Changing American Demographics Make Hospital Operations Harder

https://www.kaufmanhall.com/insights/thoughts-ken-kaufman/changing-american-demographics-make-hospital-operations-harder

Regular readers know I’ve long been curious about the forces driving one essential question in healthcare today:

Why is it so hard to run a hospital now? One area worth exploring is the interplay between the healthcare system and our nation’s changing demographics.

Baby Boomers have been displaced as the largest generation of adults in America. Millennials now hold that position, and Gen Z will likely outnumber Baby Boomers in the workplace sometime this year. Our nation is rapidly diversifying, as more than two-fifths of Americans identify as people of color.

It’s not just a matter of who we are as a nation that’s changing; how we live is evolving, too. The number of 40-year-olds who’ve never been married reached record highs in 2022, according to the Pew Research Center, dovetailing with a steadily growing trend since 1970 toward single living.

The U.S. Census published a report earlier this year showing that nearly 29% of American households include only one person. Further, the U.S. fertility rate is at an all-time low — and, according to a Pew survey, may not recover, given that 47% of those under 50 said they were unlikely to have children. That’s an increase of 10 percentage points since 2018.

The effects of this are starting to shape our broader culture. Solo living has been cited as a contributing factor to the housing crisis, and we’re starting to hear more about how people are grappling with the practical implications of retiring while living alone. This column in The New York Times is just one example. 

As for the potential health effects of living alone, in 2023, U.S. Surgeon General Vivek Murthy raised an alarm with a report documenting the negative effects of social isolation on individual and public health. Murthy outlined a host of risks, including cardiovascular disease, hypertension, diabetes and increased susceptibility to infectious disease. Mental health is a major concern. A 2024 study published in National Health Statistics Reports found that people who live alone were more likely to be depressed, particularly if they lacked social or emotional support. 

All of this adds up to an increasing burden on the U.S. healthcare system.

As providers who care for the socially isolated already know, it’s impossible to operate as usual if a patient lacks family support. Hospitals and the traditional American family structure are fundamentally intertwined. When family support is not available for a medical emergency, then the entire hospital episode becomes more fragile. Patient discharge procedures assume someone is available at home to help with care, assist in transporting patients for follow-up visits, and engage with the business office around billing and insurance.

Without this family safety net, the potential for readmission rises, harming patient outcomes, increasing costs and putting quality ratings at risk. The rise in younger people living alone also raises further financial implications, given that about 45% of Americans access health insurance through employer-sponsored programs. If someone living alone becomes too sick to work, patients may be less able to pay for care when they need it most.

This is just another in a long list of challenging hospital operational dilemmas. How best to respond to such profound change in the American demographic landscape? The right strategy may be to re-think consumer segmentation.

Consumer segmentation has become very popular at the clinical product level, but perhaps the next level of service segmentation is not among disease types but based on demographic characteristics. 

As an increasing portion of the American population has less family support to navigate a hospital stay or chronic illness, it will become more important to identify these patients and determine which new and enhanced services need to be provided to them by the hospital. Social work programs will need to be more robust, and health systems should invest in community partnerships to help bridge the resource gap. But the wide-ranging nature of patients’ practical needs will likely require healthcare leaders to think creatively. 

Consider the scope:

  • Care coordinators: Particularly for patients with complex conditions, it may be beneficial to designate a care coordinator to oversee healthcare planning.
  • Home health care: Without family members to help with day-to-day care, more nurses and aides will be needed to provide healthcare at home as well as help with day-to-day living. For patients with less demanding healthcare needs, adult day care may be useful.
  • Medication management: Patients need to understand how to take their medications, watch for potential side effects and interactions, and develop a system to make sure they take them on time. Further, they may need help navigating the pharmacy, either in getting prescriptions filled or with financial assistance programs.
  • Meal delivery: Nutrition is vital to a patient’s recovery, and ensuring patients have access to healthy options can help to reduce the likelihood of readmission.
  • Personal emergency response systems: Patients may need devices to call for help during an emergency as well as medical bracelets or other methods for communicating important information to first responders.
  • Housekeeping assistance: Hospitals may need to help connect patients with resources to maintain clean, safe homes. 
  • Volunteer companions: While volunteer companions usually help elderly patients with social interaction and basic needs, it may be necessary to develop programs that target a wider range of ages.
  • Transportation services: Patients need help getting to and from follow-up visits.
  • Telehealth: Remote care will become increasingly important. Clinical services should consider whether care plans could be adjusted to reduce the number of in-person visits.

