Category Archives: Quality of Care

Talk Is Cheap: Now Trump Must Deliver On His Healthcare Promises

Posted on by • Posted in 2026 Mid Term Election Issues, 2028 Election Issues, Artificial Intelligence, Artificial Intelligence Generative, Artificial Intelligence Investment Funding, Food Health, Health Policy, Healthcare Reform, High Drug Prices, Medicare Drug Price Negotiation, Obesity, Obesity Treatment, Opioid Epidemic, Outcomes, Pharmaceutical Industry, Quality, Quality Measures, Quality of Care, Quality of Life • Tagged , , , , • Leave a comment

https://www.forbes.com/sites/robertpearl/2025/06/09/talk-is-cheap-now-trump-must-deliver-on-his-healthcare-promises/

President Donald Trump has made big promises about fixing American healthcare. Now comes the moment that separates talk from action.

With the 2026 midterms fast approaching and congressional attention soon shifting to electoral strategy, the window for legislative results is closing quickly. This summer will determine whether the administration turns promises into policy or lets the opportunity slip away.

Trump and his handpicked healthcare leaders — HHS Secretary Robert F. Kennedy Jr. and FDA Commissioner Dr. Marty Makary — have identified three major priorities: lowering drug prices, reversing chronic disease and unleashing generative AI. Each one, if achieved, would save tens of thousands of lives and reduce costs.

But promises are easy. Real change requires political will and congressional action. Here are three tests that Americans can use to gauge whether the Trump administration succeeds or fails in delivering on its healthcare agenda.

Test No. 1: Have Drug Prices Come Down?

Americans pay two to four times more for prescription drugs than citizens in other wealthy nations. This price gap has persisted for more than 20 years and continues to widen as pharmaceutical companies launch new medications with average list prices exceeding $370,000 per year.

One key reason for the disparity is a 2003 law that prohibits Medicare from negotiating prices directly with drug manufacturers. Although the Inflation Reduction Act of 2022 granted limited negotiation rights, the initial round of price reductions did little to close the gap with other high-income nations.

President Trump has repeatedly promised to change that. In his first term, and again in May 2025, he condemned foreign “free riders,” promising, “The United States will no longer subsidize the healthcare of foreign countries and will no longer tolerate profiteering and price gouging.”

To support these commitments, the president signed an executive order titled “Delivering Most-Favored-Nation (MFN) Prescription Drug Pricing to American Patients.” The order directs HHS to develop and communicate MFN price targets to pharmaceutical manufacturers, with the hope that they will voluntarily align U.S. drug prices with those in other developed nations. Should manufacturers fail to make significant progress toward these targets, the administration said it plans to pursue additional measures, such as facilitating drug importation and imposing tariffs. However, implementing these measures will most likely require congressional legislation and will encounter substantial legal and political challenges.

The pharmaceutical industry knows that without congressional action, there is no way for the president to force them to lower prices. And they are likely to continue to appeal to Americans by arguing that lower prices will restrict innovation and lifesaving drug development.

But the truth about drug “innovation” is in the numbers: According to a study by America’s Health Insurance Plans, seven out of 10 of the largest pharmaceutical companies spend more on sales and marketing than on research and development. And if drugmakers want to invest more in R&D, they can start by requiring peer nations to pay their fair share — rather than depending so heavily on U.S. patients to foot the bill.

If Congress fails to act, the president has other tools at his disposal. One effective step would be for the FDA to redefine “drug shortages” to include medications priced beyond the reach of most Americans. That change would enable compounding pharmacies to produce lower-cost alternatives just as they did recently with GLP-1 weight-loss injections.

If no action is taken, however, and Americans continue paying more than twice as much as citizens in other wealthy nations, the administration will fail this crucial test.

Test No. 2: Did Food Health, Quality Improve?

Obesity has become a leading health threat in the United States, surpassing smoking and opioid addiction as a cause of death.

Since 1980, adult obesity rates have surged from 15% to over 40%, contributing significantly to chronic diseases, including type 2 diabetes, heart disease and multiple types of cancers.

A major driver of this epidemic is the widespread consumption of ultra-processed foods: products high in added sugar, unhealthy fats and artificial additives. These foods are engineered to be hyper-palatable and calorie-dense, promoting overconsumption and, in some cases, addictive eating behaviors.

RFK Jr. has publicly condemned artificial additives as “poison” and spotlighted their impact on children’s health. In May 2025, he led the release of the White House’s Make America Healthy Again (MAHA) report, which identifies ultra-processed foods, chemical exposures, lack of exercise and excessive prescription drug use as primary contributors to America’s chronic disease epidemic.

But while the report raises valid concerns, it has yet to produce concrete reforms.

To move from rhetoric to results, the administration will need to implement tangible policies.

Here are three approaches (from least difficult to most) that, if enacted, would signify meaningful progress:

  • Front-of-package labeling. Implement clear and aggressive labeling to inform consumers about the nutritional content of food products, using symbols to indicate healthy versus unhealthy options.
  • Taxation and subsidization. Impose taxes on unhealthy food items and use the revenue to subsidize healthier food options, especially for socio-economically disadvantaged populations.
  • Regulation of food composition. Restrict the use of harmful additives and limit the total amount of fat and sugar included, particularly for foods aimed at kids.

These measures will doubtlessly face fierce opposition from the food and agriculture industries. But if the Trump administration and Congress manage to enact even one of these options — or an equivalent reform — they can claim success.

If, instead, they preserve the status quo, leaving Americans to decipher nutritional fine print on the back of the box, obesity will continue to rise, and the administration will have failed.

Test No. 3: Are Patients Using Generative AI To Improve Health?

The Trump administration has signaled a strong commitment to using generative AI across various industries, including healthcare. At the AI Action Summit in Paris, Vice President JD Vance made the administration’s agenda clear: “I’m not here this morning to talk about AI safety … I’m here to talk about AI opportunity.”

FDA Commissioner Dr. Marty Makary has echoed that message with internal action. After an AI-assisted scientific review pilot program, he announced plans to integrate generative AI across all FDA centers by June 30.

But internal efficiency alone won’t improve the nation’s health. The real test is whether the administration will help develop and approve GenAI tools that expand clinical access, improve outcomes and reduce costs.

To these ends, generative AI holds enormous promise:

  • Managing chronic disease: By analyzing real-time data from wearables, GenAI can empower patients to better control their blood pressure, blood sugar and heart failure. Instead of waiting months between doctor visits for a checkup, patients could receive personalized analyzes of their data, recommendations for medication adjustments and warnings about potential risk in real time.
  • Improving diagnoses: AI can identify clinical patterns missed by humans, reducing the 400,000 deaths each year caused by misdiagnoses.
  • Personalizing treatment: Using patient history and genetics, GenAI can help physicians tailor care to individual needs, improving outcomes and reducing side effects.

These breakthroughs aren’t theoretical. They’re achievable. But they won’t happen unless federal leaders facilitate broad adoption.

That will require investing in innovation. The NIH must provide funding for next-generation GenAI tools designed for patient empowerment, and the FDA will need to facilitate approval for broad implementation. That will require modernizing current regulations. The FDA’s approval process wasn’t built for probabilistic AI models that rely on continuous application training and include patient-provided prompts. Americans need a new, fit-for-purpose framework that protects patients without paralyzing progress.

Most important, federal leaders must abandon the illusion of zero risk. If American healthcare were delivering superior clinical outcomes, managing chronic disease effectively and keeping patients safe, that would be one thing. But medical care in the United States is far from that reality. Hundreds of thousands of Americans die annually from poorly controlled chronic diseases, medical errors and misdiagnoses.

If generative AI technology remains confined to billing support and back-office automation, the opportunity to transform American healthcare will be lost. And the administration will have failed to deliver on this promise.

When I teach strategy at Stanford’s Graduate School of Business, I tell students that the best leaders focus on a few high-priority goals with clear definitions of success — and a refusal to accept failure. Based on the administration’s own words, grading the administration on these three healthcare tests will fulfill those criteria.

