Many healthcare technologies are married to the fee-for-service model

Healthcare companies are looking to integrate technology into their platforms as they prepare for a new era of value-based care. The problem? Those technologies, workflows, processes and providers are all built with the fee-for-service model in mind, said the digital health panelists at the J.P. Morgan Healthcare Conference.

From left to right: ChenMed CEO Christopher Chen, , Stride Health CEO Noah Lang, Comcast SVP Shawn Leavitt, Landmark Health CEO Adam Boehler

From left to right, ChenMed CEO Christopher Chen, Stride Health CEO Noah Lang, Comcast SVP Shawn Leavitt and Landmark Health CEO Adam Boehler

Monday’s 5 p.m. digital health panel at the J.P. Morgan Healthcare Conference happened to coincide with a presentation given by the popular U.S. Vice President Joe Biden.

Some attendees were torn. For those that did make it, panel moderator Bob Kocher promised some topical debates far more interesting than that “moon-thing” Biden has been up to.

It was all of the fun, without the metal detectors.

A partner at Venrock Ventures, Bob Kocher set the stage with some fundamental observations about how technology can help enhance healthcare for all stakeholders. It promises to improve productivity, increase patient engagement and help payors isolate important areas of waste, he said.

Can it help bring about the change needed in healthcare delivery?

The panel didn’t gloss over the challenges different stakeholders will face transitioning from a fee-for-service model to one that emphasizes value-based care. Hospitals will be particularly hard hit they said, as demand falls and bad debt rises.

Broadly speaking, technology improvements will be critical in this new era said Comcast SVP Shawn Leavitt. He cautioned companies against latching on to the newest shiny thing. As with the other panelists, he believes the necessary innovation is unlikely to come from AI, Big Data, or any other buzz field.

On the flipside, the status quo approach isn’t working.

“Most of what we learn in medical school is how to practice fee-for-service medicine,” said Christopher Chen, CEO of ChenMed. “What we’re looking for are people that can fundamentally change the risk of the patient.”

From the workflows and processes to the actual providers, the existing system is built around the fee-for-service model. It’s optimized for high-throughput patient care and lengthy note taking, Chen explained.

Landmark Health CEO Adam Boehler agreed.

“Everything revolves, if you buy it off-the-shelf, around fee-for-service healthcare.”

To advance his model of patient care, Chen found himself designing his own software. It was outside his area of expertise — cardiology. Yet it became a necessity.

“I ask myself frequently, why are we also running a tech company inside our organization?” he said. “The issue here is that if you go and you look for an off-the-shelf piece of technology, it’s what Adam said before, they’re all designed for fee-for-service.”

He gave the example of a patient who had a recent hospital visit. A majority of the time, the PCP would not be aware that anything ever happened. That’s not good, he said. For successful value-based care model, the PCP needs to be the quarterback, coordinating patient care.

Integrating existing technologies wouldn’t work, so he created his own technology.

“In our environment, not only do they [the PCP] know you were in the hospital, they can see the charges come through, they can see the hospital notes and it’s all integrated, all into one space. Right at the point of care,” Chen explained. “That type of technology, that type of claims and risk-based integration — this isn’t available yet. And that’s actually what doctors need to fundamentally change and improve the risk of their patients.”

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