JEREMY: What I have found on the use of data in health care is it can be really hard for patients or anyone outside of the industry to really wrap their head around what's happening. On one hand, anyone that's gone to a doctor in the U.S., or any clinician in the last 10 years, knows that there's an enormous amount of data being collected. Whether it's the intake forms we have to fill out now—which are a lot more than they used to be—or whether it's the fact that during the actual clinical setting, a lot of times my clinician is looking at their computer screen and entering things there, as opposed to actually facing me, in some situations. So, I know that the data is being collected, but I haven't really noticed a change in my experience. With all that in mind, can you give us a better idea of how data is actually being used, possibly in ways that we don't even see as patients?
DAVID: I think what you mentioned there is kind of why are we talking about data in health care. For starters, you kind of gave a patient experience. The patient experience in health care in the commercial market leaves a lot to be desired right now. As well as, particularly in the past 10 years, we've seen health care costs—premiums, in particular—grow in the commercial market by around 5% annually. In the next decade, we're going to expect similar 5 to 6% growth in the commercial market, every year for the next decade. So, the patient experience leaves a lot to be desired, and of course, health care is very expensive right now.
Data is being used to evaluate, find targeted areas, find different ways consumers interact to improve that patient experience and bend the cost curve, as they say. So, the only limitation right now in terms of how data's being used in health care is just our imagination for all the different applications that data can help improve those experiences and bend costs.
J: I think as part of that, we've heard the term "value-based care" be kind of a popular, and in some ways as a catch-all, over the last ten to 20 years. Can you give us more of an idea of what that actually means, both for clinicians and for patients, and how data is kind of informing that?
D: Value-based care, that term gets thrown around quite a bit. I'm going to give you my simple definition. Value-based care is about paying for quality, paying for outcomes of services. This is as opposed to traditionally how the employer market or commercial market has historically reimbursed based on the volume of services, otherwise known as "fee-for-service." Every time you go to the doctor, or go to the emergency room, you get billed for that.
To better understand value-based care and how data is being applied to value-based care, let's take a couple of examples and apply those solutions. Let’s take knee surgeries, for example. We know that folks, when they get knee surgery, there's a whole series of services that have to be performed. We also know that readmissions or infections after the surgery can be quite costly and can have a huge impact on the patient's quality of life. So, value-based care is being applied here to help measure physicians who perform better surgeries, reducing those readmissions for those patients—leading to the best possible outcomes. That's one example of value-based care, kind of a point solution for a single service.
Another example of where value-based care is very popular is for chronic care conditions. So, let’s take diabetes as an example. If someone has diabetes, on average, they're going to cost around 20 to 25% more than a patient who is perfectly healthy and does not have diabetes. [Diabetes] involves a ton of management, it involves making sure they're taking the right drugs and all these other metrics to keep them, for example, out of the emergency room, healthy, and living a great life.
That all requires data. It requires data to figure out which drugs are the best to be able to use with the patient. Are there early interventions you can make before a patient becomes diabetic? As well as how do we engage someone, what are they most likely to engage in, if the insurance company or provider reaches out to them? Email, text, phone call—you name it. Those are just some examples of how data is helping us transition out of paying for quantity in the commercial sector to paying for quality.
J: How frequently are you seeing that this transition has happened—that providers are actually now getting paid for outcomes as opposed to procedures? Is that something that is basically industry standard now, or is it still kind of a progression that we're in the middle of?
D: It's still very much so a progression. And you know, it's funny, because some of these initiatives have been around for a while now in the commercial market. But, you know, as employers are looking at their costs and as employees, of course, are paying more out of pocket, it is beginning to trigger the discussion.
What we're seeing as well right now is that a lot of insurance companies are offering health plans that are based around value. And to do that, to evaluate the doctors, to see which opportunities, what copayment would someone rather pay to go to a high-quality doctor as opposed to another doctor. That's all being accounted for, and brought to you by data, essentially, finding those opportunities.