However, with Labor Day just months away, the window for action will soon close. The time for presidential action is now.

The lifesaving potential of OpenAI’s GPT-4o update

Posted on by • Posted in Artificial Intelligence, Artificial Intelligence Generative, ChatGPT-4, Diabetes, Hypertension, Privacy, Quality of Care • Leave a comment

https://www.linkedin.com/pulse/lifesaving-potential-openais-gpt-4o-update-robert-pearl-m-d–ngrmc/

Generative AI tools have made remarkable strides in medicine since the launch of ChatGPT in late 2022. Research has shown that AI, with expert clinician oversight, can significantly enhance diagnostic accuracy, treatment recommendations, and patient monitoring and analysis.

And yet, despite its impressive capabilities and buzz, generative AI is still in the early stages of adoption—both in U.S. healthcare and society.

While almost everyone has heard of genAI, less than a quarter of Americans use it regularly in their personal or professional lives. OpenAI’s newest update, GPT-4o, aims to change that.

In demos released during its spring update, OpenAI showed users engaged in natural, human-like conversations with GPT-4o. The AI interacted with people on their smartphones across video, audio and text, offering real-time spoken responses that sounded eerily human.

In the demo above, AI’s instant answers and friendly voice closely mimic the pace and inflection of normal dialogue. Not coincidently, GPT-4o’s voice sounded remarkably like Scarlett Johansson’s AI character in the movie Her (a decision OpenAI later walked back “out of respect”).

Regardless of the voice coming out of it, GPT-4o is at once awe-inspiring and unsettling. It also represents a significant departure from tech-industry norms. Most tech companies have long avoided creating AI “companions” because of ethical concerns, fearing people could form addictions that exacerbate isolation and loneliness.

What Will GPT-4o’s Rule-Breaking Mean For Medicine?

Critics point out that OpenAI and its peers have yet to resolve a host of major “trust” issues. These include accuracy, privacy, security, bias and misinformation. Of course, these will need to be resolved.

But by creating an AI experience that feels more like talking to a friend, or potentially a doctor, OpenAI has already leapt the tallest hurdle to mass acceptance and adoption. The company understands that humanizing GPT-4o—making it easier and more enjoyable to use—is essential for attracting a wide array of users, including the “late majority” and “laggards” described in Geoffrey Moore’s seminal 1991 book Crossing the Chasm.

Today, 70% of genAI’s non-users are Gen X (ages 44-59) and Baby Boomers (60-78). These generations, which comprise 136 million people, strongly prefer voice and video technologies to typing or touchscreens, and greatly prefer “conversational” AI apps to text-only ones.

They also make up the overwhelming majority of Americans with chronic diseases like diabetes, heart failure and cancer.

GenAI: From Mass Adoption To Mass Empowerment

Once consumers in their 50s, 60s and 70s become comfortable using GPT-4o for everyday tasks, they will then start to rely on it for medical inquiries, too. In a healthcare context, using GPT-4o will closely resemble a video visit or a phone call with a medical professional—two modalities that satisfy the majority of older patients. In fact, 93% of adults over age 70 say they value having telehealth as an option.

With broad adoption, GPT-4o (which will be embedded in next generations of ChatGPT) will empower the sickest Americans to take greater control of their own health, preventing up to hundreds of thousands of premature deaths each year from the complications of chronic disease: heart attacks, strokes, cancer and kidney failure. According to the Centers for Disease Control and Prevention, the effective management of chronic illness would reduce these complications by 30% to 50%, with a similar reduction in mortality.

Generative AI technology contains both the knowledge and ability to help accomplish this:

  • Knowledge. ChatGPT houses an extensive corpus of scientific literature, which includes a diverse and extensive dataset of clinical studies, guidelines from professional medical organizations and research published in top-tier medical journals. In the future, it will be updated with real-time data from medical conferences, health records and up-to-the-minute research, ensuring the AI’s knowledgebase remains both comprehensive and current.
  • Ability. To assist overburdened clinicians, genAI can provide patients with round-the-clock monitoring, insights and advice—empowering them to better diagnose and manage their own health problems. Future generations of these tools will connect with monitoring devices, informing patients about their health status and suggesting medication adjustments or lifestyle changes in clear and friendly terms. These tools will also remind people about preventive screenings and even facilitate testing appointments and transportation. These proactive approaches can reduce complications and improve health outcomes for the 130 million Americans living with chronic diseases.

Combatting Chronic Disease With GPT-4o

To dive deeper into genAI’s difference-making potential, let’s look at two major gaps in chronic disease management: diabetes and hypertension.

Diabetes is the leading cause of kidney failure, a major contributor to heart attacks and responsible for 80% of lower limb amputations. Effective management is possible for nearly all patients and would prevent many of these complications. Yet diabetes is well controlled in only 30% of cases across the United States.

Similarly, effective control of high blood pressure—the leading cause of strokes and a major contributor to kidney failure and heart attacks—is achieved only 55% to 60% of the time. Although some health systems achieve control levels above 90%, the best-available tools and approaches are inconsistently deployed throughout medical practices.

Medical monitoring devices plus AI could play a crucial role in managing hypertension. Imagine a scenario in which a doctor prescribes medication for hypertension and sends the patient home with a wearable device to monitor progress. After a month, the patient has 100 readings—90 normal and 10 elevated. The patient is unsure whether the 90 normal readings indicate all is well or if the 10 elevated ones signal a major problem. The doctor doesn’t have time to review all 100 readings and prefers not to clutter the electronic health record with this data. Instead of the patient waiting four months for the next visit to find out if all is well or not, a generative AI tool could quickly analyze the data (using the doctor’s instructions) and advise whether a medication adjustment is needed or to continue as is.

Today’s generative AI tools aren’t ready to transform medical monitoring or care delivery, but their time is coming. With the technology doubling in power each year, these tools will be 32 times more capable in five years.

Overcoming Barriers To Mass Adoption

Concerns about AI privacy, security and misinformation need to be solved before the majority of Americans will buy in to an AI-empowered future. Progress is being made on those fronts. For example, the leap from GPT-3.5 to GPT-4 saw an 82% reduction in hallucinations, a larger context window and better safety mechanisms.

In addition, clinicians worry about potential income loss if AI leads to healthier patients and reduced demand for medical services. The best solution is to shift from the current fee-for-service reimbursement model (which rewards the volume of medical services) to a value-based, capitated model. This system rewards doctors for preventing chronic diseases and avoiding their most serious complications, rather than simply treating life-threatening medical problems when they arise.

By adopting a pay-for-value approach, medical professionals will embrace genAI as a tool to help prevent and manage diseases (rather than seeing it as a threat to their livelihoods).

The release of GPT-4o shattered the industry norm against creating human-like AI, introducing ethical risks that must be carefully managed. However, the potential for genAI to save thousands of lives each year makes this risk worth taking.

Is Corporatization Killing Primary Care?

Posted on by • Posted in Corporatization of Primary Care, High Value Care, Physician Employment, Physician Incentives, Physician Independence, Primary Care, Primary Care Delivery Model, Quality of Care • Leave a comment

One emerging model brings hope for independent primary care in a rapidly transforming healthcare landscape.

More than 48% of all U.S. physician practices and nearly 70% of physicians are now owned or employed by either hospitals or corporate entities, according to the latest research.

Add to this shift the recent news of Amazon’s new One Medical benefit, billed as delivering access to high-quality primary care and 24/7 on-demand virtual care to the company’s more than 160 million Prime subscribers, and it’s clear that the corporatization of primary care is showing no signs of slowing.

As two primary care physicians committed to providing the best possible care for our patients, we have a front-row seat to the threat that corporatization poses to the very essence of independent primary care. We also have hope.

One emerging model is successfully embracing the tenets of independent primary care, shining a light on the path to better patient health in a rapidly transforming healthcare landscape.

