Commentary: Finding Value in Health Care

The time for innovation is now.
The United States pays more for and gets less from its health care system than peer nations. Debate over repealing and replacing the Affordable Care Act (ACA) brings back into focus key drivers of comparative American underperformance: misaligned incentives, a dominant fee-for-service payment model and fragmentation of care delivery. Shifts in federal policy will ultimately enable or hinder a variety of solutions, but, meanwhile, the time is riper than ever for innovation and market-based reform.
The shift to value-based health care, in which providers are reimbursed for services based on the quality of care and patient outcomes, creates new opportunities for innovation. How will providers improve quality and efficiency and drive out waste? How will insurers meet consumer demand for simplified and personalized experiences that won’t break the bank? How will health care organizations demonstrate that integration through mergers and affiliations improves bottom lines by driving true value creation and not just pricing power?  
Delivering a new kind of health care experience is driving existing and new players into entrepreneurial partnerships — and competition — unlike what the industry has previously experienced. With this paradigm shift, there is a window of opportunity for strong organizations to affirm their roles as market leaders.
Whatever becomes of the ACA, the overall direction of the health care industry likely will not change. The drive and pressure to reduce costs and deliver value will accelerate among industry stakeholders, resulting in new models of care, new partnerships and new demands for each to delineate clearly the value they contribute. Along with cost pressures, competition from sources such as retail health, concierge medicine and mobile technology are changing the health care market. 
Many large health care systems have the resources needed to generate and implement innovative ideas. Others are developing solutions suitable for commercialization in partnership with expert entrepreneurial companies capable of scaling and selling outside the health care organization’s market. 
Delta Dental, the leading dental benefits company with the largest statewide market share in Washington, is one example. Leveraging methodologies more typically used by startup organizations, Delta Dental helped one of its own clients make employee health benefits more accessible, valuable and relevant. The solution was to create an on-site dental clinic for employees who couldn’t get away from the office to visit their professional dental providers.
Another example is CSATS, a Seattle-based online service for skills improvement via interoperative review. Based on technology developed at the University of Washington by a team of surgeons, engineers and biostatisticians, CSATS’ performance management system utilizes a combination of distributed experts and other reviewers available 24/7 over the internet to assess health care professionals’ technical performance with accuracy equivalent to current gold standards — but at more than 80 percent savings in cost and time to results. CSATS is partnering with Providence St. Joseph Health and other leading health care organizations to bring an innovative approach to an age-old challenge: helping busy surgeons operating independently continuously learn and improve skills from one another.
Health care organizations that invest in partnerships, learn and integrate innovation-spurring approaches, and implement structural changes that support consumer-centered care will position themselves to be the cost and quality leaders. The need for innovation increases dramatically as provider and payer systems reach the limits of their existing infrastructure for improving care and service quality, reducing internal costs and delivering services at the most cost-effective access points for consumers.  
Despite what becomes of the ACA, disruption is here to stay. Organizations that recreate themselves and are willing to partner with others to meet emerging needs will flourish. Market conditions for innovation and change are better now than ever. 
STEVE GORDON, M.D., and HANNAH BERSON are national health care consultants with Seattle-based Point B Inc. Reach them at and

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