The imperative for a new value assessment mindset in healthcare IT
Early on in my taking the helm of Chilmark at the beginning of this year, it dawned on me how many new conversations I was seeing happen in the space about the difficulty assessing the value of IT in healthcare. There was a lot of talk of vendors needing to demonstrate the ROI of their offerings, but it was not entirely clear how to quantify that in many situations where the objective of the implementation may not be clearly tied to a financial outcome.
In the world of healthcare, where patient experience / quality of life and physicians’ ability to feel fulfilled in their work are key drivers of success, defining ROI with a sole focus on finance just didn’t match what I was hearing from colleagues and seeing in the headlines.
Nearing the 15 year anniversary of HITECH, and 20th of the founding of the ONC, it seemed like the industry was having a reckoning with the fact that it was still exceedingly difficult to quantify the impact of the billions of dollars of investment that had been made in IT. Maybe we were seeing this rise in demand for ROI now because the market was mature enough to really start having that discussion in earnest.
We didn’t always know the use cases we were building for. We were figuring out population health and alternative payment models and what we needed to do to succeed in changed care and financial constructs at the same time as we were building new types of technology…I do think we’re at a moment now where there’s consensus about what we’re trying to do, not just, “Yes, we want to improve quality and lower cost,” but on a tactical level, what does that mean?
– Marie Copoulos
I began intentionally interrogating this observation, and after dozens of discussions that validated my gut feeling, I brought together a few brilliant, deeply experienced, and like-minded folx to work on developing a path forward that better aligns with the actual goals of various technology investments across the sector. Along with yours truly, the team that has come together around this effort are:
- Curtis Peterson, Kingfisher Advising
- Marie Copoulos, Horta Health
- Susan Irby and Pam Arlotto, Maestro Strategies<
Each of us brings over a decade of experience in the world of healthcare IT assessment and evaluation from different, complementary perspectives (or multiple decades in the case of Pam and Susan). After months of working on how to approach this, we’re thrilled to introduce our effort to the world, the Health Impact Project. We officially soft-launched the effort last week with the initial installment of our five-part manifesto, Assessing Health Tech Value in the Next Decade.
In addition to the written word, we will be producing a series of podcasts under the Chilcast banner that complement our manifesto releases to provide more color and context to each article. In our first podcast, which you can listen to below, the team dives into what motivated each of us to come together for this work, the values we each bring to the table, why this has been hard for the industry so far, and what makes this work so mission-critical today.
We hope you’ll join us on our journey and be part of this incredibly important discussion!
You can listen to the podcast by using the embedded player below, or in your favorite podcasting app via this link.
Time Stamps of Note
1:24 – Our motivation for coming together to work on this
4:54 – The values we each bring
9:46 – Why is this so dang hard in [US] healthcare?
17:35 – What makes this work so critical *now*?
AI-generated Transcript:
John Moore III: [00:00:14] Welcome back to the Chilcast. I am the managing partner of Chilmark Research and your host today, John Moore. Today we are excited to introduce a new mini series as part of the Chilcast, delving into how different health care industry stakeholders think about assessing the value of digital health and health IT implementations. This session, we’re going to be introducing the core group of us that have convened to actually develop what we are calling the Health Impact Project, which we convened earlier this year with Pam Arlotto and Susan Irby from Maestro Strategies, Curtis Peterson of Kingfisher Advising, and Marie Copoulos of Horda Health. The reason that we came together is that we have all heard ad nauseam over the last couple of years, how important it is for new technologies to show efficacy in the current economic climate. So we decided that it was time to come up with a better metric for evaluating the impact of technology than a standard, oversimplified financial calculation like ROI. This series is intended to catalyze industry conversations we see as necessary to reach consensus on a new model of value that c-suites at care organizations, payers, technology developers, investment firms, and more can apply to their own initiatives in health care. So we’re going to start today by going into what brought each of us to this project. So I’ll begin by introducing Marie Copoulos. You want to take it away, Marie?
Marie Copoulos: [00:01:32] Thanks for having me, John. I’m here representing a couple vantage points. I got into value based care when it was words on a piece of paper, and quickly realized that data was going to go hand in hand in that. And so spent my whole career in alternative payment models and in building the analytics and data teams that go along with it. So I’ve been in the trenches of this, both analyzing policy building teams, helping organizations see value from the investments that they’ve made in that space. But I also come to it as somebody who’s just very passionate about making sure we get value from health care. There are people in my life for whom I am a patient advocate and see firsthand how much our system needs to improve. And so I bring those two things to this project to say, how do we make sure that we’re getting the most value from the investments that we’re making in this space?
