By Todd Hixon Contributor, Forbes
AUGUST 20, 2014 – In this Forbes post by Neil Versel, David Nash of the Philadelphia’s Thomas Jefferson School of Population Health offers a great, pithy summary of ObamaCare’s strategy to reform U.S. healthcare: “No outcome, no income.” He’s talking about reforming the incentives for healthcare providers by paying them to produce results (health outcomes) rather than to churn out procedures, as has often been the case up to now.
Another simple but profound principle deserves equal attention: “An ounce of prevention is worth a pound [maybe a ton] of cure.” Or, as an old oil filter commercial put it, “Pay me now or pay me later.”
At the World Healthcare Congress this year, Dr. John Kitzhaber laid this out simply and starkly: your behavior, and the social context in which you live are the two big, controllable factors that influence your health (see chart below). The healthcare you receive is a small factor: only a 10% influence on your health status. Kitzhaber began his career as an MD, became a healthcare policy expert, and is now in his third term as governor of Oregon (and hence CEO of a very large healthcare payer).
Our healthcare system spends about 80% of its resources caring for people who are seriously ill. Both the incentives in the healthcare system and the culture of U.S. medicine reward the use of high levels of skill and technology to “cure disease”. And of course that is what we all want: when we are sick, we want to know that the medical system will cure us. This is “reactive” medicine: fixing the problem after it occurs.
If you start with the question, “How can healthcare resources be used most effectively to give people longer, higher quality life?” then it’s obvious that investment in programs that can change behavior, identify chronic disease early, and help people cope better with their social environment has much more leverage: this is “proactive” medicine. The 20% of healthcare resources spent here targets 55% of the health status pie, while the 80% of resources spent on reactive medicine targets 10% of the health status pie: that’s a 20x difference in the ratio of healthcare cost to potential effectiveness.
What is proactive medicine? It’s familiar stuff: mainly primary care, behavioral health, public health, and wellness programs. It’s the part of medicine that has been generally defunded and reduced in status in the last generation, as resources and culture focused on the high-tech cure and as the incentive system rewarded higher volumes of higher value procedures. Proactive medicine is difficult stuff, because if requires really getting to know people and working with them over time to change their lives.
But, it’s where the action is and will be going forward. And it’s the most promising answer to the trillion-dollar question: what can we do to improve our mediocre health outcomes, bring U.S. healthcare costs in line with peer countries, and remove the enormous burden that a grossly inefficient healthcare system imposes on our economy?
So I expect resources and attention to shift steadily to proactive medicine, and this will create big opportunities for innovators, including start-ups. Early examples are the reinvention of primary care that is occurring with Direct Primary Care (Iora), Concierge Medicine (MDVIP, MedicalOne), and retail clinics (MinuteClinic) and the “connected health” movement that increases our awareness of healthy behaviors and health status (Fitbit, Withings, Pebble). Connected health will accelerate when Apple AAPL -0.06% and Google GOOGL -0.37% launch their smart watches and health data toolkits for their mobile operating systems this fall. This is a huge opportunity to do well and do good.