What is the Future of Health Care?

what is the future of healthcare

Last week, I attended the inaugural Texas Healthcare and Bioscience Summit in Austin, Texas. This exciting event brought together health care leaders, innovators and government officials from around the great state of Texas to discuss some of the tough issues we’re facing in the industry today.

I was honored to be asked to serve as the keynote speaker at the Luminary Dinner the last night of the event. More specifically, I was asked by summit organizers to answer: “What is the future of health care?”  Obviously, this was no quick speech.  But if I had to summarize it in one sentence it would be: “The best way to predict the future is to create it.” That’s what we are doing at Baylor Scott & White Health.

I wanted to share my remarks below with the hope it sparks all of us to think about how we can each work to change health care in this country for the better. Creating the best future will take all of us.

Keynote Address: Luminary Dinner, Texas Healthcare and Bioscience Summit, June 4, 2014

I have been asked this evening to answer the question: What is the future of health care?


Well, we at Baylor Scott & White Health believe in an Abraham Lincoln quote that Peter Drucker made famous … “The best way to predict the future is to create it.”  And that’s why we created what you heard in the video is the largest not-for-profit health system in Texas today and one of the largest in the country… A new model built to meet the challenges of today and tomorrow head on… a new system designed to prosper from the opportunities presented during this time of great uncertainty.

Futurists predict that in the next decade, hospital consolidation will likely result in only 100 – 150 large, regional systems throughout the country. Baylor Scott & White will be one of those systems. 

Now, I understand that the majority of Americans are rightly concerned about the future of health care.  In fact, I read in an article in Forbes late last year that 57 percent of Americans believe that health care will get more expensive in the years to come… and nearly 40 percent also believe the quality of care patients receive will actually worsen.

If you remember nothing else tonight, remember this… in the years to come, health care can become more affordable and quality can and will improve, if we make certain changes.  Quality care is cost-effective care.

So how can we at Baylor Scott & White be so confident we can achieve that goal?  Understanding that begins with understanding what we are already doing successfully to transform the current health care model in our region and in our state.

The secret to delivering more affordable, better quality care boils down to focusing on three things:

  1. Eliminating unnecessary services
  2. Improving coordination of care
  3. Better management of chronic diseases

What do we mean by “eliminating unnecessary services?”  

Ever had a sprained knee? You go to doctor number one. He takes an MRI… he prescribes rest and aspirin… and in a few weeks, you decide you’d like a second opinion. You visit doctor number two… and what’s the first thing he does? A second MRI… one you do not need.

In a recent study of Medicare patients, one-third to one-half received duplicative testing. And according to a former administrator of the Centers for Medicare and Medicaid Services, it’s estimated between 20 and 30 percent of all health care spending in America is waste.

What do we mean by improving coordination of care?

A few years ago, I visited my brother who lives in another state… and at the time he was having some significant health issues. He had bottle after bottle of pills at his bedside. I asked him who was overseeing his multiple prescriptions making sure there were no dangerous interactions… the answer was “no one.” He had been sent to specialist after specialist, and each one was prescribing his or her own plan of treatment and there was no communication between the doctors.

This is typical as the current system is not built for coordination. 

And what do we mean when we say we need better management of chronic diseases?

It may be hard to believe, but we know that five percent of the population accounts for 50 percent of the health care costs.  We know the unhealthiest individuals… the sickest … usually end up with multiple chronic conditions…. diabetes, heart failure, asthma, hypertension, cancer and other disease states… and managing these multiple conditions is extremely complex and costly.

This top tier of health-care utilizers creates one of our biggest challenges, but it also creates one of the greatest opportunities.

So back to what we think is the real future of health care…the solution we’re building at Baylor Scott & White Health… that will transform how health care is delivered.

You may have heard of the term “population health management.”  It is the cornerstone of our strategy and what we believe is the future.  It is a world where we as providers are paid to not just prescribe treatments and perform procedures which end up uncoordinated and often wasteful… it’s a world where we are finally incentivized to treat the whole patient efficiently… where we’re incentivized to keep people healthy and out of our hospitals.  And our providers are paid for value and quality, not volume or number of procedures performed.

We quietly built our first population health strategy about 18 months ago… and our very first members were our own employees and their dependents – those signed up for our self-insured health plan.

The primary goal – to drive down the health care costs this population incurs each year by number one – keeping them healthy… and then if and when they do get sick – providing them high-quality, efficient, effective, coordinated care. And here’s the real difference when it comes to the model… If it’s estimated the population’s health care will cost roughly $10,000 per person and in actuality at the end of the year it cost just $9,000 … the providers, we as the employer and the employees themselves all share in the savings.

As illogical as it sounds, we as providers have never been financially incentivized to keep people healthy… we’ve only been paid for the volume of sick care we provide.  But then again, there’s a lot about health care in America today that’s illogical.

Let me go off course for a minute and give you one of my favorite examples…. ever hear of “ICD-10?”  It’s the federal government’s newest medical coding system and it includes around 68,000 separate billing codes – five-times more than the previous system.