Defining high-value primary care  

High-value primary care relies on maintaining its independence. Independent primary care physicians (PCPs) excel at providing personalized care by fostering meaningful relationships with patients, ensuring that medical decisions are tailored to individual needs, and focusing on prevention to avoid health catastrophes and improve overall health. They often integrate with community leaders, influence local health policy, and mobilize community resources to help patients facing socioeconomic challenges.

In the independent setting, patients of these PCPs benefit from a continuous relationship with the same PCP over time, leading to better health outcomes born of a deeper understanding of their unique healthcare needs.

Notably, these PCPs (and their patients) are less likely to be influenced by the economic incentives that perversely drive patients back to hospitals and health systems in search of expensive but preventable or unnecessary care.

In fact, primary care owned or employed by a hospital is often seen as a loss leader for downstream revenue generators. Hospital-based PCPs are also more likely than their independent peers to experience a loss of autonomy over patient care decisions.

A recent survey from the Physicians Advocacy Institute found that 60% of physicians believe that the trend away from private practice ownership has reduced care quality, largely due to a lack of clinical autonomy and an increased focus on cost savings by facility leadership. These collective factors are obstacles to the sacred physician-patient relationship in service of a hospital-driven agenda and slow-moving bureaucracy.

Collaboration over corporatization

Maintaining independence in primary care has become increasingly difficult due to powerful industry headwinds that often lead previously independent practice owners to sell their businesses in defeat. Fortunately, PCPs have more options beyond joining hospitals, health systems, or emerging corporatized healthcare, where financial and operational pressures can form barriers to better care.

Collaborative primary care networks, also known as “enablers,” are entities that combine the strengths of independent primary care with the bargaining power and economies of scale associated with larger corporations. These network groups offer a viable way for practices to maintain independence by working together under a federated body to pool resources and improve infrastructure, thereby reducing administrative burden on the practice and bringing in new technologies and care coordination capabilities. These enablers also help independent practices negotiate collectively to secure better payer contracts, which ensure sustainable revenue streams without sacrificing their patient-centered approach. 

Collaborative primary care networks are effective because they embrace the power of consolidation crucial to the success of corporatized care models while preserving practice autonomy, divorced from upstream economic incentives, which place patient care at risk. Such groups are financially rewarded for keeping patients healthy and out of the hospital, which is ultimately what independent primary care does best. 

Incentivizing value alignment 

Only time will reveal Amazon’s impact on care, but the rise of corporate primary care doesn’t have to spell the death of patient-centered care. What we do know is that primary care innovations deliver true value only when the right incentives are in place, as demonstrated by independent primary care. 

When corporatized primary care organizations function independent of misaligned financial incentives, success can instead be defined through health and well-being. When aligned with the values of independent primary care, corporatized primary care can invest in robust multidisciplinary teams, focus on preventive care, and use technology to improve efficiency in a new model of care delivery that combines the best of what corporate and independent primary care each have to offer.

When independence is maintained, high-quality, personalized primary care will retain a meaningful place within the U.S. healthcare system and continue to help patients live healthier, longer lives. And that gives these two veteran physicians more hope for a brighter future.

A New Kind of Primary Care Comes to America

Posted on by • Posted in Innovation, Innovative Care Models, Patient Engagement, Patient Experience, Primary Care, Primary Care Delivery Model, Quality of Care • Leave a comment
A New Kind of Primary Care Comes to America

A group of nurses in East Baltimore is piloting a bold plan to bring basic primary care to everybody no matter their age, income or insurance. Can this idea from abroad take root in the United States?

Raquel Richardson arrived at work in the Johnston Square Apartments in East Baltimore this February expecting to have just another Tuesday. The 31-year-old typically spends her days solving residents’ problems, answering questions at reception and making maintenance rounds.

That day, however, she noticed a team offering free blood pressure checks in the lobby — and decided to sit for one too. Tiffany Riser, a nurse practitioner, was so alarmed by Richardson’s high reading that she checked it twice. The young woman, the nurse confirmed, was at immediate risk for a stroke.

Riser only caught this threat to Richardson’s health because she was offering convenient, preventive care as part of a new program called Neighborhood Nursing. The idea is to meet people where they are and offer them free health checks, whether they realize they need them or not. If Richardson had waited until symptoms arose, Riser says, the results could have been disastrous. 

Instead, Richardson quickly got on a new blood pressure medication and received additional information from Riser about how to reduce hidden salt in her diet. Months later, her pressure remains at a healthy level. 

Bringing care out of the clinic and into the community

Neighborhood Nursing’s teams of nurses and community health workers have started making weekly visits like these to the lobbies of three apartment buildings in Johnston Square, one of Baltimore’s most marginalized neighborhoods. By next year, the team aims to visit more than 4,000 people in the Baltimore metropolitan area at least once a year.

“We’re trying to turn primary care on its head and deliver it in a completely different way,” says Sarah Szanton, dean of the Johns Hopkins School of Nursing and leader of the project, which is a collaboration with the Coppin State, Morgan State and University of Maryland nursing schools.

“What’s revolutionary,” Szanton says, “is that it’s for everybody” — whether they are sick or healthy, rich or poor, young or old, and no matter if they have private insurance, Medicare, Medicaid, or no insurance at all. 

The visits are free to the patient and prioritize each person’s unique goals, from managing chronic back pain to finding safer housing. They can take place in people’s homes, senior centers, libraries or even laundromats.

The idea is modeled after a similar program first tried in Costa Rica about 30 years ago, when that country was grappling with the same core problem that the U.S. is experiencing today: Patients are struggling to access preventive primary care, especially in poor and rural areas. Hospitals are overflowing and basic needs from hunger to high blood pressure are spiraling into bigger, costlier problems.

Szanton believes the U.S. — which lags behind other high-income countries on many measures like infant mortality and obesity — is sorely lacking bold solutions.

Compared to other countries, the U.S. spends far more resources on treating illnesses than on preventing them. America only puts about 5 cents out of every dollar spent on health care toward primary care — and spends less than peer nations on social supports like food and housing.

“It’s like if 10% of our houses were on fire, we would say we don’t have enough firefighters,” Szanton says. “But really what you need to do is prevent fires, which we’ve never done for medical care in this country.” 

A primary care approach imported from a land 2,000 miles south

Costa Rica’s national approach to primary care is very different. “It’s pretty much night and day,” says Asaf Bitton, a primary care doctor who has studied Costa Rica’s model and directs Ariadne Labs, a health innovation center at Harvard School of Public Health.

The Central American nation of 5 million people has pioneered a nationwide version of Neighborhood Nursing. Teams of health workers visit residents’ homes at least once a year, whether the patients live in cities, on banana farms or in remote villages reachable only by boat. After three decades of this approach, the results are remarkable.

Deaths from communicable diseases like tuberculosis and hepatitis have fallen by 94%. Disparities in access to health care have improved too — as have outcomes for chronic conditions like diabetes and heart disease. Costa Rica has achieved all this progress while spending less than 10% of what the U.S. spends per person on care.

“There’s both an incredible economic efficiency and effectiveness,” Bitton says of Costa Rica’s system, “and a deep humanity to it — a sense of reciprocal responsibility for every single person in the country.”

Other factors, including national investments in nutrition and sanitation programs, contributed to the country’s gains, but researchers like Bitton say that keeping nearly every single Costa Rican connected to basic primary care has helped drive significant improvements in health. Other countries, including Sri Lanka and Brazil, have borrowed from Costa Rica’s primary care playbook. 

Still, it’s unclear whether Costa Rica’s model can take root in the U.S.

“The evidence is great,” says Chris Koller, president of the Milbank Memorial Fund, and coauthor of a landmark national report on how to strengthen primary care in the U.S. “The challenge,” Koller says, “is how do you graft it onto our current method of delivering and financing health care?”

Who should fund preventive care?  