Beyond targeting resources, consumer segmentation also offers an opportunity to communicate with patients in a more effective and personalized way. This sort of engagement fosters trust and increases loyalty that’s particularly important, given the intimate nature of healthcare.

It’s long been true that the stronger the family system, the better off hospitals are. But as the concept of the American family shifts, and in this case, unwinds, healthcare leaders need to be attuned to new demands—and nimble enough to meet them. This requires making the most of the information you have today to plan for tomorrow.

Health Systems partnering with affordable housing developers

https://mailchi.mp/ea16393ac3c3/gist-weekly-march-22-2024?e=d1e747d2d8

Published last week in the New York Times, this piece highlights a growing trend in health system community benefit provision: partnering with developers to build affordable housing.

These partnerships have focused on a range of housing needs, from transitional housing for people experiencing homelessness, to housing for people who need special care, to affordable housing for hospital employees. Many of these projects also include co-located medical clinics to make it easier for residents to access healthcare services, and some are even being planned on health system-owned property. 

The Gist: Housing security has long been a significant social determinant of health, something that most providers recognize every day, given that a record number of Americans are currently experiencing homelessness. 

Among families with complex medical needs, stable housing was demonstrated to reduce adverse health outcomes in children by 20 percent. In addition to health systems, managed care organizations are also investing in different kinds of housing solutions, and at least 19 states are directing Medicaid dollars toward housing assistance.

Michael Dowling: The most pressing question to start the year

The new year is always an ideal time for healthcare leaders to reflect on the state of our industry and their own organizations, as well as the challenges and opportunities ahead.

As the CEO of a large health system, I always like to reflect on one basic question at the end of each year: Are we staying true to our mission? 

Certainly, maintaining an organization’s financial health must always be a priority but we should also never lose sight of our core purpose. In a business like ours that has confronted and endured a global pandemic and immense financial struggles over the past several years, I recognize it’s increasingly difficult to maintain our focus on mission while trying to find ways to pay for rising labor and supply costs, infrastructure improvements needed to remain competitive and other pressures on our day-to-day operations. 

After all, the investments we need to make to promote community wellness, mental health, environmental sustainability and health equity receive little or no reimbursement, negatively impacting our financial bottom lines. During an era of unprecedented expansion of Medicaid and Medicare, we get less and less relief from commercial insurers, whose denial and delay tactics for reimbursing medical claims continue to erode the stability of many health systems and hospitals, especially those caring for low-income communities. 

Despite those enormous pressures, it’s imperative that we continue to support underserved communities, military veterans struggling with post-traumatic stress, and intervention programs that help deter gun violence and addiction. 

The list of other worthy investments goes on and on: charity care to uninsured or underinsured patients who can’t pay their medical bills, funding for emergency services that play such a critical role during public health emergencies, nutritional services for families struggling to put food on the table, programs that combat human trafficking and support women’s health, the LGBTQIA+ community and global health initiatives that aid Ukraine, the Middle East and other countries torn apart by war, famine and natural disasters. 

We must also recognize the key role of healthcare providers as educators. School-based mental health programs are saving lives by identifying children exhibiting suicidal behaviors, anger management issues and other troublesome behaviors. School outreach efforts have the added benefit of helping health systems and hospitals address their own labor shortages by introducing young people to career paths that will help shape the future healthcare workforce. 

Without a doubt, the “to-do” list of community health initiatives that support our mission is daunting. We can’t do it all alone, but as the largest employers in cities and towns across America, health systems and hospitals can serve as a catalyst to get all sectors of our society — government, businesses, schools, law enforcement, churches, social service groups and other community-based organizations — to recognize that “health” goes far beyond the delivery of medical care. 

The health of individuals, families and communities hinges on the prevalence of good-paying jobs, decent and affordable housing, quality education, access to healthy foods, medical care, transportation, clean air and water, low prevalence of crime and illicit drugs, and numerous other variables that typically depend on the zip codes where we live. Those so-called social determinants of health are the driving factors that enable communities and the people who live there to either prosper or struggle, resulting in disparities that are the underlying cause of why so many cities and towns across the country fall into economic decay and become havens for crime and hotbeds for gun violence, which shamefully is now the leading cause of death for children and adolescents. 

