HSM 703 Case Analysis-M. Beaumont

Mark Beaumont MD

January 12, 2022

 

 

To: Dr. Devi Shetty, Chairman of Narayana Health

From: Mark Beaumont 

Re: Health City Cayman Islands and the U.S Health Care System

Date: February 26, 2014 

I applaud your efforts to bring high quality care to the people of the Cayman Islands by creating a health system that is internationally regarded as a low-cost, high quality provider of healthcare. You were able to take a successful business model, Narayana Health (NH), one of the largest chains of multi-specialty hospitals in India then translate it to the Cayman Islands. Despite low prices, NH’s outcomes were excellent with a mortality rate of zero; the definition and interpretation of true value-based care. 

You have now established HCCI, after incorporating NH’s efficiencies, and designed a model to dramatically increase access to high quality, affordable care to residents of the Caribbean facing a shortage of care as well as medical tourists facing prohibitive costs in their own country including the United States. The U.S healthcare system and others worldwide are searching for innovative care models that can assist with lowering costs, improve quality of care and increase access to services. As a consultant, the key challenge, is whether your current business model in the Cayman Islands transferrable to the U.S and does it pose any risk to the American healthcare system? 

The US. Healthcare system is broken. It does not always provide consistent, high quality medical care to all people. The WHO’s definition of “true health” seems elusive given the problematic challenges facing the healthcare system.2 It has been well documented that the U.S overspends on providing care and yields only modest results. In 2017, U.S healthcare spending grew 3.9% to $3.5T and accounted for 17.9% of GDP. In 2017 Medicare spending was $705.9B and Medicaid spending was $581.9B. All would agree that costs are uncontrollable but what is troubling is the resistance of parties involved to make changes that are beneficial and financially sound.4

There is a quality of health care gap in the U.S and several factors have combined to create it specifically advances in medical technology and the challenge in translating the knowledge into practice.3 Also, the health care needs of people are changing, due in part to advances in medical science, along with the aging population comes an increase in the incidence and prevalence of chronic medical conditions. Lastly, the U.S health care system is poorly organized, highly bureaucratic and complex requiring additional steps to complete tasks which can slow down care delivery and undermine safety. 

Global competition from NH, HCCI and others is positioning itself to deliver quality medical care to America and this will inevitably compel the overly priced U.S health care system to upgrade and transform. Your creation of HCCI has generated a new conversation which is can this model or even parts of it be transferred to the U.S to help address deficiencies and improve the quality of care provided? Reverse innovation was used by NH achieving low prices adopting many of the economical practices transferred from India.4 From my estimation, as the current trend continues of an uncoordinated, expensive U.S health care system, there will be more interest in the operational approach to care delivery at HCCI. As your model develops, it can potentially disrupt current U.S care plans. The location is close to the U.S mainland, the quality of care is similar to the level care in the U.S and it costs less. Even with no copays, free travel for the patient and a chaperone, insurance companies would still save significant amounts of money.6 U.S insurers and employers are interested in your plan, but it is not a current option. U.S providers and consumers must pay attention to NH and HCCI and how they can provide high quality care for less money and more importantly develop strategic teams to brainstorm the options of opening similar facilities near the U.S to treat patients.

Improving the quality of care in the U.S will require investment, responsibility and accountability on the part of health system leaders. Given the size, number of people involved and how fragmented the system is, organization and leadership are vital to spearhead the effort. First, I would recommend a task force led by the U.S Surgeon General with participation from private and public insurance companies along with representation from provider groups such as the AMA, ABIM and ABFM. This group will hear the strategy and success of HCCI and develop a list of goals that will help to improve key areas of the health care system. The goals must center around the six dimensions of quality of health care: safety, effectiveness, person-centeredness, accessibility, timeliness, affordability, efficiency and equity. Next, the goals will be distributed to providers, hospitals and patients. Areas of potential transferability to the U.S include outsourcing back office operations to low cost, high skilled employees and exploring the cost-saving potential related to task shifting. These processes along with using an assembly line approach to patient flow can enhance patient flow, lead to higher volumes, better quality outcomes and cost reductions. 

Other specific recommendations that I would lend and ask you to endorse that can improve the quality of care and decrease costs in the U.S include investments in technologies including telemedicine, patient portals and remote monitoring and an expansion of more efficient capture and interpretation of data such as EHRs, cloud-based platforms, predictive modeling software and analytics. An emphasis also needs to be placed on developing a system to significantly lower pharmaceutical and supply costs along with decreasing equipment costs. 

Another recommendation I would recommend is transparency of medical costs across the organization. At NH and HCCI, each receptionist, provider and lab technician know the cost of materials used and every procedure they recommend. With the time-based costing model being developed at HCCI, staff will know the cost of each aspect of the patient encounter and how they can reduce that cost through simple efficiencies. I recommend bringing greater transparency to U.S. health care pricing and these efforts could be informed by you and the NH and HCCI models. Cost data could motivate members of U.S. care teams to participate in cost-reduction strategies, particularly if aligned with a service mission, as it is at HCCI: reducing cost of care means that more people can receive high-quality care. I recommend a way to simplify and streamline the billing and coding practices as the administrative burden and costs create significant overhead and debt. HCCI utilizes bundled pricing to cover hospital expenses and complications that arise within 30 days of a procedures. This is a powerful financial incentive for HCCI to achieve high quality outcomes and incorporation of a similar model in the U.S would enhance safety and minimize medical errors.

The unrelenting focus of the NH and HCCI models to find efficiencies in every aspect of the operating model could, with strong leadership, be in part adopted by U.S. health providers and I would appreciate your assistance in working with me to make this a reality.

References

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https://thehealthcareblog.com/blog/2017/04/04/key-mechanisms-that-define-health-city-cayman-islands-value-innovation/

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https://www.visioncritical.com/blog/value-based-care

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https://www.healthcatalyst.com/Leading-Adaptive-Change-To-Create-Value-In-Healthcare

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https://www.healthleadersmedia.com/innovation/how-rwjbarnabas-health-using-innovation-transform-value-based-world

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https://hbr.org/2016/12/how-atrius-health-is-making-the-shift-from-volume-to-value

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https://www.modernhealthcare.com/technology/innovation-value-based-care-investment-health-system-ceos-say

Deloitte.com-Top 10 Healthcare Innovations; more value, better outcomes for less.

https://www2.deloitte.com/us/en/pages/life-sciences-and-health-care/articles/top-10-health-care-innovations.html

Johnson, P. Diffusion of Innovation to improve Healthcare value: Physician-led redesign; Healthcare report.

https://www.healthaffairs.org/do/10.1377/hblog20190308.817613/full/

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https://www.healthcatalyst.com/innovation-in-healthcare-why-needed-where-going

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https://bmchealthservres.biomedcentral.com/articles/10.1186/s12913-018-3682-9

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