Can Amazon and Walmart build effective value-based care models?
Advanced analytics and interoperability are central to the success in these new models. That’s where the companies could possibly make their mark.
A recent Wall Street Journal article focused on Amazon’s efforts to disrupt the U.S. healthcare system. The company’s continued efforts in healthcare make sense. After all, Amazon disrupted the retail market to make the experience far better.
Likewise, Walmart has become a behemoth through its version of retail transformation. The experience and user interface are different than Amazon, but the foundational principles are the same: Use data to improve the experience, reduce cost and deliver better products.
In other words, both companies developed a version of a retail “quadruple aim.”
Perhaps they can use similar approaches and resources for healthcare.
Value-based care
Much of the success or failure of such an effort depends on the delivery of value-based care.
"A surgeon who operates unnecessarily with a horrible outcome is paid more than the surgeon who recommends conservative treatment in an office visit with a better outcome."
The failures of the legacy fee-for-service paradigm have been well documented: Providers get paid more the more they do, and there is no (or very little) accountability for outcomes.
A surgeon who operates unnecessarily with a horrible outcome is paid more than the surgeon who recommends conservative treatment in an office visit with a better outcome.
The fact that we need to move away from this is relatively easy to understand. More difficult are the details on how to actually accomplish this.
For all its faults, fee for service is easy to understand. More importantly, it is easy to execute and structure.
You see a doctor or get a procedure, and the doctor, clinic and/or hospital gets paid for providing the service.
On the surface, value-based care is similarly simple to understand: Deliver better care to more people and get paid more. However, defining "better" or "good" care can be difficult.
Additionally, much of this "better" care often takes an approach that doesn't necessarily target the greatest opportunities because they are hidden by layers of processes.
The overriding concept is that we want to deliver care before it becomes more serious and expensive.
Some actions are logical, such as addressing care gaps to identify issues long before they become serious problems. Examples of such gaps are vaccinations to prevent serious infection, colonoscopies to prevent colon cancer and hemoglobin A1C testing to identify rising risk diabetic patients.
Although these care gaps are important, there are other, quite substantial opportunities that tend to get ignored.
Case study
For instance, I recently cared for a patient with serious COPD in the emergency department. Her medical record indicated that she had regularly been in the emergency department about twice a month with a similarly regular cadence of monthly hospitalizations.
I gave the usual course of breathing treatments and steroids. She improved but was still a bit short of breath. It was a bit tenuous, but I thought she might be OK going home. If that was the course of action, she would need good follow up. A seamless handoff of information to her primary physician, pulmonologist and treatment team would be critical.
As I prepared to make my decision on her disposition, I contemplated the choices.
I could make a bunch of phone calls to coordinate her care. This would take a substantial investment of time.
I could contact our case manager. This would also take time. Additionally, there would likely be some sort of manual handoff the next day.
In other words, the system was set up to insert friction and require substantial manual effort. I and my clinical colleagues have to exert multiple manual touch points to accommodate a potentially better (and certainly less expensive) option.
Even if I were able to accomplish this on my end, I had significant doubts about whether the patient would have an easy time following up.
Based on previous experience, it was highly likely the patient would also encounter friction points. There just wasn't a systematic workflow that engendered confidence.
It would be more cost-effective to send the patient home and, in an ideal system, such an option had a high likelihood of at least an equal outcome compared with hospitalization. However, we don't have an ideal system. That option involved exerting a lot of effort and risked a poor outcome because some step might get missed.
In the end, my decision to admit the patient was both safer and easier.
A simpler system is needed
In a parallel event, I sat in some meetings where we discussed population health and administrative simplification. The focus was on legacy issues, such as preauthorization and care gap closures.
I raised the COPD patient as an opportunity to create a simpler system that would allow a future emergency physician to seamlessly send such a patient for outpatient follow up. I pointed out that there are many such patients who likely don't need full inpatient treatment, but they end up being admitted because of the sort of friction I described.
Additionally, there are financial and medicolegal disincentives to send the patient home. The gap that exists is that we need to build the workflow and information pathways to make such decisions less fraught with effort and risk.
There are other, similar opportunities that are all too common in our healthcare systems.
"Our systems offer a target-rich environment to address the quadruple aim of reduced cost, improved quality and improved patient and clinician experience."
Our systems offer a target-rich environment to address the quadruple aim of reduced cost, improved quality and improved patient and clinician experience.
Unfortunately, such efforts also have a common thread of being more complex to implement than checking the "value-based care box" by creating a care gap "to-do" list.
In the case of the COPD patient, we would need to have data infrastructures that would identify such patients, follow up workflows that would facilitate the processes needed to care for such patients and staff dedicated to making sure the process works smoothly.
The complexity isn't overwhelming. But still, it is very different from our relatively simple CPT, encounter and volume-based legacy. In other words, it would require work and resources and, most importantly, a radical change in mental framework.
Amazon and Walmart
It is clear that advanced analytics and interoperability are central to the success in these new value-based models. That is where Amazon and Walmart can really make their mark – at least theoretically.
It won't be a simple exercise of spreading magic pixie dust on our broken healthcare system. Amazon and Walmart will need to leverage their considerable data resources to identify the right opportunities and smooth the workflow.
But if the companies do it well, they will succeed, and our economy, country and, most importantly, our patients will be far better off.
Alternatively, if they focus their efforts in a care gap closure whack-a-mole exercise and market for increased volume in their clinics, Amazon and Walmart will have squandered its collective opportunities to truly transform care.
John Lee, MD, has served as chief medical information officer at Allegheny Health Network and served in other IT roles at healthcare organizations.