To revive these underserved communities, many of which are in our own backyards, we have to look at all of the socioeconomic issues they struggle with through the prism of health and use the collective resources of all stakeholders to bring about positive change. 

Health is how we work together to build a sense of community. Having a healthy community also requires everyone doing what they can to tone down the political rhetoric and social media-fueled anger that is polarizing our society. Health is bringing back a sense of civility and respect in our public discourse, and promoting the values of honesty, decency and integrity. 

As healthcare providers and respected business leaders, we should all make a New Year’s resolution to stay true to our mission and do what we can within our communities to bring oxygen to hope, optimism and a healthier future. 

Getting serious about providing community benefit

https://mailchi.mp/59f0ab20e40d/the-weekly-gist-october-27-2023?e=d1e747d2d8

How should health systems spend their “community benefit” dollars?

That question was at the heart of a discussion we participated in recently at a member board meeting. To maintain their nonprofit status, all health systems are required to devote a portion of their earnings to activities that benefit the communities they serve, based on an assessment of local health needs.

The question our member’s board was grappling with, led by the system’s executive team, was how to ensure their “investment” in the community is as leveraged as possible, and generates the greatest “bang for the buck” in terms of better community health. 

As the importance of addressing the social determinants of health grows, many systems are trying to target their resources toward activities that that enhance their ability to improve health status, and to reduce the barriers to better health faced by many. That requires a level of rigor and commitment to “community ROI” that goes beyond simply pointing to charity care statistics and the number of uninsured served.

What most impressed us in the discussion was the application of the same investment mindset to community benefit that the system brings to capital allocation decisions—with due attention to implementation plans, outcomes metrics, and accountability. 

As the system’s COO framed it, “We don’t just want to be a ‘piggy bank’ for charitable causes, we want to make sure our investment in the community is really making a difference” in local residents’ health. At the same time, the board recognized that its role extends beyond simply contributing dollars to acting as a convener and facilitator of other community organizations working together toward a common set of goals. A worthy discussion for the board, for sure, and a priority we’re seeing leading systems begin to embrace in a serious way.

How US is failing to keep its citizens alive into old age

https://mailchi.mp/9fd97f114e7a/the-weekly-gist-october-6-2023?e=d1e747d2d8

Published this week in the Washington Post, this unsparing article packages a year of investigative reporting into a thorough accounting of why US life expectancy is undergoing a rapid decline

After peaking in 2014, US life expectancy has declined each subsequent year, trending far worse than peer countries. In a quarter of US counties, working-age Americans are dying at the highest rates in 40 years, reversing decades of progress. While deaths from firearms and opioids play a role, chronic diseases remain our nation’s greatest killer, erasing more than double the years of life as all overdoses, homicides, suicides, and car accidents combined.

The drivers of this trend are too numerous to list, but experts suggest targeting “the causes of the causes”, namely social factors, as the death rate gap between the rich and poor has grown almost 15x faster than the income gap since 1980. 

The Gist: This reporting is a sobering reminder of the responsibilities—and failures—borne by our nation’s healthcare system. 

The massive death toll of chronic disease in this country is not an indictment of the care Americans receive, but of the care and other resources they cannot access or afford. 

While it’s not the mandate of health systems to reduce systemic issues like poverty, there is no solution to the problem without health systems playing a key role in increasing access to care, while convening community resources in service of these larger goals.

What does it take to live 100 years?

What does it take to live 100 years?

These predictors of a long health life may surprise you!

Watch the full TED Talk here: http://t.ted.com/jyX2zKP

15 innovative ideas for fixing healthcare from 15 brilliant minds

https://www.linkedin.com/pulse/15-innovative-ideas-fixing-healthcare-from-brilliant-pearl-m-d-/

After 18 years as CEO in Kaiser Permanente, I set my sights on improving the heatlh of the nation, hoping to find a way to achieve the same quality, technology and affordability our medical group delivered to 5 million patients on both coasts.

That quest launched the Fixing Healthcare podcast in 2018, and it inspired interviews with dozens of leaders, thinkers and doers, both in and around medicine. These experts shared innovative ideas and proven solutions for achieving (a) superior quality, (b) improved patient access, (c) lower overall costs, and (d) greater patient and clinician satisfaction.