Funding is arguably the greatest puzzle facing the Neighborhood Nursing team. The goal is to build something akin to a public utility, serving everyone regardless of the type of health insurance they do — or don’t — have. Health insurers are the most likely to finance a program like this, which is designed to keep costs down by improving members’ health. 

But getting insurers to pony up would require Neighborhood Nursing to earn buy-in from a dizzying number of entities. The residents of a single county, for example, are typically covered by as many as 50 different insurers, from Medicaid plans to private Medicare plans to employer plans. “You try to keep it simple,” says Ann Greiner, president of the Primary Care Collaborative, a nonprofit group, “But inevitably when you move toward implementing a model, you come up against this complexity.”

Insurers have collectively funded projects like statewide vaccination programs, so there is precedent for pooling resources to support all consumers, regardless of their coverage. An investment in the type of care that Neighborhood Nursing aims to deliver door to door, however, would represent a significant leap in scope.

Finding a path through an overstretched system

Health policy analysts also believe the program will likely struggle to connect patients to the country’s sprawling health and social services systems. If Neighborhood Nursing effectively opens a new, more welcoming front door to those systems, what awaits patients on the other side?

In many cases, unfortunately, that next step is into a complex maze that’s short on resources and heavy on bureaucracy. For example, Baltimore, ground zero for Neighborhood Nursing’s pilot program, leads all big cities in opioid overdose deaths, yet treatment options there are limited. Challenges to capacity plague Costa Rica’s successful primary care system, too, where patients can wait months to see specialists or get surgeries. 

In the U.S., specialty care comes with additional hurdles like the need to secure approvals from a person’s insurance plan for certain procedures or medications. People needing significant social support, such as help with affordable housing, can face years-long wait lists.

“There’s no magic pill to change those structural conditions,” says Lisa Stambolis, a nurse and Neighborhood Nursing’s senior project manager. “But there are still things we can do, and we should do.”

Neighborhood Nursing has included community health workers on their teams to help people navigate these complex systems. The program is also training staff in mental-health first aid and simple techniques of cognitive behavioral therapy to make that type of basic help immediately available.

 Team nurses are prepared to go the extra mile, too, to help patients like Raquel Richardson, the East Baltimore worker with high blood pressure that nurse Tiffany Riser encountered in February. Richardson initially resisted seeking care, citing past bad experiences she’d had at a local hospital. Instead of giving up, Riser switched strategies, calling a local clinic, convincing the staff to squeeze Richardson in for an urgent care visit. Nurse Riser even accompanied her patient to the doctor. “Because I had a professional with me, I felt like they took me more seriously,” Richardson says. 

Early signs of community buy-in

The Neighborhood Nursing project is still in its pilot phase, building trust and gathering feedback from the community. By 2025, staff members hope to expand their services to four neighborhoods — two within Baltimore, one in the suburbs and one in a more rural area.

So far, the evidence the approach works is only anecdotal, but the team says they are already seeing a difference in the level of trust from community members. And a trusting connection between patient and provider is key. “The first couple weeks we showed up, it was like, ‘Who are they?’” says community health worker Terry Lindsay. “Now people are opening up the doors to their homes, saying, ‘Come on in and sit down.’”

One other sign of progress, said Sarah Szanton, is that the larger neighborhood is taking ownership and helping to shape the project. 

Long-time Baltimore resident Regina Hammond and a few of her neighbors told the team they needed safer options for exercise. Together they hatched a plan to start a weekly neighborhood walking group.

“Some people walk other days too, now, as a result of meeting each other at the walking group,” Hammond says. A woman with depression joined the group and soon felt better. Another walker said he liked his neighborhood more after he discovered some new parks and an urban garden he’d never known about, despite living in the area for seven years.

The goal is to improve the health of individuals, says Szanton, and empower communities to create happier, healthier places to live.

“I think of what we’re building as like pipes in a water system,” Szanton says, “Where there’s a resource that’s flowing to every household and that connects them to each other.”

How cognitive biases impact healthcare decisions

Posted on by • Posted in Artificial Intelligence Generative, Availability Bias, ChatGPT, ChatGPT-4, Clinical Decision Support Systems, Clinical Diagnosis, Cognitive Bias, Confirmation Bias, Do No Harm, Framing Effect, Physician, Physician Diagnosis, Quality of Care, Self-Serving Bias, Subconscious Bias • Leave a comment

https://www.linkedin.com/pulse/how-cognitive-biases-impact-healthcare-decisions-robert-pearl-m-d–ti5qc/?trackingId=eQnZ0um3TKSzV0NYFyrKXw%3D%3D

Day one of the healthcare strategy course I teach in the Stanford Graduate School of Business begins with this question: “Who here receives excellent medical care?”

Most of the students raise their hands confidently. I look around the room at some of the most brilliant young minds in business, finance and investing—all of them accustomed to making quick yet informed decisions. They can calculate billion-dollar deals to the second decimal point in their heads. They pride themselves on being data driven and discerning.

Then I ask, “How do you know you receive excellent care?”

The hands slowly come down and room falls silent. In that moment, it’s clear these future business leaders have reached a conclusion without a shred of reliable data or evidence.

Not one of them knows how often their doctors make diagnostic or technical errors. They can’t say whether their health system’s rate of infection or medical error is high, average or low.

What’s happening is that they’re conflating service with clinical quality. They assume a doctor’s bedside manner correlates with excellent outcomes.

These often false assumptions are part of a multi-millennia-long relationship wherein patients are reluctant to ask doctors uncomfortable but important questions: “How many times have you performed this procedure over the past year and how many patients experienced complications?” “What’s the worst outcome a patient of yours had during and after surgery?”

The answers are objective predictors of clinical excellence. Without them, patients are likely to become a victim of the halo effect—a cognitive bias where positive traits in one area (like friendliness) are assumed to carry over to another (medical expertise).

This is just one example of the many subconscious biases that distort our perceptions and decision-making.

From the waiting room to the operating table, these biases impact both patients and healthcare professionals with negative consequences. Acknowledging these biases isn’t just an academic exercise. It’s a crucial step toward improving healthcare outcomes.

Here are four more cognitive errors that cause harm in healthcare today, along with my thoughts on what can be done to mitigate their effects:

Availability bias

You’ve probably heard of the “hot hand” in Vegas—a lucky streak at the craps table that draws big cheers from onlookers. But luck is an illusion, a product of our natural tendency to see patterns where none exist. Nothing about the dice changes based on the last throw or the individual shaking them.

This mental error, first described as “availability bias” by psychologists Amos Tversky and Daniel Kahneman, was part of groundbreaking research in the 1970s and ‘80s in the field of behavioral economics and cognitive psychology. The duo challenged the prevailing assumption that humans make rational choices.

Availability bias, despite being identified nearly 50 years ago, still plagues human decision making today, even in what should be the most scientific of places: the doctor’s office.

Physicians frequently recommend a treatment plan based on the last patient they saw, rather than considering the overall probability that it will work. If a medication has a 10% complication rate, it means that 1 in 10 people will experience an adverse event. Yet, if a doctor’s most recent patient had a negative reaction, the physician is less likely to prescribe that medication to the next patient, even when it is the best option, statistically.

Confirmation bias

Have you ever had a “gut feeling” and stuck with it, even when confronted with evidence it was wrong? That’s confirmation bias. It skews our perceptions and interpretations, leading us to embrace information that aligns with our initial beliefs—and causing us to discount all indications to the contrary.

This tendency is heightened in a medical system where physicians face intense time pressures. Studies indicate that doctors, on average, interrupt patients within the first 11 seconds of being asked “What brings you here today?” With scant information to go on, doctors quickly form a hypothesis, using additional questions, diagnostic testing and medical-record information to support their first impression.

Doctors are well trained, and their assumptions prove more accurate than incorrect overall. Nevertheless, hasty decisions can be dangerous. Each year in the United States, an estimated 371,000 patients die from misdiagnoses.

