Affordability. Value. Accessibility. These issues are driving health systems to change more quickly than ever.
But what is needed to better align health care with consumer expectations?
We discuss this and much more with Dr. Paul Keckley, an independent healthcare advisor that participated as a facilitator for the Affordable Care Act.
02:20 Pinning Down where Healthcare is Going
04:00 How Healthcare Policy Intersects Industry Activity
07:20 3 Keys to Driving Healthcare Policy Value
11:32 Healthcare Policy’s Impact on Technology
13:58 Why Healthcare Policy Lags Healthcare Industry
16:10 How to Approach Healthcare Policy Challenges
20:15 The Return to Pay for Performance
23:30 How Healthcare Leaders Can Prepare for Policy Shifts
29:00 Cross-Industry Conversations Needed
35:10 Capital, Technology, and Policy: The Intersect Healthcare Leaders Should Know
This conversation is brought to you by Actium Health in partnership with the Forum for Healthcare Strategists.
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VP, Applied AI & Growth
Dr. Paul Keckley
The Keckley Group
Paul Keckley, PHD (00:00):
The future is not a repeat of the past. And the post-pandemic system in the US will be reconstructed over the next three to five years in a way that’s significantly more changed than we saw in the past 20 years.
Chris Hemphill (00:27):
Hello Healthcare Podcast has partnered with the HMPS to bring a little bit of that HMPS experience to wherever you can watch it later on, on YouTube. And what we’ve been covering are topics like the inner section between healthcare marketing, patient outreach, patient engagement, to things like the consumer experience and artificial intelligence and how we can better reach our consumers based on their individual context. But as we’re covering in a couple of conversations, all of these things aren’t possible unless there’s good policy underpinnings that allow our providers to focus on the types of care that we need to deliver, that focus on people being able to even afford or access that care, or even focus on people being able to prove the value of those results. And that’s pulling right from the Paul Keckley playbook. And it’s an honor to have a discussion with Paul about these sorts of things. Paul, just wanted to just get you to say hello and provide a little background on what you’ve been up to.
Paul Keckley, PHD (01:37):
I’ve been trying to figure out healthcare for 45 years. That’s what I’ve been up to.
Chris Hemphill (01:43):
Paul’s been trying to figure out healthcare and very humbly has been shaping some of where healthcare is going as well. Paul, like with the development of the affordable care act, was instrumental in negotiations between Washington and private industry and continues to influence healthcare policy today with The Keckley Report. Honestly, there’s all kinds of things that I’d love to delve deeper with Paul in including some studies that he was doing way back at Vanderbilt University on what impacts consumer choice and what impacts consumer decisions, but really what we’re going to be focusing on today is the vision around the policy steps that we need to be able to create the type of care, the type of healthcare system and policy framework that people can afford and access care. So, Paul, this might be a 30,000-foot question, but I’m just really curious about the vision and path that you’re pursuing these 45 years of trying to figure out healthcare. Can you tell us what all this means in terms of affordability and value?
Paul Keckley, PHD (02:53):
Well, the academics call it a complex adaptive system, which means it’s too complicated for anybody to understand and it doesn’t change fast. It’s iterative. It’s incremental, all this and that. So what I’ve tried to do is to understand from lag indicators where it’s been, and then from lead indicators inside and outside healthcare where it’s going and how each sector in the system is impacted by technology changes or by changes of consumer expectations or changes of capital flows into the system from various public and private sources or changes in regulation that are kind of guardrails in which everybody operates. And what I conclude from all of that is that the future is not a repeat of the past, and the post-pandemic system in the US will be reconstructed over the next three to five years in a way that’s significantly more changed than we saw in the past 20 years. That’s a lot.
Chris Hemphill (04:14):
That is a lot, but you’ve ventured out to understand it anyway. Could you tell me kind of why you’re embracing this journey?
