Thought Leaders in Healthcare IT: HealthRight CEO John Palumbo (Part 5)

Sramana Mitra: How do you see all this playing out? Let’s just start with US. It seems to get more and more complicated. The charges are going up all the time. What trends do you see?

John Palumbo: I think telehealth is a tactical enabler to a much bigger play. Where we see ourselves going in terms of our mission is fulfilling the promise of population health management. In population health management, you have to look at five cohorts of people. You have well people, folks who are at risk, folks who have acute or episodic need, folks who are chronically ill, and then you have catastrophic folks.

One thing for certain is that every one of us will be in all five of those categories. We just don’t know when. The real issue in terms of lowering cost is to create cultures of health and wellness, whether that be at the individual level, family level, or entire corporations. We’ve done research for over 15 years where we know that the highest-performing shareholder companies in the United States are those companies who are also the most successful in creating these cultures of health and wellness.

We started this research back when we started I-Trax because we serve in a very intimate model. When we look forward, there’s one group who we know isn’t going to lower healthcare costs. In our opinion, that’s the payor. The payor is not equipped to lower the healthcare cost. The dramatic change that we think will happen is two-fold. We’re going to see consumers demand value rather than just cost. The value is defined as high-quality bundled services.

We also see a dramatic change that will happen amongst the employers or the sponsored population. We see employers really begin to understand that for every dollar they spend on healthcare, they’re losing two to three dollars in employee productivity and real contribution to that company’s success. Healthcare needs to move away from being a cost centre into an investment and you need to look at all five of those cohorts.

There are ways of developing and growing in our company that will allow us to continue to identify those movers and deliver those integrated services. We think that there is a tremendous change that is going to be coming. Even Medicare and Medicaid services are changing the reimbursement models ,driving it to value and bundles services, so that instead of just getting a surgery, your cost would include not just the pre-surgery testing and the surgery itself, but also the rehab and the home care afterwards so that you’ll be able to cut costs.

We know facilities where hip replacement, in many cases, could cost $45,000. If done in a bundle with a value-based model, the reduction is up to $25,000. There’s tremendous waste in the system and tremendous money is being spent after people are already too sick. The trick is to move it to the well, at risk, and to manage the chronics. If we can prolong the at risk from getting chronically ill, that’s a good thing. If we can prevent folks that are chronic moving into the catastrophic, that’s a good thing. Then deliver those who have an episodic need the highest quality and best price are the key issues for all the employers out there.

In our world, we look at it as we’re making healthcare easier. It’s very difficult for the average American. We’re a phone call away 24/7 and you’re going to speak to a clinician in 12 to 15 seconds. That’s pretty comforting to know that you have that at your fingertips.

This segment is part 5 in the series : Thought Leaders in Healthcare IT: HealthRight CEO John Palumbo
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