John Moore III: [00:02:22] That’s wonderful. Thank you. Marie. Susan, you want to go next? Sure.
Susan Irby: [00:02:26] Happy to be here. Maestro has actually worked over the last 20 years with. Literally hundreds of clients, both on the vendor side, as well as health care delivery organizations to identify, plan for, and measure return on investment. And we want to be able to share our successes and failures so we can do a better job of this in the future.
John Moore III: [00:02:50] Fantastic. And Curtis.
Curtis Peterson: [00:02:53] Hi, John. Hi, everyone. It’s such a pleasure to join today. The work that we’re doing at kingfisher, advising cuts across start ups, funders and nonprofits, all primarily in the health care space, although sometimes in what I like to call health care adjacent spaces. So aspects of people’s lives that really influence their health care, typically thinking about social determinants, housing, food security and something that I see consistently across all of those actors who approach this from very different vantage points, is a desire to really understand is what we’re doing impactful is what we are doing meaningfully changing the lives of individual patients. And that is something that we just continue to struggle with. And it’s something that we often are talking across one another. When we look at different actors, right. The way that an investor or a foundation might talk about return on investment or impact is not necessarily the same way that a startup might do that. And so this, to me feels like a great opportunity to to bring everybody together and everyone get on the same page.
John Moore III: [00:04:03] Fantastic. And so for myself, Chilmark has been around for over a decade now, and we have been evaluating trends in health, IT and technology advancements that entire time. But we’ve only really focused on capabilities and kind of what’s new and what’s going to be enabled by these technologies. We haven’t actually focused as much on the outcomes. And now that this industry is more mature and we’ve gotten past 15 years, past High Tech Act, and there’s enough adoption across the entire industry, I’ve been hearing a lot more conversations about how we actually assess technology, how we actually identify whether or not it is working the way that it should be on just whether or not the functions are working. And so I’m taking that to heart. And I decided that it was time to bring together a group of us to really start tackling how to track outcomes and actually measure the impact of the technologies that we’ve adopted over the last 15 years. So next up, we want to kind of introduce what the values are that we each bring to this project, and why we think that we’re a good group to be the crux of this initiative. So gender. So Curtis, let’s start with you.
Curtis Peterson: [00:05:11] Well, I’ll just out myself right now as a bleeding heart. I came to this work really through social justice and human rights. So, you know, my first career in health care was at a center for health and Human rights at the T.H. Chan School, the Harvard School of Public Health. And we were really looking at health systems largely and quality improvement, trying to understand how they need to function in order to secure access to health care for all without barriers based on people’s income, education level, you know, any sort of aspect of their identity that could be racial or ethnic employment status. So for me, the reason that I’m continue to be very interested in ROI and how we understand impact is because if we are serious about, you know, equitable health care, if we are serious about removing barriers to care, we have to have a useful, functional way to measure that pretty consistently.
John Moore III: [00:06:10] Fantastic. Marie, you want to go next for sure.
Marie Copoulos: [00:06:15] You know, I think one of the values that I bring to this project is a call for courage and honesty. You know, I think this is an industry where over the past decade, hundreds of vendors have popped up in the space and all really trying to help us change care. And I think there have been places where we’ve made important strides, but there’s a disconnect that I feel and have felt right in on a day to day basis over that period where what we’re trying to do, compared with the various different stakeholders who come to the table to have these conversations from a financial perspective, from a technology perspective, from a care outcome perspective is not sufficiently aligned. And I think that that has been very hard in an industry where everyone wants to declare success, to have a real conversation about, are we succeeding in the ways that we want to? And so I think that I think it’s time to do that, but I also think it’s a difficult and courageous conversation for us to have collectively as an industry.
John Moore III: [00:07:14] I love that. I definitely appreciate the part about the courage, because some of these conversations are going to be tough to have, but they’re important and they’re necessary if we’re really going to make change in the industry. Susan, how about you?
Susan Irby: [00:07:25] Okay. Um, I do value our health and care delivery system. But it’s badly broken. And what I believe I’m bringing to the table is some systems thinking the way to develop not good strategies, but great strategies to help our health and care delivery systems and drive change because it does need to be fixed.