Paul Keckley, PHD (04:22):
Yeah. It was innocently what I intended to do when I was 14 years old, and I worked at Erlanger Medical Center in Chattanooga, Tennessee in central sterile supply as a kid. And I saw the health system and I decided I’d major in organic chemistry in undergrad, and then go to med school. And then I had a great mentor that said you’re geared to economics and policy. He was a clinician and a family friend, and he said, I’d move you this direction versus that. So that’s where I was, and he was right. I got totally immersed in understanding a system that was not understood by most, that was bigger than most other industries, and that had some flawed assumptions about markets. And now the fault lines and all these flawed assumptions is where all the activity is from private investing. And otherwise, it’s just how did we get to a system where all the incentives are malaligned, where the notion of not being transparent is a standard mode of operating. We just really don’t want anybody to know really what we do. We just want somebody else to pay for it.
Paul Keckley, PHD (05:47):
So I just found all these fascinating things, comparing it to other industries that were going through changes, like financial services and others, and brought it back to healthcare. And my framework’s always been to look at the intersection of policy and industry, to look at lag and lead indicators, and to try to differentiate between a fad and a trend. This is something that’s one-off. It’s an event that vaporizes, and this is something that permanently reorders the way the system operates. And you can’t ever get tired in this industry, because it changes so fast, but it doesn’t change fast when you’re inside the system because you’re busy protecting the way it was done yesterday, whether it’s reimbursement or how we diagnose and treat. Really the habit we have that’s bad is that we like yesterday, and we think that tomorrow should just be a slight tweak of yesterday. And every other industry as significant as ours has said, tomorrow is not a repeat of yesterday. That’s the reason in the travel agent business, you don’t have travel agents. And instead of bank tellers now, we’ve got ATMs and it’s all electronic, but we’re slow. So that’s what excites me about it.
Chris Hemphill (07:25):
So one thing that I cue into is what our change over time. Tomorrow should not just be a slight tweak of yesterday. It’s not the same. So just to dig into that, what should tomorrow… What kind of tomorrow are you focused on? I’m curious about the types of policy steps and what those objectives that we should be focused on.
Paul Keckley, PHD (07:54):
Well, several things. One would be… The one that gets all this attention is the shift of incentives from volume to value. Well, that presumes that we can define value within a reasonable timeframe. Is it 90 days or is it five years?
Chris Hemphill (08:10):
Literally, one of my questions was what is value?
Paul Keckley, PHD (08:12):
Well, I think that’s one of those great throwaway lines that everybody uses. We don’t have a definition of value. We have to define it, and then we have to manage to that endpoint. So the first part of that is a standard defining value across all delivery mechanisms in the system because drug companies says my drug produces incredible value and defines value its own way. And a health plan defines it a different way. And orthopedist defines it one way, and the internist, a different way. And in other systems of the world, like the National Health Service and others, you at least come together around standards for defining value. We don’t have that in our system. We let everybody define it their own way and then sell ads and promote themselves as the high value provider, but there’s no consistency across this. So we’ve got to get to that. That’s one.
Paul Keckley, PHD (09:08):
We’ve got to connect health and social services or health and human services. It’s, in our system, completely disconnected. So the pandemic exposes us to the disconnect. If you’re an underserved population or if you live in certain types of communities and this and that, if you’re of certain ethnicities, then you’re not a part of the healthcare system. Well, we, in our system, don’t fund social services adequately and we operate them independently. So we don’t have health and human services. We have health or human services depending on who you are. So I think that’s a threshold issue. How do we get to that? How do we actualize self-care. Everything about the future says that we can enable individuals with different learning styles and sit different social circumstances to engage in their own self-care. We can get from here to there. We’ve got the tools to do it. We have to create the policies that encourage and accelerate it instead of reward barriers to that, and that’s a big deal.
Paul Keckley, PHD (10:29):
We’ve got to kind of settle on what’s the role of private capital in our system. Our system is dependent on private capital. The funding from the government covers less than half of the capital coming into the system. So if you think about it, the drug companies and the device manufacturers and the fourth of the hospitals in the country and every medical practice, for the most part, operates as a “for-profit” entity, but we put a stigma on that around some hospitals. I think we got to step back and let’s think about the balance of profit and purpose instead of whether your ownership status is for profit or not for profit. And I think that’s going to be a big issue as we define community benefits or variety of other things. So those are all things that we have to solve in the next three to five years. That’s how fast this has to happen.