This month, after 150 combined episodes, three questions emerged:

  • Which of the hundreds of ideas presented remain most promising?
  • Why, after five years and so many excellent solutions, has our nation experienced such limited improvements in healthcare?
  • And finally, how will these great ideas become reality?

To answer the first question, I offer 15 of the best Fixing Healthcare recommendations so far. Some quotes have been modified for clarity with links to all original episodes (and transcripts) included.

Fixing the business of medicine

1. Malcolm Gladwell, journalist and five-time bestselling author: “In other professions, when people break rules and bring greater economic efficiency or value, we reward them. In medicine, we need to demonstrate a consistent pattern of rewarding the person who does things better.”

2. Richard Pollack, CEO of the American Hospital Association (AHA): “I hope in 10 years we have more integrated delivery systems providing care, not bouncing people around from one unconnected facility to the next. I would hope that we’re in a position where there’s a real focus on ensuring that people get care in a very convenient way.”

Eliminating burnout

3. Zubin Damania, aka ZDoggMD, hospitalist and healthcare satirist: “In the culture of medicine, specialists view primary care as the weak medical students, the people who couldn’t get the board scores or rotation honors to become a specialist. Because why would you do primary care? It’s miserable. You don’t get paid enough. It’s drudgery. We must change these perceptions.”

4. Devi Shetty, India’s leading heart surgeon and founder of Narayana Health: “When you strive to work for a purpose, which is not about profiting yourself, the purpose of our action is to help society, mankind on a large scale. When that happens, cosmic forces ensure that all the required components come in place and your dream becomes a reality.”

5. Jonathan Fisher, cardiologist and clinician advocate: “The problem we’re facing in healthcare is that clinicians are all siloed. We may be siloed in our own institution thinking that we’re doing it best. We may be siloed in our own specialty thinking that we’re better than others. All of these divides need to be bridged. We need to begin the bridging.” 

Making medicine equitable

6. Jen Gunter, women’s health advocate and “the internet’s OB-GYN”: “Women are not listened to by doctors in the way that men are. They have a harder time navigating the system because of that. Many times, they’re told their pain isn’t that serious or their bleeding isn’t that heavy. We must do better at teaching women’s health in medicine.”

7. Amanda Calhoun, activist, researcher and anti-racism educator: “A 2015 survey showed that white residents and medical students still thought Black people feel less pain, which is wild to me because Black is a race. It’s not biological. This is actually an historical belief that persists. One of the biggest things we can do as the medical system is work on rebuilding trust with the Black community.”

Addressing social determinants of health

8. Don Berwick, former CMS administrator and head of 100,000 Lives campaign: “We know where the money should go if we really want to be a healthy nation: early childhood development, workplaces that thrive, support to the lonely, to elders, to community infrastructures like food security and transportation security and housing security, to anti-racism and criminal-justice reform. But we starve the infrastructures that could produce health to support the massive architecture of intervention.”

9. David T. Feinberg, chairman of Oracle Health: “Twenty percent of whether we live or die, whether we have life in our years and years in our life, is based on going to good doctors and good hospitals. We should put the majority of effort on the stuff that really impacts your health: your genetic code, your zip code, your social environment, your access to clean food, your access to transportation, how much loneliness you have or don’t have.”

Empowering patients

10. Elisabeth Rosenthal, physician, author and editor-in-chief of KHN“To patients, I say write about your surprise medical bills. Write to a journalist, write to your local newspaper. Hospitals today are very sensitive about their reputations and they do not want to be shamed by some of these charges.”

11. Gordon Chen, ChenMed CMO: “If you think about what leadership really is, it’s influence. Nothing more, nothing less. And the only way to achieve better health in patients is to get them to change their behaviors in a positive way. That behavior change takes influence. It requires primary care physicians to build relationship and earn trust with patients. That is how both doctors and patients can drive better health outcomes.”

Utilizing technology

12. Vinod Khosla, entrepreneur, investor, technologist: “The most expensive part of the U.S. healthcare system is expertise, and expertise can relatively be tamed with technology and AI. We can capture some of that expertise, so each oncologist can do 10 times more patient care than they would on their own without that help.”

