WASHINGTON — All the healthcare data being collected on patients won’t do any good unless it’s funneled to doctors and other clinicians who can act on it, Dan Mendelson, founder of consulting firm Avalere Health, told health insurance executives gathered here.
“We have the [patient] data; we can look at cohorts, do predictive analytics … to predict where patients are likely to get in trouble and how to engage [them] in a cost-effective way,” Mendelson said Wednesday at a health policy conference sponsored by America’s Health Insurance Plans. “But it’s not enough to have the information; you have to have a connection to physicians who are actually touching the patients … That targeted intervention is really necessary to reap the benefits of the data. Data without intervention is a science experiment.”
A relationship with physicians “is very, very important and underlies a lot of the better work that’s being done right now … it’s about interaction, where the clinician — physician, nurse, or phone operator calling the patient for a low-cost intervention — is engaging in a way that improves patient health.”
Having that link with doctors is one reason “why you see plans so engaged in the healthcare delivery system — buying delivery systems, partnering with them, contracting with them, and the like,” he said. “It’s also why you see so much interest in value-based purchasing. When you bring value into the equation and compensate your providers … that’s where you can have that targeted intervention, achieve cost savings, and improve patient care.”
Payers have become increasingly interested in value-based purchasing contracts, especially for cost-saving reasons, Mendelson said, citing a survey his firm conducted which found that 74% of respondents listed cost savings as an advantage with value-based contracts. Other advantages lagged well behind — improved patient outcomes was cited by 44%, followed by the contracts’ assurance that the product performs as advertised (41%), and improved relations between payers and manufacturers (24%).
But not everyone understands the need for cost savings, he added. “I’ve had many conversations with pharmaceutical executives where they have an idea for a value-based [purchasing] program, but it won’t save the plan any money.” And yet, there are plenty of places where a value-based contract could produce a win for both sides — “cholesterol management is a great one; reducing infections in the hospital [is another],” Mendelson said.
In the meantime, technology companies are investing in healthcare, but so far without much effect, he continued. “I’ve lived through the last 25 years of seeing great comments from different large IT [information technology] companies saying they’re going to revolutionize healthcare, and it hasn’t happened. [Instead], a lot of the innovation I see is coming from really small companies with tangible and practical solutions.”
Mendelson said he recently looked at a company that had a great compliance module for Crohn’s disease and colitis. “They improved the quality of care, reduced exacerbations, improved compliance with medication, and saved the plan a significant amount of money. They’re selling this tool and it’s very attractive. It was developed by a group of Crohn’s physicians — not Amazon and not Google; it’s just a practical solution that works. And I think it’s really what the plans need right now.”
One big tech investment that Mendelson said he found interesting was Google’s investment in Oscar, a small health insurer that’s betting on using big data to disrupt the industry. “[These large] companies are getting into the consumer revenue stream, and health plans are ultimately the consumer revenue stream in healthcare,” he said. “You think about Apple and Google and Amazon with market capitalizations of over $1 trillion and health plans don’t have that much value, even the largest ones. The idea that a tech company will start to make an acquisition in plan space — that I find interesting.”
Investing in improvements in patients’ social determinants of health — non-medical areas such as housing, transportation, and food insecurity — is another potentially big area, he said. “It’s a major opportunity for plans to position around this and make it real. The more plans can address social determinants of health, [the more] plans can become truly organizations dedicated to health as opposed to organizations dedicated to incurring medical costs, and that to me is a bright future and a bright way to position the industry.”