There’s an ICD-10 code for being struck by an orca whale… for being injured in the forced landing of a spacecraft… there’s a code for being burned by flaming water skis… a code for being sucked into a jet engine.. and three separate codes for squirrel bites.

Now one of the good things that’s come out of the new ICD-10 system… there’s finally a code for exhibiting “Type-A” behavior.  We Type-A folks are at last getting the recognition we deserve.

Now, back to the Baylor Scott & White solution… population health…

As I said, we first work to keep people healthy.  Do you know that an employee with a body mass that’s 35 or higher costs their employer more than double an employee with a body mass that’s 25 or lower?  The annual medical costs of obesity-related diseases are more than those associated with drinking and smoking-related diseases combined. You know I heard a doctor tell a patient once that the problem was not obesity running in his family, it was that no one in his family runs.

Okay, how do we work to truly improve people’s health? We know there are four basic things we can do to that are effective, yet less than three-percent of Americans do them – eat right, exercise 30-minutes a day, don’t smoke and manage our stress. So key to our population health strategy, is strongly encouraging these behaviors.

Our employees and all the members of our population health model are offered free smoking cessation programs, free stress-management classes… and if they participate in a run or walk, log their physical activities, and achieve or maintain an ideal weight – they can earn hundreds of dollars paid out as bonuses in their paychecks.

So again, a focus on wellness and personal accountability for health is the first step.

Second, we’re setting up a system designed for coordination of care. 

We now request each of the employees and dependents in our health plan to identify what is known as a “medical home” – a primary care physician or a clinic.  This medical home is then held accountable for coordinating a patient’s care appropriately; ensuring their clinical information is made readily available to all their providers and making sure they get adequate preventative care.  Remember the example I gave of my brother being prescribed multiple, uncoordinated treatment plans?  What he needed was a medical home, i.e, a quarterback.

The other benefit of this model is that it helps cut down on waste.  There’s no longer a need for the duplicative MRI because doctor number two can simply access the MRI taken by doctor number one through his digital connection to your medical home.

And the third major focus for our new population health model – better management of chronic diseases – concentrating on that five percent of patients incurring 50 percent of the costs.  This is where big data and predictive analytics come into play.

Right now, we actually have powerful software systems helping us classify patients based on health status.  Each identified group of patients is then managed by need… so the top one percent receives, for example, home visits by nurse practitioners and regular follow-up phone calls.

We realize that especially for this population, we need to do anything and everything we can to help them stay healthy… that may mean that when a follow-up call reveals a patient doesn’t have a ride to their next appointment, we arrange the transportation.

Sometimes population health can look more like social work than medicine. Issues that often stand between patients and wellness that have not traditionally been on our radar are now there.

These new population health strategies designed to focus on wellness, improve coordination of care, eliminate unnecessary services and better manage chronic disease are being implemented by an organization within our organization known as the Baylor Scott & White Quality Alliance.

More than 3,600 physicians make up The Quality Alliance… they are located throughout North and Central Texas… and these doctors all “play for the same team,” so to speak… which in many ways is a very new concept as physicians are traditionally independent.

The doctors in the Alliance have all signed contracts committing themselves to sharing their outcomes and developing standards of care, measuring themselves against their peers and spreading best practices.

For example, there are physician councils set up to constantly consider new guidelines and initiatives… and these councils have in fact already created more than 80 evidence-based care protocols that have been proven to lead to quality outcomes.

To put into context how impactful just one evidence-based care protocol can be…  When we standardized the order set for the treatment of congestive heart failure, we realized we could save $2,000 per patient while nearly doubling the survival rate. If just this one best practice was carried out around the country, we would save 15,000 lives and two billion dollars every year.

As I mentioned earlier, we have now been executing these population health management strategies through the Baylor Scott & White Quality Alliance for 18 months… and what’s the result? 

In the first 23 months, hospital admissions among our 34,000 population-health-model members are down 4.3 percent.  Thirty-day hospital readmissions are down 18 percent. And the total cost of providing health care to the group – down an impressive 13.9 million dollars. That’s a seven percent overall savings.

As the leader of a health system, those kinds of results are exciting because they mean we’re providing the right care, in the right way, at the right time, in the right place… and as the CEO of a large private employer, those kinds of results likely mean we will be able to continue to afford our employees’ private health insurance in the years to come.

Like I said at the start… and you have now heard the proof… we know we can deliver better quality, more cost-efficient care… we know Baylor Scott & White is on the right path to creating the very best future state of health care for our patients and our communities…but there are still obstacles standing between us and the finish line… as I mentioned, the system is counter-intuitively not yet set up for our kind of model to succeed.    

First, we need to change the funding model to reimburse for true health care instead of just sick care. Right now, we’re in an environment where we lose money by devising innovative, life-saving, cost-saving strategies designed to keep people out of our hospitals. There may be an ICD-10 code for being injured in the forced landing of a spacecraft… but there is no code for keeping a borderline diabetic from developing diabetes. That needs to change.

Second, Texas has more uninsured than any other state in America. Roughly one-in-four do not have health coverage. We need to find a Texas solution to this issue because it’s costing all of us. Texas needs to develop a model to take advantage of federal dollars… we estimate we could get as many as 1.5 million Texans insured. This could be done through private insurance… or some type of public insurance plan.