13. Rod Rohrich, influential plastic surgeon and social media proponent: “Doctors, use social media to empower your audience, to educate them, and not to overwhelm them. If you approach social media by educating patients about their own health, how they can be better, how can they do things better, how they can find doctors better, that’s a good thing.”

Rethinking medical education

14. Marty Makary, surgeon and public policy researcher: “I would get rid of all the useless sh*t we teach our medical students and residents and fellows. In the 16 years of education that I went through, I learned stuff that has nothing to do with patient care, stuff that nobody needs to memorize.”

15. Eric Topol, cardiologist, scientist and AI expert: “It’s pretty embarrassing. If you go across 150 medical schools, not one has AI as a core curriculum. Patients will get well versed in AI. It’s important that physicians stay ahead, as well.”

Great ideas, but little progress

Since 2018, our nation has spent $20 trillion on medical care, navigated the largest global pandemic in a century and developed an effective mRNA vaccine, nearly from scratch. And yet, despite all this spending and scientific innovation, American medicine has lost ground.  

American life expectancy has dropped while maternal mortality rates have worsened. Clinician burnout has accelerated amid a growing shortage of primary care and emergency medicine physicians. And compared to 12 of its wealthiest global peers, the United States spends nearly twice as much per person on medical care, but ranks last in clinical outcomes.

Guests on Fixing Healthcare generally agree on the causes of stagnating national progress.

Healthcare system giants, including those in the drug, insurance and hospital industries, find it easier to drive up prices than to prevent disease or make care-delivery more efficient. Over the past decade, they’ve formed a conglomerate of monopolies that prosper from the existing rules, leaving them little incentive to innovate on behalf of patients. And in this era of deep partisan divide, meaningful healthcare reforms have not (and won’t) come from Congress.  

Then who will lead the way?

Industry change never happens because it should. It happens when demand and opportunity collide, creating space for new entrants and outsiders to push past the established incumbents. In healthcare, I see two possibilities:   

1. Providers will rally and reform healthcare

Doctors and hospitals are struggling. They’re struggling with declining morale and decreasing revenue. Clinicians are exiting the profession and hospitals are shuttering their doors. As the pain intensifies, medical group leaders may be the ones who decide to begin the process of change.

The first step would be to demand payment reform.

Today’s reimbursement model, fee-for-service, pays doctors and hospitals based on the quantity of care they provide—not the quality of care. This methodology pushes physicians to see more patients, spend less time with them, and perform ever-more administrative (billing) tasks. Physicians liken it to being in a hamster wheel: running faster and faster just to stay in place.

Instead, providers of care could be paid by insurers, the government and self-funded businesses directly, through a model calledcapitation.” With capitation, groups of providers receive a fixed amount of money per year. That sum depends on the number of enrollees they care for and the amount of care those individuals are expected to need based on their age and underlying diseases.

This model puts most of the financial risk on providers, encouraging them to deliver high-quality, effective medical care. With capitation, doctors and hospitals have strong financial incentives to prevent illnesses through timely and recommended preventive screenings and a focus on lifestyle-medicine (which includes diet, exercise and stress reduction). They’re rewarded for managing patients’ health and helping them avoid costly complications from chronic diseases, such as heart attacks, strokes and cancer.

Capitation encourages doctors from all specialties to collaborate and work together on behalf of patients, thus reducing the isolation physicians experience while ensuring fewer patients fall through the cracks of our dysfunctional healthcare system. The payment methodology aligns the needs of patients with the interests of providers, which has the power to restore the sense of mission and purpose medicine has lost.

Capitation at the delivery-system level eliminates the need for prior authorization from insurers (a key cause of clinician burnout) and elevates the esteem accorded to primary care doctors (who focus on disease prevention and care coordination). And because the financial benefits are tied to better health outcomes, the capitated model rewards clinicians who eliminate racial and gender disparities in medical care and organizations that take steps to address the social determinants of health.

2. Major retailers will take over

If clinicians don’t lead the way, corporate behemoths like Amazon, CVS and Walmart will disrupt the healthcare system as we know it. These retailers are acquiring the insurance, pharmacy and direct-patient-care pieces needed to squeeze out the incumbents and take over American healthcare.

Each is investing in new ways to empower patients, provide in-home care and radically improve access to both in-person and virtual medicine. Once generative AI solutions like ChatGPT gain enough computing power and users, tech-savvy retailers will apply this tool to monitor patients, enable healthier lifestyles and improve the quality of medical care compared to today.

