BY Aloha McBride, Global Health Leader, & Heather E. Meade, Principal, Washington Council, Ernst & Young
As the challenges of health care affordability, staffing and access continue across the US, the rise of technology presents a significant opportunity to unlock more responsive care that better addresses patients’ health and social needs while alleviating provider burden and reducing costs.
The question is, will US policymakers take action to capture this potential?
Our work has shown that the state of digital health in both the US and abroad calls for a more effective health care ecosystem to support the potential of a digitally connected future.
From life expectancy to post-operative complications, maternal mortality, chronic disease management and more, US patients fare worse than their peers in comparable countries. For patients from underserved racial and ethnic groups, these disparities are often more pronounced.
We envision a digital future for the health care system that includes smart hospitals and ecosystems centered around care delivered at the most cost-effective, convenient location, built on a foundation of widely available data, real-time insights and frictionless consumer-focused experiences.
Foundational to this ecosystem is home-based care, enabled by wearables, remote patient monitoring, care navigators and connected care teams that empower patients across geographic locations and demographic backgrounds to remain healthy and in their communities for as long as possible. This white paper explores each of our five challenges and the policies needed to attain the digital health future.
Barrier 1: Payment Infrastructure
Despite developing and testing novel payment and care delivery models for over a decade, the US health care system continues to revolve around fee-for-service payments and other misaligned incentives that do not necessarily reward improved patient outcomes or clinician time spent addressing the social drivers of health (e.g., transportation, education, housing and nutrition). Provider performance metrics today are exceedingly complex and over indexed on process as opposed to outcomes measures.
Misaligned payment policies and incentives also prevent widescale investment in and adoption of digital innovation — such as telehealth and hospital-at-home — which can be a key enabler in the move toward a value-based population health approach. Smaller providers with fewer resources are at risk of being left behind without policy changes that enable them to make significant up-front investments.
The digital future
Value-based payment models replace fee-for-service as the dominant payment model in the health care system, shifting toward a population health approach and away from volume-based “sick care.” This enables payers and providers to have a clear and reliable understanding of expected reimbursements and costs and to receive proper incentives that support diverse, high-quality care offerings, including digital and home care, as appropriate for their patients. Price and quality transparency have increased in the US, so purchasers and patients have more information, and providers are incentivized to compete and improve care quality, potentially by leveraging digital solutions.
Barrier 2: Regulatory and statutory barriers to innovation
The health care system faces key regulatory barriers around adopting next-generation innovations such as telehealth, interoperable systems, remote patient monitoring, and tools and technologies enabled by artificial intelligence (AI) and machine learning (ML). During the COVID-19 public health emergency, Congress temporarily waived certain Medicare requirements, allowing beneficiaries to receive telehealth and eligible patients to receive hospital-level care at home through the Acute Hospital Care at Home program. However, the reimbursement landscape for those remote services is uncertain beyond 2024, hindering provider investment in them.
Today’s approval pathways and payment mechanisms also pose significant barriers to provider and payer adoption of AI/ML tools that could help address many of today’s workforce challenges and streamline back-office functions. In fact, research has indicated that these barriers can hinder innovation itself as digital health startups can struggle to gain the needed investment without a clear outlook for their product. Without a pathway to payment driven by continued reimbursement, potential innovation around digital health will be repressed.
The digital future
Regulators and private-sector companies work together to create pathways that promote
the adoption of thoroughly vetted and tested innovative tools that drive better outcomes improve the patient experience and ease the provider burden. Data collection improvements and standardization, as well as interoperable systems that deliver a comprehensive view of the patient and are enabled by AI/ML tools and other technologies that promote care efficacy, safety, consumer privacy and other protections, are critical to success. Innovation is incentivized with the appropriate guardrails, delivering new technologies, treatments, diagnostics and care delivery mechanisms that drive enhanced, more equitable outcomes and better experiences for patients and providers alike. Health systems and providers using these new technologies have the tools and training to balance the risks of bias while striving for efficiency.