Bending The Cost Curve To Prevent Severe Steps In The Future
This is part of our ongoing coverage of the 2024 Oliver Wyman Health Innovation Summit. We previously wrote about ways that artificial intelligence can transform patient care.
Healthcare is at the proverbial fork in the road. The industry can continue down the current path where costs spiral out of control, forcing insurers, governments, and employers to further tighten purse strings. That path also leads to more clinicians experiencing burnout and leaving the workforce, taxing an already strained care system. The other road, which Oliver Wyman started laying out in its Designing for 2035 project, envisions a system where innovative solutions and strategic reforms lead to a more sustainable and equitable healthcare environment.
“We need to begin today if we are going to save over $1 trillion by 2035,” Oliver Wyman’s Ran Strul said during a main stage speech at the Oliver Wyman Health Innovation Summit. While $1 trillion sounds like a heavy lift, the target holds healthcare spending steady as a percentage of gross domestic product over the next 10 years. It gives the industry a fighting chance to pursue more ambitious savings in the future.
Strul hit on three areas critical for reigning in costs: the high intensity and high cost of labor, administrative burden, and the high price of drugs. For each, there are a set of actions stakeholders must start acting on. To address labor, for instance, it’s about rethinking where care is delivered — eyeing low-cost settings when clinically appropriate. Reimagining the structure of care teams to let clinicians practice at the top of their license is also a necessity. On administrative burden, stakeholders can look at ways to use artificial intelligence to streamline functions like prior authorization. And for drug prices, the industry needs to extend transparent pricing and drug price negotiation, among other things.
Bending the cost curve on these dimensions today will help prevent more draconian options from being deployed in the future, Strul said.
On the road to sustainability
UC Davis Health appears to be pointed in the right direction. CEO David Lurbarsky, M.D., described how the health system is not just deploying innovative technologies, but simultaneously redesigning workflows to improve patient care and, as he said, bring joy back to practicing medicine.
“If you layer AI on rotten processes, you end up with rotten results,” he cautioned.
Lurbarsky spotlighted a program where remote monitoring tools speed up stroke care for patients in outlying areas, significantly cutting the time it takes to get patients necessary hospital care. He also described how the health system has cut workflow inefficiencies by 20%-30% using AI and machine learning, including for the use of transcribing and copilots during patient encounters. AI-driven analytics has also increased productivity by 12%, he said.
Driving collaboration across the industry
Putting the industry on a sustainable path also requires every sector heading in the same direction. For Kim Keck, President and CEO of the Blue Cross Blue Shield Association, leveraging data to inform decision-making is a must. It’s also incumbent on organizations to coalesce around ideas that can be scaled across geographies, she said during a Q&A with Oliver Wyman’s Rachel Zeldin.
She noted how the nation’s 33 Blues plans are investing $10 million in Boys and Girls Clubs to implement trauma-informed approaches to address the youth mental health crisis. The effort could reach as many as 3 million lives over the next few years.
“This is a great platform to build upon,” she said, adding that efforts are ongoing to align on and scale other programs that are being deployed by individual Blues plans.
Tomorrow’s special edition of Oliver Wyman Health will cover such topics as using AI to transform brain surgery, programs that improve health equity, and balancing difficult trade-offs in the C-suite.