John Moore III: [00:07:54] I like that. Yeah. Great strategies are definitely needed. We need to get past good enough. And I think if we’re really going to innovate on this industry, then, you know, we really need to make some bold moves. So from my perspective, I think Chilmark is really well known for objectively covering the industry and really telling things the way that we see them based on our analysis and how we assimilate all the different data points that are coming in, all the different trends that we’re watching. So I think that we bring the objectivity to this. I’ve always had a public health interest, particularly around mental health, personally, but I think that the public health aspect of health care technology is really important to make sure that we don’t lose track of all of this does tie back to helping the greater good. And a lot of times, the public health conversation gets kind of lost in the weeds. And finally, data rights, as we collect more data on patients, as we collect more data on just medical sciences and practitioners, I think that the data rights conversation is going to be very critical to how this industry evolves. You know, personally, I’m very uncomfortable with the number of bars that we don’t have any knowledge of. When we go to a care organization and we sign our consent form for them to work with their various business associates, I understand that this is going to happen.
John Moore III: [00:09:09] I understand that it’s business critical for them to work with these other vendors and to share our data to get reimbursed and things like that, but not knowing what that hierarchical kind of branching logic of how the data gets spread and shared actually comes together, and what we lose in terms of control over our own autonomy around data rights is something that I’m pretty passionate about these days. After seeing how big tech has really violated a lot of privacy with social media and, you know, the more consumer facing side of things, I want to make sure that that doesn’t trickle into health care. So moving on to the actual project here. So one of the reasons why we came together is because all of us have seen this for a number of years and kind of been tracking the value proposition of technology in this industry. So what we’ve all come to appreciate is that this is very hard in health care. So let’s riff a little bit on why is this so hard in health care. And Susan, I think that you’ve been in the industry the longest of any of us. So do you want to take the lead on this one?
Susan Irby: [00:10:12] Sure. To me, the reason this is so hard in health care is that we talk about ROI, and everybody can do a simple calculation on a net present value or internal rate of return, or even a payback period, but nobody really plans to actually realize that return. We’ve worked, as I said, with vendors and health care systems, and we’ll give you one, for instance. And it’s not the only one, but we work with a vendor to do a pre and post test on the value of their technology solution. We measured all the before the implementation occurred. And then when we went in for the post test, it turned out that the client was not realizing any value at all, and it’s because they had failed to properly use the technology in the way it was intended. And that is not uncommon.
John Moore III: [00:11:06] Yeah, that’s pretty compelling for sure. I mean, the implementation and change management that has to go into these is pretty paramount to success. I had a really great conversation with John Glaser this week, who will be our first guest speaker as part of this podcast series. And he reminded me that 70% of digital transformation efforts fail, and that is due to five specific factors that go into the success. And so if you guys want to learn more about that, you’ll have to listen to that podcast when it’s released. But it’s a really compelling point that there’s a lot that goes into actually realizing the value from this. And a lot of C-suites don’t necessarily always make all of the necessary management changes and tweaks to their organizational structure and workflows that they need to to realize that value. Curtis, do you want to contribute to this?
Curtis Peterson: [00:11:56] Yeah, I’d love to weigh in. One thing that I will tweak or refine about your question why is this so hard? I want to center us on? Why is this so hard in the United States health care system? I think all of us are primarily working in the US health care system. This is where most of us have our experience. This is the big, large market that most health technology vendors are very interested in. And, you know, one of the I work a lot with foreign startups who want to enter the US market. And one thing that I’ll often just share with them up front is that American health care is a business. There are many individuals in the American health care system who are motivated by caring for patients, delivering fantastic quality care, you know, ensuring equitable care. And most of them are functioning within institutions that are highly bottom line conscious. And so what that means is that there are often misaligned financial incentives within American health care. We’re dealing with fragmented care and delivery, right. We don’t actually have any sort of like universal health care offering or anything that is sort of like we have some people that are offering, I would say like more integrated provider solutions, but but not a lot. And I think that that complicates our ability to understand when there is a positive impact, because a positive impact for patients is not always a positive impact on a business’s bottom line. I will often do for clients what I what I market as like a payer strategy, right? How are you going to sell into a big payer? How are you going to sell into a large hospital system? Really what I’m doing for them is health economics and outcomes research modeling, although that’s not so catchy and that doesn’t speak to like the need that they are experiencing, which is we’re a startup and we want to sell one thing that happens more often than you would expect is I will build a model for them and I’ll tell them, hey, your solution is highly cost savings.
Curtis Peterson: [00:14:11] If you want to target people who are financing care fee for service. However, your solution is not cost savings and in fact it’s cost additive. If you’re going to provide this solution to someone doing like a capitated value based care plan. And that’s often like, like a, like a heads blown moment for them because their assumption is, well, our solution is either good for patients and good for the health care system or it’s not. And it’s so much more complicated than that. And then, of course, you add on this additional layer, which is many of those purchasers of technology solutions. Are offering both fee for service care and value based care plans and different reimbursement structures. And so it becomes very complicated to tease out both for the sellers of these solutions and for the purchasers of them, like what actually is effective, what it’s actually going to move the bottom line for us, and what’s going to really affect patients in a positive way.
