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Transform Care November 06, 2017

AHIP and Highmark Health CEOs Talk Healthcare Disruption and Innovation

Key Takeaway
(On the #ACA) "It's not about how many people we cover, it's about changing the model." @AHIPCoverage

The 5th annual Oliver Wyman Health Innovation Summit – Industry Interrupted: Delivering on the Promise of Change – is underway this week in Dallas, where over 350 healthcare leaders from 33 states, 12 industry sectors, and 6 countries have come together to debate and deliberate upon the theme of disruption in healthcare. (The next Oliver Wyman Health Innovation Summit will be November 5-7, 2018 in Dallas, Texas.)

Here are a few highlights from the evening’s Keynote Address – What’s Next for Health Plans? – featuring Marilyn Tavenner, President and CEO of America’s Health Insurance Plans (AHIP), and David L. Holmberg, President and CEO of Highmark Health and Chairman of the Board at Highmark Inc.

In a conversation led by former NPR reporter, Lauren Silverman, a Health, Science, and Tech Reporter at KERA News, Marilyn and David discussed five key topics: market consolidation’s future, the importance of consumer centricity, the evolving role of technological innovation, predictions on new health plan business models, and the healthcare regulatory environment. Here’s more on what they had to say.

David and Marilyn first analyzed whether or not there will be consolidation among healthcare providers, and explained how the healthcare ecosystem has evolved over time.

According to David, the healthcare industry is advancing, but perhaps not quickly enough. “The cost of participating in healthcare is rising rapidly and the fundamental economics are broken in healthcare today,” David said. “To solve problems for people a decade from now will require a very heavy lift from an information and technology standpoint and will require different thinking,” he explained.

“Until we actually deal with underlying cost, we will never make the consumer happy.” 

“We’re going to go through a period of the next five years that’s going to be fairly complicated. I’m not sure everybody is quite onboard yet,” he stated. “The consumer is raising the bar and expecting more from healthcare providers in general. I don’t know if the industry is moving rapidly enough.”

Added Marilyn, “Until we actually deal with underlying cost, we will never make the consumer happy.” She added, “All we’re doing in the individual market is rearranging the chairs on the Titanic.”

“You’ve got to transform core healthcare delivery system,” explained David. “It’s not about cost, it’s about affordability. We have to find a way to make healthcare affordable if we want to be sustainable.”

Lauren later pointed to a thought-provoking statistic: “Today, about 1 in 9 people work in healthcare. The majority of these jobs are not consumer-facing,” she said. “Ten years from now will artificial intelligence eliminate a majority of these office jobs?” she asked the speakers.

“Healthcare is a service business,” answered David. “As we think about what’s ahead, some are having real success taking care of people in their homes,” he added, stressing that simple jobs will all be replaced with artificial intelligence in days to come.

“Who gets to decide which patient gets the $400,000 drug?”

The conversation then turned to consumer-centricity.

Marilyn, who implied the market will eventually become more consumer-facing, said, “Everyone thinks the Affordable Care Act is about the exchange, it’s far beyond that.” What is at risk, she added, is Medicaid expansion. “If we want to cover more people, we’ve got to be able to afford it as a country,” she said.

Added David, “It’s not about how many people you cover and about how many people you tax. It’s about changing the model and addressing the real issue about how you reimburse for things and hold people accountable for outcomes.”

The conversation then turned to the pharmaceutical industry and the controversy behind six-figure drugs.

“When you’re talking about taking a new drug to market and it’s $400,000,” said Marilyn, “something’s gotta give.” And price increases have to be justified, she added. “[Patients] are making decisions to not take the drug, which also costs lives,” she stated.

“Who gets to decide which patient gets the $400,000 drug?” added David. “If we don’t solve it, somebody will.”

As David said, summing up what is essentially the ultimate reason for this year’s Health Innovation Summit, “There are a lot of different paths."

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