Patients aren’t immune to confirmation bias, either. People with a serious medical problem commonly seek a benign explanation and find evidence to justify it. When this happens, heart attacks are dismissed as indigestion, leading to delays in diagnosis and treatment.

Framing effect

In 1981, Tversky and Kahneman asked subjects to help the nation prepare for a hypothetical viral outbreak. They explained that if the disease was left untreated, it would kill 600 people. Participants in one group were told that an available treatment, although risky, would save 200 lives. The other group was told that, despite the treatment, 400 people would die. Although both descriptions lead to the same outcome—200 people surviving and 400 dying—the first group favored the treatment, whereas the second group largely opposed it.

The study illustrates how differently people can react to identical scenarios based on how the information is framed. Researchers have discovered that the human mind magnifies and experiences loss far more powerfully than positive gains. So, patients will consent to a chemotherapy regiment that has a 20% chance of cure but decline the same treatment when told it has 80% likelihood of failure.

Self-serving bias

The best parts about being a doctor are saving and improving lives. But there are other perks, as well.

Pharmaceutical and medical-device companies aggressively reward physicians who prescribe and recommend their products. Whether it’s a sponsored dinner at a Michelin restaurant or even a pizza delivered to the office staff, the intention of the reward is always the same: to sway the decisions of doctors.

And yet, physicians swear that no meal or gift will influence their prescribing habits. And they believe it because of “self-serving bias.”

In the end, it’s patients who pay the price. Rather than receiving a generic prescription for a fraction of the cost, patients end up paying more for a brand-name drug because their doctor—at a subconscious level—doesn’t want to lose out on the perks.

Thanks to the “Sunshine Act,” patients can check sites like ProPublica’s Dollars for Docs to find out whether their healthcare professional is receiving drug- or device-company money (and how much).

Reducing subconscious bias

These cognitive biases may not be the reason U.S. life expectancy has stagnated for the past 20 years, but they stand in the way of positive change. And they contribute to the medical errors that harm patients.

A study published this month in JAMA Internal Medicine found that 1 in 4 hospital patients who either died or were transferred to the ICU had been affected by a diagnostic mistake. Knowing this, you might think cognitive biases would be a leading subject at annual medical conferences and a topic of grave concern among healthcare professionals. You’d be wrong. Inside the culture of medicine, these failures are commonly ignored.

The recent story of an economics professor offers one possible solution. Upon experiencing abdominal pain, he went to a highly respected university hospital. After laboratory testing and observation, his attending doctor concluded the problem wasn’t serious—a gallstone at worst. He told the patient to go home and return for outpatient workup.

The professor wasn’t convinced. Fearing that the medical problem was severe, the professor logged onto ChatGPT (a generative AI technology) and entered his symptoms. The application concluded that there was a 40% chance of a ruptured appendix. The doctor reluctantly ordered an MRI, which confirmed ChatGPT’s diagnosis.

Future generations of generative AI, pretrained with data from people’s electronic health records and fed with information about cognitive biases, will be able to spot these types of errors when they occur.

Deviation from standard practice will result in alerts, bringing cognitive errors to consciousness, thus reducing the likelihood of misdiagnosis and medical error. Rather than resisting this kind of objective second opinion, I hope clinicians will embrace it. The opportunity to prevent harm would constitute a major advance in medical care.

Don’t Let Your Hospital Be Boeing

Posted on by • Posted in Communication, Culture, Key Metrics, Key Performance Indicators, Leadership Culture, Leadership Listens, Leadership Rounding, Leadership Trust, Lean Process Improvement, Quality Control, Quality of Care, Reliable, Training • Leave a comment
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If you haven’t noticed (but I am sure you have) American business can be very unsettling from time to time, and occasionally the bigger the business, the more unsettling it gets. Exhibit A right now for this observation is, of course, the Boeing Company.

For years Boeing was an iconic, high reliability company; a worldwide leader in the growth of airplane transportation. As Bill Saporito wrote in the January 23 New York Times, Boeings’ airplanes were industry-changing, including the 707 jet in 1957, the 747 introduced in 1970, and perhaps the most successful commercial plane in aviation history, the 737.

But when things go bad, they can, indeed, go very bad. The newly designed 737 MAX crashed twice, once in 2018 and again in 2019, with a loss of life of 346 people. Now this year, a door plug fell off the Alaska Airlines Boeing 737 Max 9 at 16,000 feet and subsequent investigation revealed the possibility of missing bolts. All 737 MAX 9s were grounded while a special investigation was convened. Manufacturing airplanes is a special enterprise; lives are at stake. Airlines and the flying public take these Boeing problems very seriously.

What went wrong at Boeing?

Everybody has an opinion. One popular interpretation goes all the way back to Boeing’s merger in 1997 with McDonell Douglas. Recent articles suggest that prior to 1997 Boeing had a very dominant “engineering” culture. After the McDonell Douglas merger, the Boeing culture took a more “business” turn. That is the speculation anyway.

What strikes me here is the similarity between Boeing and the American hospital industry. Boeing “manufactures” planes and hospitals “manufacture” healthcare.

Neither industry can make mistakes; manufacturing errors in both cases change lives and cause real personal and societal pain. For both Boeing and hospitals, high reliability and error-free execution is the only acceptable business model.

Why is this analogy to Boeing apt and important?

Because American healthcare is likely the most intricate enterprise humanity has ever engineered. Therapeutic interventions are increasingly effective but demand pinpoint diagnoses and precision treatment. All of this is happening within profound technological complexity. The opportunity for regrettable manufacturing error—in fact the likelihood of such error—is so significant that no American hospital can possibly take for granted that high reliability processes and culture are properly in place and remain in place.

So what can hospitals do to keep from being Boeing?

In all candor, this question is over my paygrade, so for an experienced and nuanced answer, I turned to Allan Frankel, MD. Dr. Frankel is an anesthesiologist and former hospital executive who founded Safe and Reliable Healthcare after evaluating one too many disasters in healthcare delivery. He is currently an Executive Principal at Vizient Inc. Dr. Frankel offered the following high reliability tutorial:

  1. High reliability manufacturing is directly dependent on the culture of the organization in question. Everyday excellence which leads to high reliability is dependent on the collective mindset and social norms of your workforce. Any high reliability workforce must trust its leadership and believe that the workforce values and leadership values are aligned. Further, a high reliability culture gives the workforce a sense of purpose and the opportunity to be their best professional selves on the job.
  2. In the workplace, bi-directional communication is essential. Leaders and managers must round, see the actual work firsthand, learn what it is like to perform the work, and talk to individuals about the challenges of doing the work. Under best practices senior leaders should round 10% to 20% of their time. Line managers should round 80% to 90% of their time.
  3. Workers, on the other hand, must have a sense of voice and agency. Voice means that workers are able to speak up about their concerns and ideas. Agency means that when workers do speak up, they see their ideas and concerns influence their work environment for the better.
  4. Voice and agency require that workers feel safe in the high reliability process and that when identifying defects in the manufacturing process, they will be treated fairly. And importantly, that having the courage to speak up is an organizational attribute that is perceived as worthy. Such worthiness is described by discrete concepts including “psychological safety,” just culture,” and “respect.” Each of these concepts is definable and requires focused and ongoing training.
  5. Concepts 3 and 4 require close attention and care and feeding. Functionally, this happens by robust leader rounding, robust managerial huddles, and timely feedback regarding manufacturing concerns and weaknesses. These activities need to be structural and must be built into a system of operations—such systems are often referred to as “standard work.” These changes plus the right frame of mind functionally drive improvement and change. Dr. Frankel noted “it’s not complicated, but as the Boeing example illustrates, the high reliability philosophy must be perpetually nourished.”
  6. Once all the above is in place, there needs to be an effector arm. Process improvement skills are required to take ideas and concerns and test and implement them. Quality personnel must check on the changes as they are being made and audit operations. Dr. Frankel adds that this part of the high reliability journey is very often under-resourced in healthcare organizations, with the result that the overall process feels less effective so the activities stop occurring.
  7. Training and skills are paramount. Skills come from training and reading. You should be thinking here about the “10,000 hours concept.” Worthy attitudes must be defined by your organization and then uniformly expected of all staff. Finally, behaviors can be structured, expectations set, and measures and metrics identified.