John Moore III: [00:15:15] That was great, Curtis. Thank you. And Marie, how about you?
Marie Copoulos: [00:15:19] I’ll amplify. I think what Susan and Curtis shared, I think it’s really common for outsiders to look into the health care system and say, this should be simple. You know, we have a patient. They’re visiting a clinician. Why is this so hard? And yet I think we see time and time again that the complexity of health care regulatorily from, you know, the local perspective, from the different populations in different communities with very different needs, different payer mixes, all of those factors contribute to really health care being local. Right. And I think what we’ve seen, particularly over the past two decades, is that the business models of health care organizations have become increasingly complicated, that, as Curtis mentioned, you have organizations that are still predominantly in the fee for service world. You have organizations that have moved into new payment models, but often very different portfolios of flavors of payment models. You see them pursuing technology solutions that might help with parts of those problems, but not a holistic set of them. And so when you try to get in to say, hey, what’s happening? Right? The picture is so complex from a business model operation, from a technology perspective. And then critically, to understand what population is this organization serving. And I think we’ve almost lost sight of how do we even crack this open, right. How do we even start to ask questions? And it just becomes a picture that is very muddled. And so I think that’s part of what we need to grapple with as we start to think about how do we assess ROI? Do we have a way to quickly say, where is this organization right now? Because every organization is going to have different needs as they try to implement technology, but then critically understand is it providing value?
John Moore III: [00:17:05] That was fantastic from everyone. I don’t really have a whole lot to add. I’m just going to call out that. I think one of the big issues with why this is so difficult in health care is because these data technologies are relatively new in health care, so we don’t have a whole lot of preexisting data that we can compare to outcomes data. And there’s not always alignment around what those outcomes should be that are being tracked. So I think just at a core fundamental level, the processes have not fully been developed and vetted in the industry. To make this as easy as it might be in, say, a finance industry or a consumer industry. So why change? Why now? And why are we doing this initiative?
Marie Copoulos: [00:17:38] I think when I think of this space, I think we’ve had two sectors that have grown up next to each other. We had the sector focused on new models of care, you know, sort of starting with ACA and various regulations that set forth alternative payment models. And we saw those move through the commercial sector, and we saw those move through CMS. And then in parallel and sometimes connected, we had technology regulation. And of course there were big movements before that. But I think that set the stage for where we are right now. And I think the reality is that technology, right. [00:18:11] We didn’t always know the use cases we were building for. We were figuring out population, health and alternative payment models and what we needed to do to succeed in changed care and financial constructs at the same time as we were building new types of technology. [00:18:25] And so, frankly, I think there was some amount of just figuring out as an industry that we need to do. For those of us that have been in the trenches, we all know there’s a lot of building the plane as we fly and those various analogies thrown around, but [00:18:38] I do think we’re at a moment now where there’s consensus about what we’re trying to do, not just yes, we want to improve quality and lower cost, but on a tactical level, what does that mean? What do we need in care models as as basic building blocks to try to to change the way we do things. [00:18:57]
Marie Copoulos: [00:18:57] And I think that emerging consensus, paired with maturation in the technology space and maturation in data sets that power some of these things, you know, the types of analytics we can do now relative to 20 years ago are so much different. I think it allows us to come to the table to to talk about evaluation in a way that we simply weren’t able to ten years ago. There was important early work there, of course, but I think that we’re much more mature as an industry, and it’s part of the reason we can see the failures is because we have learned so much about what’s working and what’s not.
John Moore III: [00:19:32] Completely agree. Susan, you want to go next?
Susan Irby: [00:19:36] Sure I’m going to address the impact of the pandemic. It was a forcing function in a lot of different ways. It forced us given access to care, to change, to new ways to deliver care, virtual care, hospital at home, all of those pieces that have been really driving this digital transformation. But couple that with the impact on the people delivering care in in two respects. One is the clinician burnout and in fact, the quitting, the quiet quitting that has occurred across the industry has also required things like robotic process automation. Et cetera. And then the third leg of the stool is the fact that health care delivery systems in particular are in deep, deep, deep financial trouble overall. So while they need this technology and they need to address staffing shortages, they don’t have the bottom line to necessarily pay for it. And so they have to watch every single penny they spend. And that then says, we’ve got to really figure out what the high impact technology buys are.