Right now, the uninsured in this state are overloading emergency departments, using them for their primary care needs because they do not have access to a primary care physician… now keep in mind the ED is the most costly entry point into the system… and the high costs of these uninsured are being shifted to employers, those with private insurance and to taxpayers. That needs to change.

Another real issue we face today is access to care… people are finding they cannot get a primary care doctor.

Do you know it’s estimated there will be a shortage of 130,000 physicians in this country by 2025? And we in Texas right now have below the national average of medical specialists in 36 of the top 40 specialties. We need to do more to address the shortages in our state’s clinical workforce… and it starts with residency programs.

We at Baylor Scott & White Health have a robust medical education program built upon a strong relationship with the Texas A&M School of Medicine… it’s one of the cornerstones of our mission statement. But it is significantly underfunded in the current system… in fact, more than half of our residents are what is called “over the cap”…. meaning they are not fully funded.

It’s been nearly 20 years since Congress has changed its allocation of funds for residencies.  Let me put into context what it means when a Texas medical student ends up taking a residency slot in another state and ultimately sets up a practice there…not only is that one less physician for the patients of Texas, it is $160,000 lost, which was the investment by the state into that student. That cannot continue.

And we need to have more individual accountability for one’s health. Think of the driver who speeds at 90 miles an hour on the freeway without a seat belt.  Does he, with his history of tickets, pay the same for auto insurance as the safe driver?

No. But that’s how the health insurance system is set up. There is often no financial incentive for “good behavior.” This is one of the disappointments of the Affordable Care Act… that more incentives weren’t built in.

Back in 2012, we at Baylor decided to be the first major Dallas employer, and one of the first major Texas employers, to no longer hire nicotine users.  It was important to us to serve as a model… And I just heard that M.D. Anderson has decided to follow our lead… they’re no longer going to hire nicotine users!  We need more initiatives like these.

We talked about what we at Baylor Scott & White are doing to become the future model of health care… a high-functioning, data driven, digitally connected system featuring physician-led TEAMS delivering evidence-based, patient-centered health care…. We will be able to treat higher volumes of patients at lower predictable costs all while demonstrating consistent, measurable high quality.

We also talked about what we can all work to change to create the right environment for a future of better, more efficient health care…. A new reimbursement model; a Texas solution to the uninsured; strategies to address physician shortages and increased personal accountability for health.

But what does this all really mean for you the patient?  Is it going to be any easier to navigate the system, get and stay healthy?

Yes.  Yes.  And yes.  You and your medical home will act as close partners.  You will be very familiar with your numbers, your health status and what you can do to keep it up or improve it.  Your Baylor Scott & White Quality Alliance physician will regularly collect important information such as your weight and blood pressure through your mobile device… and he or she will consult with you via e-visits and tele-health.

In fact, just a few days ago, at the annual Apple Developers Conference, Baylor Scott & White was one of 20 partners in the world named when the technology giant unveiled its highly anticipated health data monitoring app.  Soon, that app will be on your phone… and we’ll be connected.

You will soon be able to stop at a nearby partner retail pharmacy staffed with our mid-levels and get preventative and chronic care whenever it’s most convenient for you.  You will get care that’s proven to be most effective and efficient. You will not get too little or too much care. And you will get testing only when it’s really necessary.  Your health records will be easily accessible to you and every provider you visit… no more long paper forms in the waiting room.

If you develop a disease such as cancer, you will likely get a treatment personalized to you based on a blood sample.  That’s just one of the several areas of exciting research we’re right now focused on.  We have nearly 1,500 active clinical trials being conducted across the Baylor Scott & White Health system… everything from vaccines for HIV and MS… to a new blood test to detect colon cancer before it ever develops.

Within Baylor Scott & White we’ve been awarded more than 8.2 million dollars in grants from the Cancer Prevention Research Institute of Texas… and with them, we’re developing new therapies that may one day save you or your child’s life.

If you ever do have to battle a disease and you’re in our care… you won’t have to visit multiple physician specialists alone…. You’ll be escorted through the process by one of our nurse navigators.

When you go home from our hospital, you won’t be guessing about medications and follow-up care instructions, someone will call and check in on you regularly.

And finally, when you get your bill… it will be easy to read and make sense out of… no more surprises.

It’s a time of major change in one of the most complicated industries.  Health care in the next 10 years will be different in nearly every possible way.

It’s an exciting time… and we want you to ride the crest of the wave with us because together, we really can create a healthier future. The opportunity is there for us to take and embrace. It is the right thing to do for the right reason. And the true beneficiaries will be the individuals, the communities we serve… and ultimately the great state of Texas.

God Bless you and God Bless Texas. Thank you.

About the author

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Joel Allison is a special advisor to the chairman of the Baylor Scott & White Holdings Board of Trustees. He was previously president and CEO of Baylor Scott & White Health. He's been a leader in the health care industry for more than four decades, and he's been on Modern Healthcare magazine’s annual “100 Most Influential People in Healthcare” list since 2004. He's a huge Baylor Bears fan, a fisherman and a proud grandfather of six.

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What is the Future of Health Care?