As you can see from the suggested activities, the foundations of high reliability are not rocket science. They require the right frame of mind, attention to detail, and clear accountability of all involved. No hospital should let that metaphorical 737 MAX 9 door plug fall off at 16,000 feet. It was, without question, a terrifying manufacturing moment.

The Three In-bound Truth Bombs set to Explode in U.S. Healthcare

Posted on by • Posted in ACA, Administrative Burden, Affordability, Health Insurance Coverage Adequacy, Health System, Healthcare Reform, High Deductible Health Plans, Hospital, Hospital Industry, Medicare Advantage, Outcomes, Pharmaceutical Industry, Primary Care, Quality of Care, Regulation, Tax Exempt Status, Truth, Truth Unvarnished, Underinsured, Uninsured • Leave a comment
The Three In-bound Truth Bombs set to Explode in U.S. Healthcare

In Sunday’s Axios’ AM, Mike Allen observed “Republicans know immigration alone could sink Biden. So, Trump and House Republicans will kill anything, even if it meets or exceeds their wishes. Biden knows immigration alone could sink him. So he’s willing to accept what he once considered unacceptable — to save himself.”

Mike called this a “truth Bomb” and he’s probably right: the polarizing issue of immigration is tantamount to a bomb falling on the political system forcing well-entrenched factions to re-think and alter their strategies.

In 2024, in U.S. healthcare, three truth bombs are in-bound. They’re the culmination of shifts in the U.S.’ economic, demographic, social and political environment and fueled by accelerants in social media and Big Data.

Truth bomb: The regulatory protections that have buoyed the industry’s growth are no longer secure. 

Despite years of effectively lobbying for protections and money, the industry’s major trade groups face increasingly hostile audiences in city hall, state houses and the U.S. Congress.

The focus of these: the business practices that regulators think protect the status quo at the public’s expense. Example: while the U.S. House spent last week in their districts, Senate Committees held high profile hearings about Medicare Advantage marketing tactics (Finance Committee), consumer protections in assisted living (Special Committee on Aging), drug addiction and the opioid misuse (Banking) and drug pricing (HELP). In states, legislators are rationalizing budgets for Medicaid and public health against education, crime and cybersecurity and lifting scope of practice constraints that limit access.

Drug makers face challenges to patents (“march in rights”) and state-imposed price controls. The FTC and DOJ are challenging hospital consolidation they think potentially harmful to consumer choice and so. Regulators and lawmakers are less receptive to sector-specific wish lists and more supportive of populist-popular rules that advance transparency, disable business relationships that limit consumer choices and cede more control to individuals. Given that the industry is built on a business-to-business (B2B) chassis, preparing for a business to consumer (B2C) time bomb will be uncomfortable for most.

Truth bomb: Affordability in U.S. is not its priority.

The Patient Protection and Affordability Act 2010 advanced the notion that annual healthcare spending growth should not exceed more than 1% of the annual GDP.  It also advanced the premise that spending should not exceed 9.5% of household adjusted gross income (AGI) and associated affordability with access to insurance coverage offering subsidies and Medicaid expansion incentives to achieve near-universal coverage. In 2024, that percentage is 8.39%.

Like many elements of the ACA, these constructs fell short: coverage became its focus; affordability secondary.

The ranks of the uninsured shrank to 9% even as annual aggregate spending increased more than 4%/year. But employers and privately insured individuals saw their costs increase at a double-digit pace: in the process, 41% of the U.S. population now have unpaid medical debt: 45% of these have income above $90,000 and 61% have health insurance coverage. As it turns out, having insurance is no panacea for affordability: premiums increase just as hospital, drug and other costs increase and many lower- and middle-income consumers opt for high-deductible plans that expose them to financial insecurity. While lowering spending through value-based purchasing and alternative payments have shown promise, medical inflation in the healthcare supply chain, unrestricted pricing in many sectors, the influx of private equity investing seeking profit maximization for their GPs, and dependence on high-deductible insurance coverage have negated affordability gains for consumers and increasingly employers. Benign neglect for affordability is seemingly hardwired in the system psyche, more aligned with soundbites than substance.

Truth bomb: The effectiveness of the system is overblown.

Numerous peer reviewed studies have quantified clinical and administrative flaws in the system.  For instance, a recent peer reviewed analysis in the British Medical Journal concluded “An estimated 795 000 Americans become permanently disabled or die annually across care settings because dangerous diseases are misdiagnosed. Just 15 diseases account for about 50.7% of all serious harms, so the problem may be more tractable than previously imagined.”

The inadequacy of personnel and funding in primary and preventive health services is well-documented as the administrative burden of the system—almost 20% of its spending.  Satisfaction is low. Outcomes are impressive for hard-to-diagnose and treat conditions but modest at best for routine care. It’s easier to talk about value than define and measure it in our system: that allows everyone to declare their value propositions without challenge.

Truth bombs are falling in U.S. healthcare. They’re well-documented and financed. They take no prisoners and exact mass casualties.

Most healthcare organizations default to comfortable defenses. That’s not enough. Cyberwarfare, precision-guided drones and dirty bombs require a modernized defense. Lacking that, the system will be a commoditized public utility for most in 15 years.

PS: Last week’s report, “The Holy War between Hospitals and Insurers…” (The Keckley Report – Paul Keckley) prompted understandable frustration from hospitals that believe insurers do not serve the public good at a level commensurate with the advantages they enjoy in the industry. However, justified, pushback by hospitals against insurers should be framed in the longer-term context of the role and scope of services each should play in the system long-term. There are good people in both sectors attempting to serve the public good. It’s not about bad people; it’s about a flawed system.

JPM 2024 just wrapped. Here are the key insights

Posted on by • Posted in Artificial Intelligence Generative, Cost Management, Cost Reduction, Denial, Denial Management, Denial Rates, Digital Health, Disruption, Financial Distress, Financial Instability, Financial Performance, Financial Pressure, Financial Strength, Financial Transparency, Financial Viability, Financially Distressed, Health System, Hospital, Hospital Independence, Labor Spend Management, Medicare Advantage, Operating Margin, Operating Margin Drivers, Operating Metrics, Pharmacy Benefits Management, Quality Measures, Quality of Care, Workforce Retention, Workforce Shortages • Leave a comment

https://www.advisory.com/daily-briefing/2024/01/23/jpm-takeaways-ec#accordion-718cb981ab-item-4ec6d1b6a3

Earlier this month, leaders from more than 400 organizations descended on San Francisco for J.P. Morgan‘s 42nd annual healthcare conference to discuss some of the biggest issues in healthcare today. Here’s how Advisory Board experts are thinking about Modern Healthcare’s 10 biggest takeaways — and our top resources for each insight.

How we’re thinking about the top 10 takeaways from JPM’s annual healthcare conference 

Following the conference, Modern Healthcare  provided a breakdown of the top-of-mind issues attendees discussed.  

Here’s how our experts are thinking about the top 10 takeaways from the conference — and the resources they recommend for each insight.  

1. Ambulatory care provides a growth opportunity for some health systems

By Elizabeth Orr, Vidal Seegobin, and Paul Trigonoplos

At the conference, many health system leaders said they are evaluating growth opportunities for outpatient services. 

However, results from our Strategic Planner’s Survey suggest only the biggest systems are investing in building new ambulatory facilities. That data, alongside the high cost of borrowing and the trifurcation of credit that Fitch is predicting, suggests that only a select group of health systems are currently poised to leverage ambulatory care as a growth opportunity.  

