To say healthcare is changing is passé, particularly given that California is further ahead than most other states when it comes to implementing healthcare reform. It’s reached near universal coverage—its uninsured rate fell from 17% before the implementation of the Affordable Care Act to about 7%, according to a recent report by Covered California. The “eligible uninsured” rate, not counting undocumented immigrants who are ineligible for coverage, is nearly 3.6%.
Panelists at this year’s healthcare forecast conference shared their outlooks on what work still needs to be done in the face of an unhealthy and aging workforce. They agreed disruptive innovations will play a big role in care delivery, cost control and patient management, but pointed out that there’s no single solution.
The two-day conference was presented by the Paul Merage School of Business at the University of California-Irvine.
What Means Amazon
The buzziest news was Amazon.com Inc. (Nasdaq: AMZN), Berkshire Hathaway Inc. (NYSE: BRKA) and JPMorgan Chase & Co. (NYSE: JPM) announcing plans to form an independent healthcare company “that is free from profit-making incentives and constraints,” according to a Berkshire press release. The venture is in the very early stages.
Details are scant—no name, headquarters, management team or business plan—and none of them have direct experience in healthcare services or insurance plans.
Michael Troncoso, managing counsel for health affairs and technology law for the University of California system, suggested that a logical entry point for Amazon could be filling and delivering prescriptions—the e-commerce giant could lower healthcare costs; it’s traditionally been able to cut prices by bringing in-house and automating the order fulfillment process.
But Amazon may be in for a surprise. Healthcare is different and far more complex than books or groceries—what would it do if a patient asks for a medication that isn’t covered by its insurance plan, questioned Sheryl Skolnick, executive vice president of strategic relationships at healthcare services giant Optum Inc. “Would Amazon say no?” she asked.
Opportunities
Health tech is a crowded market with plenty of entrants. Technologies run the gamut of transparency tools, remote patient monitoring, personalized health, wellness management and big data/analytics, to name a few.
New York-based StartUp Health LLC said 2017 was the most active year for digital funding worldwide—totaling more than $11.5 billion—and it “[expects] plentiful capital in 2018.”
One area of growth is wellness, focused on tools that improve health and wellness before people get sick.
“Well-being is becoming more important,” said Aon PLC Senior Vice President John Vlajkovic. He said employers are moving in that direction and investing in programs, such as reward programs, that encourage employees to make healthy lifestyle choices.
Newport-Beach based Carepoynt is a local startup developing a platform to reward health and wellness decisions.
With the explosion of healthcare technology, the question becomes how to educate consumers to adopt technologies and become more involved in monitoring their health and engaging with care providers.
Care Settings
The mandate of healthcare providers to provide cost-effective quality care services has changed how care is delivered and where care is given. Providers are not only shifting care from higher-cost, traditional hospital settings to outpatient sites, but also building strategic partnerships involving community organizations.
CalOptima in Orange rolled out its community-based Medicare and Medi-Cal program PACE—all-inclusive care for the elderly—in 2013, enrolling approximately 250 participants at its center in Garden Grove.
Services include routine medical care, social services, personal care like bathing and dressing, and rides to health-related appointments and to and from its day center.
Next year it will launch a Health Homes program in Orange County, focusing on members with chronic physical conditions, substance use disorders and serious mental illness.
Physicians-Led
Jane Curtis, an internal medicine physician of St. Joseph Heritage Medical Group in Santa Ana, said she’s surprised that the conference didn’t feature more doctors. After all, “medical care involves primarily the physician and the patients,” she said.
A group of 1,100 Southern California doctors actually tried providing insurance plans to small businesses in 1998, rolling out PCOC—pronounced “peacock”—according to the Los Angeles Times.
“We’re trying to return medical care to the physicians and the patients,” said Gerald Wilks, founder of Irvine-based Physicians Care of California and an orthopedic surgeon.
Ed Keaney was a managed-care analyst at San Francisco-based Volpe Brown Whelan at the time of the physicians’ ill-fated venture in the insurance business. “It’s pretty hard to start an insurance company from scratch in a mature market like California,” he told the Times. He added that the doctors’ gambit was like someone “with a new design for a new car who wants to compete with General Motors Corp.”
PCOC faced significant obstacles and ultimately failed.
