio named Bryan Davis. Speaking of the company that Davis helps run, and discussing how Davis and a few others took over a failing shoelace company and reinvented it, Davis says, “It’s all been about money, the mighty dollar. The true entrepreneurial spirit of  the U.S. has to be about more than that. It has to be about people, relationships, about building communities.”

 

Quinones writes about how the decline of manufacturing has harmed cities across the United States. He understands why companies have relocated oversees, and in some ways accepts that businesses move and that economies change, but he sees the abandonment of American workers and the lack of supports for those workers when opportunities disappear as a major contributing factor to the Nation’s current opioid epidemic. When people suddenly lose the job they have held for years, when there is no clear alternative for them to turn to in order to feel useful, valuable, and like a contributing member of society, an alternative to ease the pain of their new reality is often pain killing opioid medications. It is an easy recipe for widespread addiction.

 

I don’t understand economics well enough to place criticism on businesses and factories that move operations to different cities, different states, or different countries altogether. I won’t criticize or praise these companies, but what is clear to me, is that we need to find ways to be more respectful of the people who work for and with us. We need to find real ways to make people feel valuable in their jobs, whether they are call center staff, healthcare workers, or a VP of a successful company. We can’t set out with a goal to make money and then withdraw ourselves from the lives of our fellow Americans and communities. We have to develop real relationships with people across the political, economic, and cultural spectrum of the communities where we live, otherwise we turn toward isolation, which isn’t helpful or healthy for ourselves or others in the long run.

 

This is the idea that Bryan Davis expressed. We can be inventive, creative, and push for economic success, but we should do so in a way that supports our community and values relationships with those around us and in our lives. If we only drive toward our own wealth and bottom line, we risk exploiting people, and that ultimately leaves them in a vulnerable position where isolation, depression, and isolation are all the more possible.
Clarity on What Matters

Do You Know What Matters?

For a while I worked in the healthcare tech start-up space, and two of the biggest challenges we often faced was knowing what was the most important thing to work on, and how to be productive to accomplish our goals. I was in a role where I interfaced between multiple teams and a lot of my day was spent with email. I didn’t spend my entire day producing reports, working on spreadsheets, or creating new policy documents. Much of my day involved putting out minor fires that popped up for people working across the teams I worked between. This left me in a position where it was hard to measure my productivity. If I wasn’t producing a report of one type, and was just going to meetings and responding to emails, how did I demonstrate that I was working continuously and trying to accomplish things?

 

The easy answer which I often fell into was email. The quicker I responded to email, the more email I responded to, and the more visible I was in those emails, the more everyone would know I was working hard. The problem, however, is that responding to a ton of emails often isn’t very productive, and it often doesn’t address the most pressing problems. When I started to recognize this and shift my activity, a lot of emails fell aside (not to mention Slack Channels), and I started to actually be better at my job.

 

In Deep Work Cal Newport writes, “Clarity about what mattes provides clarity about what does not.”

 

For the first couple of years I didn’t have good clarity about what mattered. I spent a good amount of time on projects that were never going to go anywhere, and I spent a good amount of time responding to emails that really never needed a response. I looked productive, but what I worked on didn’t help drive toward the company’s biggest objectives.

 

In our work lives (and really in our lives in general) we need to start focusing on what truly matters. The better we can be at asking what is important and the better we can understand the why behind that importance, the more we can accomplish. As we practice this we will see what things are unimportant in our lives, and we can take steps to cut those things out, leaving us with more space and time for the important things. If we don’t stop to ask what things really matter, we won’t see which things don’t matter, and we won’t be able to move those things to the periphery.
The Second Value of Deep work

The Second Value of Deep Work

“The second reason that deep work is valuable,” writes Cal Newport in Deep Work, “is because the impacts of the digital network revolution cut both ways. If you can create something useful, its reachable audience (e.g., employers or customers) is essentially limitless – which greatly magnifies your reward. On the other hand, if what you’re producing is mediocre, then you’re in trouble, as it’s too easy for your audience to find a better alternative online.”

 

If you only produce shallow work, your work will never have a home. People will skip over you as they search for something more interesting. Shallow work cannot compete against cat gifs, well produced reports, and interesting perspectives on important topics. Shallow work steals people’s time, and people will recognize that and learn to turn away from sources of shallow work.

 

Deep work on the other hand is truly considerate and well formulated. It requires focus, attention, and an ability to connect ideas and points that are not obviously related at first. It provides value to people and rewards them for investing their time with your media, content, or production.

 

Because we have so much access to so many people through digital media, we no longer need to pursue a shallow work approach to gaining an audience. Our deep work can resonate with those who are truly connected to what we do or the topic at hand. We can provide high quality work for a smaller group and have a more committed following. The listener data from 80,000 Hours, who regularly produce high quality 2 to 4 hour long podcast interviews is evidence in favor of Newport’s deep work claims.

 

If we invest in our minds, work on our thinking and focus, and produce high quality work, we can reach an audience that matters. If we don’t pursue this strategy, if we try instead to shovel meaningless content into the faces of everyone we can, we might get some clicks, but few people will appreciate, learn, and return to what we produce. The attention we receive will be fleeting as we are passed over for things that are more valuable and important.

More On Flattery

Yesterday I wrote about the distinction between true appreciation and real compliments to people’s hard work versus empty flattery. Today’s post continues on that theme. In his book How to Win Friends and Influence People, Dale Carnegie continues his thoughts on flattery writing, “That’s all flattery is – cheap praise. I once read a definition of flattery that may be worth repeating: Flattery is telling the other person precisely what he thinks about himself.”

 

I like thinking about this second quote from Carnegie on flattery. As someone who was a successful business person and leader,  Carnegie was subject to plenty of flattery. As you achieve more and become more successful people have more of an incentive to be on your good side. This means that flattery can have a bigger payoff for those individuals who want to gain something by being your friend or ally. You can become a target of flattery that makes you feel good, but potentially leaves you vulnerable to those who simply want something from you.

 

If we are someone who is vulnerable to flattery, we must remember Carnegie’s quote. Flattery is not honest feedback about who we are, about the quality of our decisions, or about our value to the organizations we are a part of. Flattery is about someone else who wants to gain something by allying themselves with us. That individual might want a promotion, might want more money, or might want more status by getting to tell others that they are part of our inner circle. The worst part is that since their flattery is insincere, it might make us overconfident about the decisions we have made, about our perspective on the future, and about our own self worth. Ultimately, this could lead us to make worse future decisions and to be overconfident and arrogant. Flattery in the end hurts the individual being flattered and the organizations they are a part of.

 

If we find ourselves to be the one dishing out the flattery, we should really reconsider what we are doing. Are we flattering another person because we feel that we can’t give them honest feedback and must flatter them? If so, we might want to find anther organization to be a part of, or we might want to band together with others to have a flattery intervention and agree to all quit flattering the person who does not deserve it. When we flatter someone else for our own gain, we are trading off long-term success and stability of something bigger than ourselves for our own personal short-term gain. This strategy might work well initially, but in the long run it will spell doom for ourselves and the organizations we are a part of.

 

Think deeply about honest feedback, and avoid flattery, because it will hurt us regardless of whether we are the giver or receiver.