Innovation opportunities from healthcare reform

President Obama signs the Patient Protection and Affordable Care Act, March 23, 2010 (Pete Souza/Wikimedia Commons)

National healthcare reform, including President Obama’s Affordable Care Act of 2010, is being driven by widespread dissatisfaction with the high cost and limited accessibility of care. Although we’ve yet to feel the full impact of these national reforms, the reform experience in Massachusetts indicates that mandated universal coverage, by itself, has failed to drive down costs.

So, in Massachusetts, we’re now in the next phase of healthcare reform, focusing on how to control and cut costs while still providing nearly universal access to high quality services and care. The need to bring down costs is stimulating healthcare innovation in three major areas – perhaps offering some lessons for the nation as it moves toward universal care.

1.  New payment models

One driver of cost is the traditional fee-for-service payment model, which rewards providers for volume rather than quality of care. In rethinking this inefficient system, payors are creating incentives for providers to focus on quality and patient outcomes, not on the volume of admissions and services.

Moving away from fee-for-service, new health care contracts are shifting financial risk to the provider.

New models garnering attention include integrated care delivery organizations such as Kaiser Permanente and accountable care organizations, which tie payment to quality metrics and to reductions in the total cost of care for a given patient population. Blue Cross Blue Shield’s Alternative Quality Contract moves providers from a fee-for-service structure, paying them based on the number of patients they see in combination with performance incentives.

Other models use bundled or episodic payments, issuing a single payment for all services related to an episode of care, or global payments, covering a patient’s care during a set period of time.

Each of these structures shifts financial risk from the payor to the provider – shifting the focus of care to patient outcomes and creating an environment for further innovation.

2.  Better care integration

When doctors share information about a patient they are all treating, outcomes improve and costs fall. Health systems are finding new ways to coordinate primary care with specialty care, creating a more integrated, more patient-focused approach.

The emerging innovations in payment models, care coordination and care delivery — though driven by cost-cutting — are turning out to be big wins for patients.

The “medical home” concept gives the primary care physician responsibility for all aspects of a patient’s care, putting the patient at the center of a truly integrated plan. At Children’s Hospital Boston, we are exploring care coordination models around specific conditions. The Headache Collaborative, for example, brings together neurologists with community pediatricians.

Electronic health records can play an important role in better care coordination. Through the MyChildren’s patient portal, primary care doctors can access medical records when their patients see a Children’s subspecialist or come to the emergency department. Reducing care fragmentation is good for payors, good for providers and, above all, good for our patients.

3. New kinds of care delivery

By leveraging technology, we can deliver care in fundamentally different ways that are cost-saving but still high quality. At Children’s we’re exploring the use of telehealth to shift the venue of care from our hospital and clinics to the patient’s home. Telehealth uses communication technologies to connect patients to providers remotely, often employing biometric devices like home glucometers or blood pressure monitors to send data to the physician. This can be not only more cost-effective, but more convenient for patients and arguably better for their health. It even provides physicians with clinically relevant information they didn’t have before, such as details of the patient’s home environment and how the family is managing day to day.

Doctor-patient teleconferencing may make some clinic visits unnecessary.

Telehealth systems can deliver direct patient care for chronic conditions, substitute for clinic visits and provide preventive care. Thanks to an Innovestment grant, our Critical Care, Anesthesia, Perioperative Extension (CAPE) program will soon offer at-home video consultations for children on home ventilators. Our Urology department is offering post-surgical virtual follow-up visits using a remotely controlled videoconferencing robot sent home with the patient.

Clinician-to-clinician virtual consultations are also possible. These can be real-time, allowing, say, an infectious disease subspecialist and a primary care doctor to consult on live video around a shared patient. Or, using “store and forward” technologies, a dermatologist, say, can interpret a suspicious rash based on images previously uploaded by a pediatrician. Community hospitals can tele-consult with specialists in advance of transferring a patient to Children’s, leading to better care in transit and more thoughtful utilization of transport helicopters and ambulances.

Healthcare reform in Massachusetts started with a focus on access to care, and has now shifted to cost-cutting. What’s exciting is that the emerging innovations in payment models, care coordination and care delivery are turning out to be big wins for patients. Care delivery innovations like telehealth will require new models of payment to make them viable, so the process will be iterative, but health care reform will be driving innovation for years to come.

Naomi Fried, PhD, is Children’s Hospital Boston’s first Chief Innovation Officer. She leads the Innovation Acceleration Program whose mission is to build and develop a program in clinical innovation, aimed at improving care quality and assisting the hospital in shaping the future of healthcare. Read more about her on our Bloggers page or the Innovation Acceleration Program website or follow her on Twitter @NaomiFried.