When the Tech Is There, But the Incentive Is Not

The most significant innovations do not always come from Silicon Valley. Sometimes, breakthroughs can occur only when the ways of old crumble.

That’s certainly the case in healthcare, according to experts who discussed the disconnect this week at a breakfast held by the journal NJBIZ in Somerset, New Jersey. The topic sprouted after an attendee noted that his organization has long had access to some technologies fawned over by industry types. What keeps healthcare behind, he argued, are stringent customs—like, say, the common insurance company rule approving reimbursement for ambulance trips only when the final destination is the emergency department.

Morey Menacker, DO, vice president of Hackensack Meridian Health’s physician division, claimed the problem is one of misguided and even conflicting incentives. “Why in 1995 did this not become a standard of care?” he said of innovations that have been around for some time. “The reason was that hospitals did not get paid for keeping people out of the hospital.”

The same line of logic pervades healthcare, though the culture is changing, he said. Physicians are often charged with keeping people out of the facility, but they field concerns from administrators when admission rates drop, he said. Similarly, some ambulance rides should not end at the emergency room, as another care center might better suit the patient, he added.

“It’s very clear to those of us who are in the trenches taking care of patients,” he said, “exactly what’s best for the patient.”

If institutional incentives come to align with that knowledge, healthcare will see greater advances, Menacker said. One possible example? If a physician manages 3500 patients, that provider might want to bring them in more often if they get “paid per click.” But if that physician were to earn money based on the overall health of the contingent—whether the doctor sees a given patient every day or only once a year—that represents a meaningful incentive switch.

It’s all about getting the best care for the best price, not the most care for the most money, he said. The shift toward value-based care stands to further adjust these incentives, experts across the industry have said.

Omar Baker, MD, co-president, chief quality and safety officer, and director of performance improvement for the North Jersey-based Riverside Medical Group, compared the existing arrangement to “medical schizophrenia.” He said administrators in a meeting could bemoan that emergency department, inpatient, and surgical volume are down. Yet an hour later, in an accountable care meeting, the same people urge providers to further reduce those numbers.

What’s more, healthcare is indeed a business, and businesses are hard-pressed to turn away customers. “Doctors aren’t doing this because they’re bad people,” Baker said. Rather, expenses have risen thanks to new technologies, like electronic health records systems, care paths, and larger staffs, he said.

“Can you imagine going to your board and saying, ‘Hey, we need to figure out how to sell fewer widgets?’” Joseph A. Carr, CPHIMS, chief information officer of the New Jersey Hospital Association and moderator of the talk, said. He then called for the “general consumerization” of healthcare.

Image: Luis Prado, from The Noun Project, Wikimedia Commons