Systems with limited capital will be well served by considering other ways to reach patients outside the hospital through virtual care, a better digital front door, and partnerships. The efficiency of outpatient operations and how they connect through the care continuum will affect the ROI on ambulatory investments. Buying or building ambulatory facilities does not guarantee dramatic revenue growth, and gaining ambulatory market share does not always yield improved margins.

While physician groups, together with management service organizations, are very good at optimizing care environments to generate margins (and thereby profit), most health systems use ambulatory surgery center development as a defensive market share tactic to keep patients within their system.  

This approach leaves margins on the table and doesn’t solve the growth problem in the long term. Each of these ambulatory investments would do well to be evaluated on both their individual profitability and share of wallet. 

On January 24 and 25, Advisory Board will convene experts from across the healthcare ecosystem to inventory the predominant growth strategies pursued by major players, explore considerations for specialty care and ambulatory network development, understand volume and site-of-care shifts, and more. Register here to join us for the Redefining Growth Virtual Summit.  

Also, check out our resources to help you plan for shifts in patient utilization:  

2. Rebounding patient volumes further strain capacity

By Jordan Peterson, Eliza Dailey, and Allyson Paiewonsky 

Many health system leaders noted that both inpatient and outpatient volumes have surpassed pre-pandemic levels, placing further strain on workforces.  

The rebound in patient volumes, coupled with an overstretched workforce, underscores the need to invest in technology to extend clinician reach, while at the same time doubling down on operational efficiency to help with things like patient access and scheduling. 

For leaders looking to leverage technology and boost operational efficiency, we have a number of resources that can help:  

3. Health systems aren’t specific on AI strategies

By Paul Trigonoplos and John League

According to Modern Healthcare, nearly all health systems discussed artificial intelligence (AI) at the conference, but few offered detailed implementation plans and expectations.

Over the past year, a big part of the work for Advisory Board’s digital health and health systems research teams has been to help members reframe the fear of missing out (FOMO) that many care delivery organizations have about AI.  

We think AI can and will solve problems in healthcare. Every organization should at least be observing AI innovations. But we don’t believe that “the lack of detail on healthcare AI applications may signal that health systems aren’t ready to embrace the relatively untested and unregulated technology,” as Modern Healthcare reported. 

The real challenge for many care delivery organizations is dealing with the pace of change — not readiness to embrace or accept it. They aren’t used to having to react to anything as fast-moving as AI’s recent evolution. If their focus for now is on low-hanging fruit, that’s completely understandable. It’s also much more important for these organizations to spend time now linking AI to their strategic goals and building out their governance structures than it is to be first in line with new applications.  

Check out our top resources for health systems working to implement AI: 

4. Digital health companies tout AI capabilities

By Ty Aderhold and John League

Digital health companies like Teladoc, R1 RCM, Veradigm, and Talkspace all spoke out about their use of generative AI. 

This does not surprise us at all. In fact, we would be more surprised if digital health companies were not touting their AI capabilities. Generative AI’s flexibility and ease of use make it an accessible addition to nearly any technology solution.  

However, that alone does not necessarily make the solution more valuable or useful. In fact, many organizations would do well to consider how they want to apply new AI solutions and compare those solutions to the ones that they would have used in October 2022 — before ChatGPT’s newest incarnation was unveiled. It may be that other forms of AI, predictive analytics, or robotic process automation are as effective at a better cost.  

Again, we believe that AI can and will solve problems in healthcare. We just don’t think it will solve every problem in healthcare, or that every solution benefits from its inclusion.  

Check out our top resources on generative AI: 

5. Health systems speak out on denials

By Mallory Kirby

During the conference, providers criticized insurers for the rate of denials, Modern Healthcare reports. 

Denials — along with other utilization management techniques like prior authorization — continue to build tension between payers and providers, with payers emphasizing their importance for ensuring cost effective, appropriate care and providers overwhelmed by both the administrative burden and the impact of denials on their finances. 

  Many health plans have announced major moves to reduce prior authorizations and CMS recently announced plans to move forward with regulations to streamline the prior authorization process. However, these efforts haven’t significantly impacted providers yet.  

In fact, most providers report no decrease in denials or overall administrative burden. A new report found that claims denials increased by 11.99% in the first three quarters of 2023, following similar double digit increases in 2021 and 2022. 

  Our team is actively researching the root cause of this discrepancy and reasons for the noted increase in denials. Stay tuned for more on improving denials performance — and the broader payer-provider relationship — in upcoming 2024 Advisory Board research. 

For now, check out this case study to see how Baptist Health achieved a 0.65% denial write-off rate.  

6. Insurers are prioritizing Star Ratings and risk adjustment changes

By Mallory Kirby

Various insurers and providers spoke about “the fallout from star ratings and risk adjustment changes.”

2023 presented organizations focused on MA with significant headwinds. While many insurers prioritized MA growth in recent years, leaders have increased their emphasis on quality and operational excellence to ensure financial sustainability.

  With an eye on these headwinds, it makes sense that insurers are upping their game to manage Star Ratings and risk adjustment. While MA growth felt like the priority in years past, this focus on operational excellence to ensure financial sustainability has become a priority.   

We’ve already seen litigation from health plans contesting the regulatory changes that impact the bottom line for many MA plans. But with more changes on the horizon — including the introduction of the Health Equity Index as a reward factor for Stars and phasing in of the new Risk Adjustment Data Validation model — plans must prioritize long-term sustainability.  

Check out our latest MA research for strategies on MA coding accuracy and Star Ratings:  

7. PBMs brace for policy changes

By Chloe Bakst and Rachael Peroutky 

Pharmacy benefit manager (PBM) leaders discussed the ways they are preparing for potential congressional action, including “updating their pricing models and diversifying their revenue streams.”

Healthcare leaders should be prepared for Congress to move forward with PBM regulation in 2024. A final bill will likely include federal reporting requirements, spread pricing bans, and preferred pricing restrictions for PBMs with their own specialty pharmacy. In the short term, these regulations will likely apply to Medicare and Medicaid population benefits only, and not the commercial market. 

Congress isn’t the only entity calling for change. Several states passed bills in the last year targeting PBM transparency and pricing structures. The Federal Trade Commission‘s ongoing investigation into select PBMs looks at some of the same practices Congress aims to regulate. PBM commercial clients are also applying pressure. In 2023, Blue Cross Blue Shield of California‘s (BSC) decided to outsource tasks historically performed by their PBM partner. A statement from BSC indicated the change was in part due to a desire for less complexity and more transparency. 

Here’s what this means for PBMs: 

Transparency is a must

The level of scrutiny on transparency will force the hand of PBMs. They will have to comply with federal and state policy change and likely give something to their commercial partners to stay competitive. We’re already seeing this unfold across some of the largest PBMs. Recently, CVS Caremarkand Express Scripts launched transparent reimbursement and pricing models for participating in-network pharmacies and plan sponsors. 

While transparency requirements will be a headache for larger PBMs, they might be a real threat to smaller companies. Some small PBMs highlight transparency as their main value add. As the larger PBMs focus more on transparency, smaller PBMs who rely on transparent offerings to differentiate themselves in a crowded market may lose their main competitive edge. 

PBMs will have to try new strategies to boost revenue

PBM practice of guiding prescriptions to their own specialty pharmacy or those providing more competitive pricing is a key strategy for revenue. Stricter regulations on spread pricing and patient steerage will prompt PBMs to look for additional revenue levers.   

PBMs are already getting started — with Express Scripts reporting they will cut reimbursement for wholesale brand name drugs by about 10% in 2024. Other PBMs are trying to diversify their business opportunities. For example, CVS Caremark’s has offered a new TrueCost model to their clients for an additional fee. The model determines drug prices based on the net cost of drugs and clearly defined fee structures. We’re also watching growing interest in cross-benefit utilization management programs for specialty drugs.  These offerings look across both medical and pharmacy benefits to ensure that the most cost-effective drug is prescribed for patients. 