J: I think that it would probably surprise a lot of people to know what data looked like in the health care sphere, even in the '90s and early 2000s, as opposed to what data looks like now. So, in other words, if you're thinking about what works, what's the method of communication to make sure they come back—it feels like we should know those, right? Can you give an idea, though, of what data looked like before 2010, 2005?
D: I have an idea, of course, because it was a little before my own time, but you know, traditionally speaking, data's been around health care for a while. How do we calculate insurance premiums? Well, we look at the demographics and the geographic factors of where folks live. We look at actuarial tables to see how much could someone cost and we put that all together, that historical data, and that's the premium, right?
From the provider perspective, how do they get paid? They coded for the number of services they provided. The data itself has been around for a while, but to your point, a lot of providers and insurance companies were never really asked to use this data in this fashion. And so retooling that data, setting up analytics, dashboards—you name it—we're in a moment of transition.
From when I first started way back when in the mid-2010s, it's definitely a huge leap forward to be able to apply this data. Because at the end of the day, we can talk about advanced predictive analytics and AI and all these other things. If you can't organize that data in an easy way to be able to understand, you're not going to be able to provide those insights, look for those opportunities for savings, as well, improve a patient's quality of life.
J: Again, health care is a unique industry. I think anyone that has even dipped their toe into health care knows that. It feels very much like the data's there, you know, we have all sorts of clever ways to analyze the data and get better insights. It feels like a lot of the barriers are just getting the right data into the hands of the right people and then developing trust. Especially when it comes to your health, when it comes to your family's health, that's not something you feel good about innovating. Is that generally the feel in the industry?
D: Well, I mean it really depends. And I think to this point, you know, folks who work in the industry also have to experience the industry. Consumerism right now in health care is the idea that the system is not really set up to be patient-oriented. If you take some of those barriers and some of that friction away, a patient who has diabetes is more likely to adhere to their treatment plan with their doctor and seek care when they need it, as opposed to going to the emergency room down the road. That is a big shift for the industry.
It's of course not going to happen overnight, but certainly, there are a lot of opportunities there. In some cases, you know, the patient may not even realize it's going on, it's happening in the background. They may go into their provider's office, they're having a conversation about better managing, let's say their high blood pressure and cholesterol that could go into diabetes. Their provider may have all their information on their electronic health record, including their health plan, right in front of them, so they can prescribe, "Hey, you know, your insurance company's going to cover this," or maybe, "I need to do a prior authorization. I can just do that with the click of the button to make it way easier for the consumer once they go to the pharmacy to get that drug." As opposed to finding out at the pharmacy the drug is going to cost a lot of money or the insurance company doesn't cover it.
J: What are other broad trends that you've been observing over the last 10 years? Anything else kind of jumping out that you're seeing is a trend that the model of health care is shifting, especially the data-informed side of it?
D: Yeah, I think the past few years, in particular, there are a few data-specific trends we could talk about. One, you know, when you go to your doctor's office, we're starting to see less of clipboards and paper, right? And that makes a big difference. I don't have the best handwriting and so doctors trying to read my handwriting could be a bit of a challenge to providing me care. And if a doctor's looking at that clipboard, they're kind of missing any analytics, or the opportunity to prescribe a different drug that could be seen on an electronic health record system.
In addition to trying to make that patient experience as seamless as possible, we're seeing a big discussion around price transparency and how data can help with that. About 15 years ago, we saw high-deductible health plans rise in popularity among employers. And again, it's asking consumers to have a little more skin in the game with the conjunction of health-saving accounts. In certain cases, the consumer was able to have an impact on certain costs. The theory being if patients have to pay more out of pocket, they're going to eat healthier, they're going to exercise, they're going to choose the least costly services. However, in a lot of cases, prices in health care are still kind of a mystery to the consumer. Sometimes it's not the first thing everyone thinks of when they need to get an x-ray, for example.
To help bring health care to the next stage, there has been an industry trend to improve price transparency for services. Certainly, I think there remains a challenge that data can play a big role in helping the consumer make a more informed choice. Again, it's hard to do that if you just don't have the information in front of you, right?