Change Versus Invention: Innovation and Public Health Care

In this age of technological leaps, there is a common sentiment that a synonym for innovation is invention. While this can be true, there are a number of other words that more closely align with the notion of innovation: change, modification, and mutation.

This notion of innovation is of great importance for public health care providers. These providers represent most of the care for the Medicaid-eligible and uninsured in the wake of the Affordable Care Act (ACA). Part of the ACA legislation focuses on the sentiment of innovation as technological advances. These advances cover updating electronic health records (EHR), the portability of health information, and the like. But for public providers, technological advances comprise only a fraction of manageable action.

In terms of care delivery and cost containment, the ACA ultimately intends to shift the profitability of patients to an outcomes-based system, rather than the traditional fee-for-service system, by aligning payments with performance. However, government-administered programs such as Medicaid and Medicare aren’t bought and sold like goods on an open market. Health care providers budget for these programs in advance as a result of the government appropriations process.

As a federal-state partnership, the state government usually accounts for Medicaid once a year based on previous years’ performance and strategic plans for the future. This process leads to a restriction of resources for public health care providers not faced by their non-public counterparts. Because of this, introducing complex technology into public health care could disrupt an already fragile balance between available resources and providing the quality of care necessary to sustain funding into the future.

Thus, many public health care providers are making organizational changes to recast their culture in an attempt to build a more patient-centered, results-oriented structure. But these changes are, at best, painfully incremental by private sector standards. This seems counterintuitive as providers have a financial incentive to make these changes and a legislative mandate to do so. Shouldn’t public health care providers see rapid innovation?

In 2012, Courtney Lyles and her colleagues sought out public health care leaders in California. They conducted a survey to determine opportunities and challenges of innovating in the environment curated by the ACA. Lyles chose California, as it was one of six states to receive Medicaid expansion funds early, beginning in 2010. The researchers find that these leaders thought innovation centered on implementation and less on technology. These leaders focused on execution of efficient and effective systems to accommodate expanded demand. Providers faced challenges adhering to the performance-based payment rules set forth by the ACA.

Interviewees from public hospitals exhibited vast differences from those at community health clinics. Leaders in public hospitals tended to focus on becoming providers of choice for the wave of the newly insured. Conversely, leaders of community health clinics tended to focus on other areas of health care. They were more inclined to concern themselves with developing external partnerships. These partnerships are necessary to create accountable care networks. Both of these responses make sense given the different goals of the two types of organization. Hospitals tend to focus on competing over patients to buffer their profit margin. Community-based clinics emphasize maintaining continuous care for members of their community. The transition to new reimbursement and payment reforms worried both types of organizations.

Changes in operation, not invention, remedy these concerns. Public health care leaders think of these types of innovations as the future of their organizations. Change of this nature requires careful thought and deliberate action. Thus, innovation is slowed because it is necessarily incremental as public health care providers attempt to adhere to ACA reforms which stress these operational enhancements.

Public health care providers will benefit most by focusing on changes, modifications, and mutations of their current delivery models as opposed to a focus on new technological advancements. The positive outcomes that come with those changes outweigh the difficulties of their implementation. Don Berwick, the former interim director of the Centers for Medicare and Medicaid Systems, coined the Triple Aim: a better patient experience and better population health at a lower cost. If given time and continuing public support, the possibility is real that the provisions in the ACA will have correctly incentivized those that provide care to the uninsured and Medicaid-eligible.

Article Source:  Courtney R. Lyles, Ph.D., et al, Innovation and Transformation in California’s Safety Net Health Care Settings: An Inside Perspective, American Journal of Medical Quality, November, 2014.

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