Check out some of our top resources on PBMs:  

To learn more about some of the recent industry disruptions, check out:   

8. Healthcare disruptors forge on

 By John League

At the conference, retailers such as CVS, Walgreens, and Amazon doubled down on their healthcare services strategies.

Typically, disruptors do not get into care delivery because they think it will be easy. Disruptors get into care delivery because they look at what is currently available and it looks so hard — hard to access, hard to understand, and hard to pay for.  

Many established players still view so-called disruptors as problematic, but we believe that most tech companies that move into healthcare are doing what they usually do — they look at incumbent approaches that make it hard for customers and stakeholders to access, understand, and pay for care, and see opportunities to use technology and innovative business models in an attempt to target these pain points.

CVS, Walgreens, and Amazon are pursuing strategies that are intended to make it more convenient for specific populations to get care. If those efforts aren’t clearly profitable, that does not mean that they will fail or that they won’t pressure legacy players to make changes to their own strategies. Other organizations don’t have to copy these disruptors (which is good because most can’t), but they must acknowledge why patient-consumers are attracted to these offerings.  

For more information on how disruptors are impacting healthcare, check out these resources:  

9. Financial pressures remain for many health systems

By Vidal Seegobin and Marisa Nives

Health systems are recovering from the worst financial year in recent history. While most large health systems presenting at the conference saw their finances improve in 2023, labor challenges and reimbursement pressures remain.  

We would be remiss to say that hospitals aren’t working hard to improve their finances. In fact, operating margins in November 2023 broke 2%. But margins below 3% remain a challenge for long-term financial sustainability.  

One of the more concerning trends is that margin growth is not tracking with a large rebound in volumes. There are number of culprits: elevated cost structures, increased patient complexity, and a reimbursement structure shifting towards government payers.  

For many systems, this means they need to return to mastering the basics: Managing costs, workforce retention, and improving quality of care. While these efforts will help bridge the margin gap, the decoupling of volumes and margins means that growth for health systems can’t center on simply getting bigger to expand volumes.

Maximizing efficiency, improving access, and bending the cost curve will be the main pillars for growth and sustainability in 2024.  

 To learn more about what health system strategists are prioritizing in 2024, read our recent survey findings.  

Also, check out our resources on external partnerships and cost-saving strategies:  

10. MA utilization is still high

By Max Hakanson and Mallory Kirby  

During the conference, MA insurers reported seeing a spike in utilization driven by increased doctor’s visits and elective surgeries.  

These increased medical expenses are putting more pressure on MA insurers’ margins, which are already facing headwinds due to CMS changes in MA risk-adjustment and Star Ratings calculations. 

However, this increased utilization isn’t all bad news for insurers. Part of the increased utilization among seniors can be attributed to more preventive care, such as an uptick in RSV vaccinations.  

In UnitedHealth Group‘s* Q4 earnings call, CFO John Rex noted that, “Interest in getting the shot, especially among the senior population, got some people into the doctor’s office when they hadn’t visited in a while,” which led to primary care physicians addressing other care needs. As seniors are referred to specialty care to address these needs, plans need to have strategies in place to better manage their specialist spend.   

To learn how organizations are bringing better value to specialist care in MA, check out our market insight on three strategies to align specialists to value in MA. (Kacik et al., Modern Healthcare, 1/12)

*Advisory Board is a subsidiary of UnitedHealth Group. All Advisory Board research, expert perspectives, and recommendations remain independent. 

Former Kaiser nurse awarded $41M in retaliation lawsuit

Posted on by • Posted in Health System, Hospital, Hospital Industry, Kaiser Permanente, Lawsuit, Lawsuit Retaliation, Nurse Registered (RN), Nurses, Patient Safety, Quality, Quality of Care • Leave a comment
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A Los Angeles jury awarded $41.49 million to a former nurse who said Kaiser Permanente’s hospitals and health plan retaliated against and eventually terminated her for raising issues with patient safety and care quality, MyNewsLA reported Dec. 12.

The former nurse, Maria Gatchalian, was awarded $11.49 million in compensatory damages, including $9 million for emotional distress, and $30 million in punitive damages.

“We stand by her termination and are surprised and disappointed in the verdict,” Murtaza Sanwari, senior vice president and area manager for Kaiser Permanente Woodland Hills/West Ventura County, told Becker’s in a statement. “Kaiser Permanente plans to appeal this decision and will maintain our high standards in protecting the health and safety of all our patients.” 

Before her termination in 2019, Ms. Gatchalian had worked at the Kaiser Permanente Woodland Hills Medical Center since 1989, first as a registered nurse in the neonatal intensive care unit and later as a charge nurse in that unit.

According to MyNewsLA, Ms. Gatchalian said she had repeatedly raised concerns with Kaiser management about patient safety and care quality related to alleged understaffing and was discouraged from submitting formal complaints. Oakland, Calif.-based Kaiser argued in court that Ms. Gatchalian admitted she had placed her bare feet on equipment in the NICU, and the organization made the decision to terminate her following her conduct.

“We work hard to make Kaiser Permanente a great place to work and a great place to receive care,” Mr. Sanwari said. “The allegations in this lawsuit are at odds with the facts we showed in the courtroom.” 

“To be clear, this charge nurse’s job was to be a leader for other nurses, ensure the standards of care were followed and to protect the neonatal babies entrusted to our care. She was terminated in 2019 following an incident where she was found sitting in a recliner in the neonatal intensive care unit, on her personal phone and resting her bare feet on an isolette with a neonatal infant inside. Neonatal intensive care units are critical care units designed for critically ill babies most often born prematurely and very susceptible to infections.

The isolette, where this nurse placed her bare feet, is a protective environment designed to shield the infant from infection causing germs. Placing her bare feet on the isolette may have created risk to the infant which could have been life threatening. Her actions were egregious and in violation of our infection control policies and standards.”

FDA approves latest weight-loss drug while AMA endorses coverage for obesity treatments

Posted on by • Posted in American Medical Association (AMA), Food and Drug Administration (FDA), Pharmaceutical Industry, Quality of Care, Quality of Life, Return on Investment, Wegovy, Weight Loss Drugs, Zepbound • Leave a comment

https://mailchi.mp/169732fa4667/the-weekly-gist-november-17-2023?e=d1e747d2d8

Last week, the Food and Drug Administration (FDA) announced the approval of Eli Lilly’s drug tirzepatide for treating obesity. The drug, which will be sold under the name Zepbound for obesity, is already branded as Mounjaro for diabetes treatment. 

While Novo Nordisk’s blockbuster semaglutide drug (sold as Wegovy for obesity and Ozempic for diabetes) works only as a GLP-1 agonist, tirzepatide also targets a second receptor and has been shown to elicit greater weight loss.

Spurred by trial results demonstrating significant health benefits beyond weight loss tied to these drugs, the American Medical Association House of Delegates voted this week to adopt a policy advocating for insurance coverage of GLP-1-based obesity treatments, affirming that it regards obesity as a disease, and that patients left untreated for the condition are at greater risk for serious health consequences.

To date, most insurers and self-funded employers have resisted covering weight loss drugs due to their prices: Zepbound has a list price of $1,060 per month, while Wegovy is priced at around $1,300 per month.

The Gist: We have entered a new era in treating obesity. 

Even with payers and employers dragging their feet over coverage decisions, and Medicare remaining prohibited from covering weight-loss drugs by law, consumer demand for the drugs has been strong enough to outpace supply. Zepbound’s approval will hopefully both improve availability and exert downward pricing pressure. 

While these drugs will undoubtedly contribute to higher healthcare spending in the short term, the long-term benefits of significant weight loss, combined with cardiovascular risk reduction, could lower healthcare costs over the patient’s lifespan—although the payer “holding the bag” for the cost today may not see the return, given that as many as 20 percent of individuals with commercial insurance switch carriers every year.