Chris Hemphill (11:31):
So there’s a fast track here. And while you were talking, I was thinking about… Well, you were talking about the ability to influence consumer decisions and embracing their own care. And I’m wondering, do you focus more on that as a technology problem or as a policy problem?
Paul Keckley, PHD (11:50):
Both. I can’t separate the two. Guided technology enabled self-care is dependent on policies that encourage risk, so the risk taker that’s going to build those platforms. It can’t dissuade whether it’s through the tax code or through its use by provider organization. It can’t dissuade introduction of these technologies. The reason the workforce issues keep popping up right now is the healthcare industry’s workforce is technophobic. We don’t like technologies that change the way we did things yesterday. We tend to operate with one year of experience 10 times instead of 10 years experience. We were addicted to this is the way we have always done it. And technology is basically disruptive. It’s a “I’ve got a better way.” So if you don’t have policies that encourage it, you can have all the technology and all the venture capital and the private equity you want. You’ll never become part of the mainstream. We got to converge the two.
Paul Keckley, PHD (13:07):
And ironically, in some industries, it was policy that led technology to the solution. It was laws that enabled banks to become not just banks for receiving assets and then making loans, but allowed banks to get into other areas of financial services. Well, healthcare, we still operate as if everybody controls their own fiefdoms. We create the firewalls and make sure they’re not broken down and that’s not the future. So the intersection of policy and industry is an important framework. You can’t separate them. You can’t ever take technology solution and void it from a discussion of a federal or a state regulator. And for the most part, policies tend to lag not lead industry because the people that have to approve policy changes don’t understand healthcare well. State legislators are completely ignorant of healthcare. They just know it’s a line-item budget for Medicaid or their portion of a chip program.
Paul Keckley, PHD (14:29):
But when they go home, they hear the doctor complain, the hospital administrator complain, the home care agency complain, and they hear, well, they’re just not getting enough money. It’s not a fundamental understanding of the system. It’s anecdotal. So if I had an aspiration, it would be that every elected official – blue, red, state, local, federal – has to go through a crash course in healthcare, understand the system, understand all the moving parts, and agnostic to whether the policy is red or blue. I don’t think healthcare is any longer a partisan issue. It’s just simply a matter of survival. And until we get to that, we’re going to see radical incrementalism. We’re just going to keep poking holes. And then we’ll fill with a piece of chewing gum in the dike. We’re not building something to keep the storm away. We’re basically plugging holes and dikes, not going to work.
Chris Hemphill (15:33):
And that’s a really interesting way to word it too, because from a policy perspective, if the policy is so far out of what kind of return or risk taker could generate, if it just absolutely doesn’t make sense to pursue a technological path because the policy isn’t amenable to it. Let’s take telehealth for example. Before we had emergency reimbursements and things like that for it, it just wouldn’t make sense to make the kind of investment that we’ve most recently seen. Begs a question, especially with the three- to five-year gap that you’re focusing on. What types of policy do you think that we should see? What kind of transition will help us get more towards this goal of affordability and value? And does it seem like we’re on the right path?
Paul Keckley, PHD (16:30):
In some areas, we’re on the right path, but it’s slow. So interstate packs about credentialing providers is one of those incrementals. You’re credentialed in Alabama. You could be credentialed in Mississippi because you were credentialed in Alabama. So expand that to pharmacists and nurses and a variety of other disciplines, in which we can standardize credentialing and make it much more efficient if we’re looking at people instead of you’re licensed in a state, you’re licensed to perform these tasks. If you think about it, telehealth, virtual care is precipitating the usefulness of people who may not live in new your community or within the boundary of your state. So there’s a lot of work to be done around credentialing the setup providers that provide services, not necessarily locally. We’re probably making some headway and rethinking markets. From a policy standpoint, every sector of healthcare defines its market differently.