When Fixing Healthcare debuted five years ago, none of the show’s guests could have foreseen a pandemic that left more than a million dead. But, had our nation embraced their ideas from the outset, many of those lives would have been saved. The pandemic rocked an already unstable and underperforming healthcare system. Our nation’s failure to prevent and control chronic disease resulted in hundreds of thousands of unnecessary deaths from Covid-19. Outdated information technology systems, medical errors and disparities in care caused hundreds of thousands more. As a nation, we could have done much better.

With the cracks in the system widening and the foundation eroding, disruption in healthcare is inevitable. What remains to be seen is whether it will come from inside or outside the U.S. healthcare system.

In healthcare’s game of Monopoly, one player will control the board

In healthcare, as in life, people devote a lot of time and attention to the way things should be. They’d be better off focusing on what actually could be.

As an example, 57% to 70% of American voters believe our nation “should” adopt a single-payer healthcare system like Medicare For All. Likewise, public health advocates insist that more of the nation’s $4 trillion healthcare budget “should” be spent on combating the social determinants of health: things like housing insecurity, low-wage jobs and other socioeconomic stresses. Neither of these ideas will happen, nor will dozens of positive healthcare solutions that “should” happen.

When the things that should happen don’t, there’s always a reason. In healthcare, the biggest roadblock to change is what I call the conglomerate of monopolies, which includes hospitalsdrug companiesprivate-equity-staked physicians and commercial health insurers. These powerful entities exert monopolistic control over the delivery and financing of the country’s medical care. And they remain fiercely opposed to any change in healthcare that would limit their influence or income.

This article concludes my five-part series on medical monopolies with an explanation of why (a) “should” won’t happen in healthcare but (b) industrywide disruption will.

Why government won’t lead the way

With the U.S. Senate split 51-49 and with virtually no chance of either party securing the 60 votes needed to avoid a filibuster, Congress will, at most, tinker with the medical system. That means no Medicare For All and no radical redistribution of healthcare funds.

Even if elected officials started down the path of major reform, healthcare’s incumbents would lobby, threaten to withhold campaign contributions (which have exceeded $700 million annually for the past three years) and swat down any legislative effort that might harm their interests.

In American politics, money talks. That won’t change soon, even if voters believe it should.

American employers won’t lead, either

Private payers wield significant power and influence of their own. In fact, the Fortune 500 represents two-thirds of the U.S. GDP, generating more than $16 trillion in revenue. And they provide health insurance to more than half the American population.

With all that clout, you’d think business executives would demand more from healthcare’s conglomerate of monopolies. You might assume they’d want to push back against the prevailing “fee for service” payment model, replacing it with a form of reimbursement that rewards doctors and hospitals for the quality (not quantity) of care they provide. You’d think they would insist that employees get their care through technologically advanced, multispecialty medical groups, which deliver superior outcomes when compared to solo physician practices.

Instead, companies take a more passive position. In fact, employers are willing to shoulder 5% to 6% increases in insurance premiums each year (double their average rate of revenue growth) without putting up much or any resistance.

One reason they tolerate hefty rate hikes—rather than battling insurers, hospitals and doctors— involves a surprising truth about insurance premiums. Business leaders have figured out how to transfer much of their added premium costs to employees in the form of high-deductible health plans. A high deductible plan forces the beneficiary to pay “first dollar” for their medical care, which significantly reduces the premium cost paid by the employer.

Businesses also realize that high deductibles will only financially burden employees who experience an unexpected, catastrophic illness or accident. Meaning, most workers won’t feel the sting in a typical year. As for employees with ongoing, expensive medical problems, employers typically don’t mind watching them walk out the door over high out-of-pocket costs. Their departures only reduce the company’s medical spend in future years.

Finally, businesses know that employee medical costs are tax deductible, which cushions the impact of premium increases. So, what starts as a 6% annual increase ends up costing employees 3%, the government 1% and businesses only 2%. In today’s strong labor market, which boasts the lowest unemployment rate in 54 years, businesses are reluctant to demand changes from healthcare’s biggest players—regardless of whether they should.

Leading the healthcare transformation

If there were a job opening for “Leader of the American Healthcare Revolution,” the applicant pool would be shallow.  

