The Brutal Facts
Jim Collins nailed it when he said a company seeking greatness must confront the Brutal Facts. Here are a few for us to ponder:
1. Per CMS, our national health expenditure in 2021 hit $4.3 trillion, 18.3% of GDP.
-This is a target rich environment fueling the for-profit sector and venture funds to aggressively enter.
2. According to an article published in 2019 by JAMA1 – There is $760 - $935 billion in waste in our health care system. Potential savings have been identified for as much as $286 billion.
- Lucy! We have some ‘splaining to do!
3. According to autoinsurance.org the average wait time in emergency rooms across the US is 145 minutes.
- AND, about 30% of the visits are related to chronic care issues that should be addressed in a lower-cost setting.
4. According to patientengagementhit.com the average wait for a primary care visit is 21 days.
- How many of our symptoms either resolve or escalate themselves before that time?
5. According to West Health-Gallup 71% of those surveyed say that pay too much for the quality of care they receive.
- Clearly patient loyalty is at risk.
6. Atul Gawande reported in his article Overkill2 – In a recent study researchers found 26 tests routinely performed that add no value. In a single year of data reviewed 26% -42% of Medicare patients had at least one of these tests.
- Has anything changed in the 8 years since this article was published?
Given these facts, why do we think our patients and communities will remain loyal to the local health system as more convenient options become more and more available? Why should we believe that anything we do with a positive margin will still be exclusively or even primarily available in our facilities?
Must Read – Health Care Disruption: 2023 Outlook, Special report from the American Hospital Association.
This report highlights the efforts of our largest retailers, payer and technology disruptors are doing to transform healthcare. The report describes how seven of the biggest disruptors--Amazon, CVS Health, UnitedHealth Group, the Walgreens Boots Alliance, and Walmart, and tech companies Apple and Google/Alphabet—have staked their claim in primary care, and used that platform to expand.
The most important nugget in this study is the estimate that there is $260 billion attributed to primary care services. The authors suggest that up to 30% of this will go to nontraditional players by 2030. It that is not scary enough, start thinking about the downstream revenues that are tied to this activity.
The report also features activities at Apple and at Google. These two are focused on consumers by helping them be healthy, educating them on key issues building trust and loyalty.
In addition, Amazon and One Medical have teamed up to provide a reimagined primary care, which offers video chat, appointments, referrals and pharmacy delivery, all for (at the moment, a discounted) $12/month membership fee. This builds on what they have already started with Amazon Pharmacy, RxPass and Amazon Clinic.
What will be left for nonprofit healthcare when the dust settles? Will the things we do with the population seeking us be a sustainable business model? I think not! How about you?
We must not delay.
1. Fix our access problems
2. Exceed the expectations of our patients
3. Improve transparency, efficiencies and cost
4. Simplify everything, everywhere, all at once…
1 Waste in the US Health Care System: Estimated Costs and Potential for Savings, Shrank, William H., Rogstad, Teresa L., American Medical Association, October 15, 2019
2 Overkill, Gawande, Atul, The New Yorker Magazine, May 4, 2015