Paul Keckley, PHD (17:38):
So hospitals think in terms of 390 hospital service areas, HSAs in the country, but insurance companies think in terms of states that regulate their plans. And the device and the pharma people think of global markets, and they’re not constrained by other than country boundaries. So we need to sync up how we’re defining markets and we’ve made a few changes there. Should the way hospital competition is defined be based on inpatient utilization only? Should we be thinking about regionalization of these markets instead of its local when half the hospitals in the country are part of multi-hospital systems? We’re inching along on just stuff like that. I can just go through a list of things where we’ve made some incremental changes that are opening us to the future of healthcare, but then you look from outside healthcare at the people that would rather pay a fine or get forgiveness than ask permission because they say, “Yeah, I don’t need to wait on you for that.”
Paul Keckley, PHD (18:58):
If I’m Walmart or Amazon or Walgreens Boots Alliance or CBS, Microsoft, Intel, Google, I’m not waiting on all the normal conventions to tell me how to operate. I’m just doing it. Right? I’m running pharmacies that sit beside clinics, that sit beside prophylactic dentistry and an optometrist, and I integrated those as primary care that’s not dependent on an MD or a DO doing a physical exam. Did it without permission. Surprisingly private equity, private money said, “We like that model better than defining primary care as a physician who sees 30 patients a day.” We don’t think that’s the future. So I think markets are going a lot faster than… And it’s nonconventional markets than the incumbents.
Chris Hemphill (20:00):
Interesting. So can you talk a little bit more? We have… I think that one big lever on this shaping policy picture is kind of these incumbents that are bringing new business models. We didn’t even talk about like brand new technologies, but just new business models that we hadn’t expected or seen in the past, but now policy has to keep up.
Paul Keckley, PHD (20:24):
Yeah. Policy doesn’t know what to do with pay-for-performance. That was the predecessor before the current value-based initiative. We used to have pay-for-performance programs. We’re really not sure what that means in healthcare. We just always define it a little differently about every five years. Right now, it’s 55 alternative payment models, and we think if you share some risk for some downside, then you’re at risk and values the result. I think where we’re going to end up on this is we’re going to go back towards some kind of capitated model. If you think about it, if the government were to capitate healthcare in a market on a per-head basis and it included health and social services and it was more than a one-year agreement, if I had three years to get my arms around a population’s health, I bet I wasn’t having to defend spending money on food insecurity or poor air quality or housing deficits.
Paul Keckley, PHD (21:48):
It’s amazing that social determinants kind of became kosher when organizations that were at risk, capitated organizations were already paying attention to that stuff. And they were incorporating that into the way they diagnosed and treated, whether it’s loneliness for seniors or it’s food insufficiency for kids and dire circumstances. Those organizations treated that as part of being a healthcare provider, but in the traditional world, we paid no attention. We said, that’s sad, but our job is to diagnose and treat. Here’s the script. There’s the operating room. That’s not the way to deliver healthcare. So fortunately, that’s changing. It’s changing.
Chris Hemphill (22:44):
And that leads me to another question, but, well, it is really interesting to see how there’s an entire economic structure, but so long as the payment model was based on continuing to receive set fees based on multiple repeat services, it just didn’t beg the question at the time on focusing on social determinants of care, but in the meantime, those that were kind of in that pay-for-performance model, just overarching pay-for-performance concept, were already paying attention to these environmental factors. So it begs the question, as we’re moving more towards that performance-oriented model, how should healthcare leaders or people in our incumbent infrastructure, the folks that are delivering care right now, how should the healthcare leaders be focusing or preparing for these shifts as they come?
Paul Keckley, PHD (23:46):
Well, science is a great revelator, and everything we’re learning, we’re finding out that the way we’ve diagnosed and treated and delivered care was suboptimal. And it’s not… What we’re prone to do then is blame somebody for that. So, yeah, we put a lot of money into a sick care system and yeah, the orthopedists make three times what the primaries do, and yeah, if you are a procedurist and you’ve got stuff going on in your practice other than just seeing patients, you’re worth more at a private equity. So all that’s true. But then on a go-forward basis, you say, is that sustainable? Is that going to be where we need to be in five and 10 years? And the answer is no, because we can’t afford it, period. So if I reverse engineer that, a leader would have to say, “This is not about bad people. It’s about a flawed system.”