Elected officials would shy away, fearing the loss of campaign contributions. Businesses and top executives would pass on the opportunity, preferring to shift insurance costs to employees and the government. Patients would feel overwhelmed by the task and the power of the incumbents. Doctors, nurses and hospitals—despite their frustrations with the current system—would want to take small steps, fearful of the conglomerate of monopolies and the risks of disruptive change.

To revolutionize American medicine, a leader must possess three characteristics:

  1. Sufficient size and financial reserves to disrupt the entire industry (not just a small piece of it).
  2. Presence across the country to leverage economies of scale.
  3. Willingness to accept the risks of radical change in exchange for the potential to generate massive profits.

Whoever leads the way won’t make these investments because it “should happen.” They will take the chance because the upside is dramatically better than sitting on the sidelines.

The likely winner: American retailers

Amazon, CVS, Walmart and other retail giants are the only entities that fit the revolutionary criteria above. In healthcare’s game of monopoly, they’re the ones willing to take high-stakes risks and capable of disrupting the industry.

For years, these retailers have been acquiring the necessary game pieces (including pharmacy services, health-insurance capabilities and innovative care-delivery organizations) to someday take over American healthcare.

CVS Health owns health insurer Aetna. It bought value-based care company Signify Health for $8 billion, along with national primary care provider OakStreet Health for $10.6 billion. Walmart recently entered into a 10-year partnership with the nation’s largest insurance company, UnitedHealth, gaining access to its 60,000 employed physicians. Walmart then acquired LHC, a massive home-health provider. Finally, Amazon recently purchased primary-care provider One Medical for $3.9 billion and maintains close ties with nearly all of the country’s self-funded businesses.

Harvard business professor Clay Christensen noted that disruptive change almost always comes from outsiders. That’s because incumbents cling to overly expensive and inefficient systems. The same holds true in American healthcare.

The retail giants can see that healthcare is exorbitantly priced, uncoordinated, inconvenient and technologically devoid. And they recognize the hundreds of billions of dollars of revenue and they could earn by offering a consumer-focused, highly efficient alternative.

How will the transformation happen?

Initially, I believe the retail giants will take a two-pronged approach. They’ll (a) continue to promote fee-for-service medical services through their pharmacies and retail clinics (in-store and virtual) while (b) embracing every opportunity to grow their market share in Medicare Advantage, the capitated option for people over age 65.

And within Medicare Advantage, they’ll look for ways to leverage sophisticated IT systems and economies of scale, thus providing care that is better coordinated, technologically supported and lower cost than what’s available now.

Rather than including all community doctors in their network, they’ll rely on their own clinicians, augmented by a limited cohort of the highest-performing medical groups in the area. And rather than including every hospital as an inpatient option, they’ll contract with highly respected centers of excellence for procedures like heart surgery, neurosurgery, total-joint replacement and transplants, trading high volume for low prices.

Over time, they’ll reach out to self-funded businesses to offer proven, superior clinical outcomes, plus guaranteed, lower total costs. Then they’ll make a capitated model their preferred insurance plan for all companies and individuals. Along the way, they’ll apply consumer-driven medical technologies, including next generations of ChatGPT, to empower patients, provide continuous care for people with chronic diseases and ensure the medical care provided is safe and most efficacious.

Tommy Lasorda, the long-time manager of the Los Angeles Dodgers, once remarked, “There are three types of people. Those who watch what happens, those that make it happen and those who wonder what just happened.”

Lasorda’s quip describes healthcare today. The incumbents are watching closely but failing to see the big picture as retailer acquire medical groups and home health capabilities. The retail giants are making big moves, assembling the pieces needed to completely transform American medicine as we think of it today. Finally, tens of thousands of clinicians and thousands of hospital administrators are either ignoring or underestimating the retail giants. And, when they get left behind, they’ll wonder: What just happened?

The conglomerate of monopolies rule medicine today. Amazon, CVS and Walmart believe they should rule. And if I had to bet on who will win, I’d put my money on the retail giants.

A targeted approach to reducing healthcare disparities

https://mailchi.mp/efa24453feeb/the-weekly-gist-july-22-2022?e=d1e747d2d8

A recent piece in the Harvard Business Review demonstrates how SCAN Health Plan, a not-for-profit, California-based Medicare Advantage plan with over 270,000 members, was able to increase medication adherence among Black and Hispanic beneficiaries. Dr. Sachin Jain, CEO of SCAN, and his colleagues describe how identifying the specific causes of disparities in medication adherence, establishing clear financial incentives for senior leaders, and targeting investments enabled the insurer to reduce disparities by 35 percent within eighteen months. 

