Addressing Healthcare’s Big Inertia Problem

Submitted by on Friday, June 20, 2014 - 12:51

Inertia is the resistance of any object to any change in its state of motion, including changes to its speed and direction. It is the tendency of objects to keep moving in a straight line at constant velocity – It describes the state of mind of those that we've often referred to as the agents of the status quo, and it also explains why the larger institutions that rule over the industry will miserably fail in the next few years unless they beat their inertia. Take for example the presentation from Karim Habibi of NYU Langone at this week's Bundled Payment Summit about his organization's notable efforts in the Medicare BP program. Mr. Habibi pointedly remarks the concern about long term sustainability of his organization's participation because (a) of the loss of revenue from IP rehab post discharge due to a shift to more efficient post-acute care settings, and (b) the loss of revenue from readmissions due to better management of patients. The organization's speed and direction is still driven by the volume of stays, not by the margin generated by a "product" (e.g. total joint replacements). As a result, a decrease of any stay is seen as counter to the organization's interests, even when it actually might not be, and certainly not counter to the patient's interests. Take also for example a recent email we received from a health plan member living in Florida who was blown away by the cost of basic lab tests totaling $500 that he was now responsible for paying. At no point was there any attempt by his health plan to guide him to lower cost alternatives, even when labs like Theranos offer alternatives at a fraction of the costs he was billed. Health plans have become accustomed to simply passing on the costs to others. The third party payer isn't the health plan, it's the employer and the employee. The final example also came out of the Bundled Payment Summit and reflected the frustration of many of the current Medicare BP participants with the use of the DRG as the trigger for bundles. They remarked astutely that DRGs are assigned AFTER discharge and yet those accepting risk for bundles should be managing the patients from the point of admission. Medicare's slavish adherence to DRGs is now running completely counter to its goals with the Bundled Payment pilot.

What this means to you – It's pretty clear that the tensions between those who want to increase affordability and quality and those who are governed by inertia are reaching a break point. The old models are actually dead, but like the zombies in Walking Dead, they simply don't know that they're flesh-eating parasites. They continue to be driven by a single force and move in a straight line at constant velocity while the rest of the industry is shifting away. Unfortunately they are also continuing to create casualties – real casualties. The plan member having to pay $500 in lab tests when he could have been led to an alternative at one tenth the cost. The patients who are harmed and incur unnecessary stays because the zombie needs another pound of flesh. The families whose premiums will rise by 8% or more in 2015 because health plans find it easier to feed the zombies than to kill them. The BP Summit showed us that inertia is still a powerful force, but also that the opposition is very close to being just as strong. The coming clash will be something to behold.