Paul Keckley, PHD (25:00):
So how do we correct fundamental flaws in the system without everybody pointing fingers, which is what we’re prone to do. It’s the reason AMA represents about a fourth of the doctors in the country, because most doctors identify themselves with their specialty, not with AMA. That’s because we just keep carving up the pieces and then fighting for my piece of the pie. So what I want and what I desire is that policy makers, at a federal level in addressing those fundamental flaws, establish clearly that the status quo of the future is not a repeat of the past and the endpoint in 10 years needs to be this. And I believe that to be a model that’s integrated, so it’s health and social services. It’s a model in which preventive and primary and longterm care are central features of that system instead of peripheral appendages and the specialty care is the hub.
Paul Keckley, PHD (26:14):
And I believe it’s one that’s technology enabled and recognizes people care for themselves, but need guided self-care management tools. And if I start from that as the endpoint and then work backward, I can make some pretty clear changes in how we think about things, whether it’s… I’m always intrigued by retail pharmacy and why suddenly the consumers are pretty willing to go to a retail pharmacy to have their sleep apnea tested or determine whether the medications for their babies are the right medications, where a pharmacist becomes part of primary care delivery. So I think we’ve got a lot of opportunity. I think the window we’ve got a lot of things we have to do. Why three to five years? It’s because of election cycles. In ’22, in all likelihood, the House would flip. When Clinton had both houses, his democratic houses, he lost 54 seats.
Paul Keckley, PHD (27:27):
When Obama had both houses, when he was elected his first midterm, 2010, he lost 63 seats. So Biden’s likely to lose the House, which means you’ve got dysfunction in Washington or at least 324. And you’ll have a national discussion about the deficit, about healthcare, about Afghanistan, about the handling of the pandemic, and will lose a teachable moment to think about healthcare. And then meanwhile, it’s become 20% of the federal budget, 20% of the federal budget and the fastest growing. So why not, independent of all that political noise, why doesn’t the private sector, large employers, technology companies begin that national discussion about where the health system is in 10 years? Because I don’t think it will come from the political process, and candidly, I don’t think it comes from the trade groups. Trade groups are membership organizations and the members pay them to make sure that they’re not hurt by proposed changes. This is disruptive, this destination in 10 years out is disruptive. It just happens to be what we need for the healthiness of our population, but it may not be what everybody in the system today is comfortable with.
Chris Hemphill (28:58):
Well, you mentioned a whole slew of different people in different industries, different folks that are going to have to come together to have this conversation. And any other day, if somebody tells me about all those people that need to come together, I’d get overwhelmed. I wouldn’t believe that it was even possible, but with your background on facilitating conversations between DC and private sector and the Affordable Care Act, I’m curious about how you see that vision, that path of conversations needed to happen for the 10-year vision that you’d outlined.
Paul Keckley, PHD (29:32):
Well, having the right people is the start. So for every sector of the system that thinks its input is absolutely essential to this conversation of what true north is. There are 15 other sectors that say I’m equally important. So the selection of the right eight, 10 sectors to be at a table is key. And second is the methodology. The methodology should never be about a blame game. It should never be about really undermining the integrity of the people that have sweat bullets to get their organizations to where they are. I don’t discount what a lot of people have done very effectively in the systems past. I just know for a fact that that’s not sustainable for the future. So we have to address things that get very detailed without TV cameras trying to get a 30-second sound bite so they can sensationalize something. So how do we have difficult discussions around drug patents that, in many ways, discourage affordable drugs? It lets a drug maker keep a product on the market longer at a higher price than what anybody pays around the world and protects them against competition.
Paul Keckley, PHD (31:12):
So those very detailed types of things, you can multiply that a hundred times. That requires some technical discussion. It requires some data. It requires alternative scenarios, and it requires alternative scenarios with input from other sectors. It’s not just a drug company problem. It’s not just the bio and pharma sector problem. It’s a health system problem. So that’s where I start, and it’s an intense set of discussions and requires, I think, intellectual honesty and recognizes that healthcare is always going to be huge. It’s not just another industry. Next to social security, it’s the number two part of our economy and the fastest growing in the household, fastest growing in the state, fastest growing to employers. So we’re going to have to get our head around it and it’s doable. It’s not doable within the constraints of politics. So that’s my caveat.