The Gist: Addressing complex and longstanding racial health disparities is an incredibly difficult but vital task. While there’s been plenty of discussion about the problem, there’s been a lack of effective solutions for healthcare organizations to deploy.

SCAN’s progress demonstrates how narrowing the focus down to a more specific issue can yield faster results. Jain and his colleagues write that SCAN’s next areas of focus are reducing disparities in diabetes control and flu vaccinations. We’re looking forward to learning about other innovative ways healthcare organizations are tackling long overdue gaps in care.    

The missing Americans: early death in the United States 1933-2021

Figure. Excess deaths in the U.S. relative to other wealthy nations, 1933-2021. Source: Human Mortality Database. Note: Figure shows the difference between the number of deaths that occurred in the U.S. each year and the number of deaths that would have occurred if the U.S. had age-specific mortality rates equal to the average of other wealthy nations. The comparison set includes Austria, Belgium, Canada, Denmark, Finland, France, Germany, Iceland, Italy, Japan, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom. The average of other wealthy nations excludes Portugal prior to 1940, Austria and Japan prior to 1947, Germany prior to 1956, and Luxembourg prior to 1960. From 1960, all countries are represented (solid dots).

COVID-19 led to a large increase in U.S. deaths. However, even before the pandemic, the U.S. had higher death rates than other wealthy nations. How many deaths could be avoided if the U.S. had the same mortality rates as its peers?

In a new study, we quantify the annual number of U.S. deaths that would have been averted over nearly a century if the U.S. had age-specific mortality rates equal to the average of 18 similarly wealthy nations. We refer to these excess U.S. deaths as “missing Americans.”

The annual number of “missing Americans” increased steadily beginning in the late 1970s, reaching 626,353 in 2019 (Figure). Excess U.S. deaths jumped sharply to 991,868 in 2020 and 1,092,293 in 2021 during the COVID-19 pandemic.

In 2021, nearly 1 out of every 3 U.S. deaths would have been averted if U.S. mortality rates had equaled those of its peer nations. Half of these excess deaths were among U.S. residents under 65 years. We estimate that the 1.1M excess deaths in 2021 were associated with 25M years of life lost, accounting for the number of years the deceased would otherwise be expected to live.

We also compared mortality rates of U.S. racial and ethnic groups with the international benchmark. Black and Native Americans accounted for a disproportionate share of the “missing Americans.” However, the majority of “missing Americans” were White non-Hispanic persons.

Our findings are consistent with recent reports that the life expectancy gap between the U.S. and peer nations widened during the pandemic, with U.S. life expectancy falling from 78.9 to 76.6 years. Life expectancy is widely reported, but it is a complex measure and may be misinterpreted as reflecting small differences in mortality at advanced ages.

In fact, the greatest relative differences in mortality between the U.S. and peer countries occur before age 65. In 2021, half of all deaths to U.S. residents under 65 years – and 90% of the increase in under-65 mortality since 2019 – would have been avoided if the U.S. had the mortality rates of other wealthy nations. In addition to the loss of life, these early deaths often leave behind child (and elder) dependents without key social and economic support.

Our calculations were based on recently released mortality data, obtained from the U.S. Centers for Disease Control and Prevention WONDER Database and the Human Mortality Database. The international comparison group included all available countries with relatively complete mortality data starting in 1960 or earlier, after excluding former communist countries. Our paper builds on prior analyses of excess deaths by our study team and by others.

We find a very large increase in excess U.S. deaths during the COVID-19 pandemic. However, this spike occurred on top of a growing trend that reached 600,000 excess deaths in 2019. Future COVID-19 deaths could be reduced with broader vaccine uptake, worker protections, and masking during surges. Even if COVID-19 mortality were eliminated, however, the U.S. would likely suffer hundreds of thousands of excess deaths each year, with many linked to firearms, opioids, and obesity.

Addressing excess deaths in the U.S. will require public health and social policies that target the root causes of U.S. health malaise, including fading economic opportunities and rising financial insecurity, structural racism, and failures of institutions at all levels of government to invest adequately in population health.