John Moore III: [00:20:47] Yeah. Completely with you there. The other thing that I would like to point out, with the pandemic being a forcing function is driving more of the value towards value based care. So more of the economics have shifted in that direction as a lot of organizations realize that they, you know, if there’s another big lockdown like that or another pandemic kind of situation, they can’t rely on elective surgeries the way that they used to. They can’t rely on some of those big, you know, finance drivers that they lost during the pandemic. So moving to value based care would allow them to stay more solvent. And the ones that actually were more dependent on value based care models over the pandemic fared better than their counterparts, and they were the ones that emerged from the lockdowns and from the shutdowns and everything in a much more stable financial position. Everyone’s struggling, but they weren’t struggling as much. All right, Curtis.
Curtis Peterson: [00:21:33] I appreciate the trends that the three of you have identified. Right? I think what I heard was we have some regulatory things that took place. There’s some industry growth. I think Sue and John, both of you are right to highlight the effect that the pandemic has had on the bottom line of health care providers and health care organizations. I almost want to take us down to even a shorter time scale, which is what’s happened in the past year. You know, I don’t I’m reluctant to say post-pandemic, but in the new phase of the pandemic, let’s say, and the thing that I’m seeing really drive a lot of decision making, both with investors and health care companies, is that money isn’t cheap anymore. So we were in a period where venture money was flowing pretty freely. We had really low interest rates and that just is no longer the case. And I think related to that, we I’ve seen really over the past three years, let’s say, I think this growing recognition that if you’re a health care technology solution, you will not scale direct to consumer. There are always exceptions to this. There are some folks who are still really thinking about this and who are doing it, but I think overall, people are really recognizing that if they’re going to make a health tech play in the United States, they’re going to be selling B2B or or be to government.
Curtis Peterson: [00:23:04] And so I think that sort of coupled with the high cost of money at this moment, is really putting a lot of pressure on investors and startups. And I think, as Sue noted, the health care organizations to understand what am I getting from my money? So if I’m an investor, it’s probably not enough for me to be able to say, this is a fantastic technology with really sound science and great clinical outcomes. What I actually need to know is can it save someone in the health care system money? Can it deliver on some sort of impact? Because if it doesn’t, well, the entire conversation around pricing structure and cost model and go to market strategy is kind of a nonstarter. And I think startups themselves are becoming increasingly aware of that as well, either from their investors or as they start working to sell. And really seeing that, you know, the the clinical outcomes that they have, you know, usage data, you know, all of those traditional product metrics that we often see in digital solutions or software as a service. Yes, they are compelling. Yes, they are great. And they’re not enough to get a buyer in most instances to say yes.
John Moore III: [00:24:24] Yeah. And double clicking on that a little bit. There’s also the fact that a lot of these care organizations are also investors. You know, they’re LPs with venture firms. They’re they’re investment portfolio. Those are massive. And the way that the markets have been hit by recent macroeconomic factors like uncertainty around the government’s credit rating, uncertainty around bonds, sv’s collapse, all of that has contributed to significant devaluation of those portfolios, and that’s also putting increased pressure on them because they don’t have those cash reserves on hand anymore. It’s much more tied up, and they want to wait out these current market conditions to try to realize some of those returns that they had previously been seeing. All right. So I think that’s pretty much everything that we wanted to go over today for this introductory podcast to kind of introduce our community to this health impact project. We will be pairing this episode with a introduction to our manifesto. We are releasing a series of thought pieces that we come together to write that go into more depth around this topic, so please stay tuned for that. And if you want to follow along as we develop this content, be sure to give the Health Impact Project page on LinkedIn a follow.
John Moore III: [00:25:35] And once we get our website up, please go over there and subscribe to the newsletter that we’ll be issuing there. What we’ll be doing in addition to all that is inviting commentary from the community. We think that this is something that needs to have significant buy in from outside of our cluster. We think that we’re a good group to get this started and catalyze it, but that’s what we see ourselves more of as catalysts and conveners of a conversation that really needs to happen to get a broader industry adoption and acceptance of a new model. So as part of that, we will be developing a framework as well. And eventually we do plan to convene an event probably in mid to late 2024. So if anybody would like to discuss that with us, please feel free to reach out and you can contact us. I think we’re all on LinkedIn and we’re all pretty active on there, so you can contact us there. You can also reach us via other social channels. All right. Well, thank you everyone for joining us today. And we’ll you’ll be hearing from us over the next couple of weeks.
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