Paul Keckley, PHD (32:26):
I found during the Affordable Care Act discussions and even after, health policy changes and health industry changes don’t conveniently occur in election cycles. Just don’t. If you think about a drug coming to market right now, it’s 17 years from bench to bedside, basic science to bedside, I just covered five administrations. We’ve got to rethink healthcare outside the political lens with a fresh set of eyes, and that’s kind of where I’d start.
Chris Hemphill (33:04):
Excellent. Well, that helps me see that 10-year horizon was a very carefully chosen number.
Paul Keckley, PHD (33:09):
Yeah. Yeah. And the irony is when the CBO is referenced as a source for evaluating what something’s going to cost Congressional Budget Office, they’re required by law to report to Congress what something would cost for 10 years. They’re enabled to do that. So when the Affordable Care Act was passed, everything was projected from 2010 to 2019. It was passed in 2010. Well, that was not a convenient number, 10 years. It’s what they were authorized by Congress and by law. In reality, the implications of healthcare spending and investments we made extend beyond 10 and 15 years. So we need to be thinking about what happens when, not if, when we’re treating 6 million people who have Alzheimer’s with a drug that’s readily accessible and affordable and is a step therapy. It’s a standard of care for these 6 million people. Or in eight to 10 years, when we recognize early symptoms of Alzheimer’s and we treat it with an alternative therapy. Let’s integrate all of those into our forward view of the system. Instead of we get an approval and that drug is now on the market, Aduhelm, and it’s $56,000 and has to be intravenously administered, and now go figure out how you’re going to afford it. That’s reactive. That’s not proactive. And that’s what we do every day.
Chris Hemphill (34:55):
Well, Paul, I have to… I’m really thankful that you came and shared this overall vision to a step back. We started the conversation kind of around the basics around affordability and value, and then really outlined a policy path and a technological path to be able to get there.
Paul Keckley, PHD (35:17):
Hard to separate all that. Clinical innovations, technology innovations, how the capital markets respond, how consumers navigate the system and then how the regulatory swim lanes are rewritten, redefined, all of that is a confluence that every industry leader needs to recognize. It’s not just one of those. It’s just not my piece of the puzzle. It’s the puzzle.
Chris Hemphill (35:46):
Exactly. And there are some challenging conversations that are going to be had. And maybe somebody might want to reach out to you to have some of these challenging conversations. Just curious how people can reach out or get in touch with you.
Paul Keckley, PHD (36:03):
Oh my gosh, just paulkeckley.com, I guess. I’m blessed to be at a point in my career where literally all I think about is fixing the healthcare system. I get up in the morning. I go to bed at night. That’s all I care about. So I do anything I can to do that. And I would say it begins with having honest conversations, instead of spin, sound bites, all the junk that you hear, how quality of care is the best it can be, or everything’s unaffordable, you got the blessing and the curse. Let’s really peel all that back, and let’s be honest about it and then do something. Right?
Chris Hemphill (36:53):
Right. And like to one of the points made at the beginning, when the academic say that something is so complicated that it can’t be understood, then that’s extremely discouraging to the type of conversation-
Paul Keckley, PHD (37:05):
So let’s fix that. Right? Health literacy, we complain about health literacy, but we can fix that. We complain about complexity, but we don’t make it any less complex. We write these executive orders, like the price transparency rule, that don’t help solve a problem, even though they check a box. So let’s engineer meaningful solutions instead of getting political points.
Chris Hemphill (37:35):
Indeed. So folks who are exhausted with all the clickbait and the headlines, you don’t get that from Paul Keckley. So go on paulkeckley.com. You can subscribe to The Keckley Report. It’s good weekly information, and-
Paul Keckley, PHD (37:52):
Chris Hemphill (37:52):
… it’s free. I pay nothing for it. $0.
Paul Keckley, PHD (37:56):
That’s my mission.
Chris Hemphill (37:58):
And for the folks who couldn’t join us on stage today, we hope that you’ve enjoyed this small slice of HMPS 2021.
Speaker 3 (38:08):
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