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Can Behavioral Economics and Smart Contract Networks Help Mitigate the Global Population Health Crisis?

Point Nurse

This is the first of a three part series addressing population health problems around the globe and some thoughts on how behavioral economics combined with blockchain technology can help solve some of these problems at scale.

It is no secret nations around the globe are experiencing rapid growth in their aging and low-income populations and the corresponding cost to provision care for these groups especially those with chronic illness.

In the United States, by 2060, there will be about 98 million older persons, more than twice their number in 2014.   Today, nearly half of Americans suffer from at least one chronic illness.

“A Milken Institute analysis determined that treatment of the seven most common chronic diseases, coupled with productivity losses, will cost the U.S. economy more than $1 trillion dollars annually. The same analysis estimates that modest reductions in unhealthy behaviors could prevent or delay 40 million cases of chronic illness per year.” In the US, the sickest 5% of the population (many of whom are elderly or low-income) spends 50 times as much per person as the healthy majority.

In China, by 2050, the number of Chinese senior citizens will equal Europe’s entire population and outstrip Americans of all ages.  As China’s population ages and society modernizes, the occurrence of chronic illness will continue to rise to historic proportions.  Long term healthcare costs for the elderly will continue to accelerate and outpace incomes in China as the number of adult children who took care of elder parents in the past will be less feasible given historical population trends.

Who will care for all of these aging and chronically ill populations?  There will not be enough older children, nurses, and doctors to provision quality care around the globe.  As societies, we will need to look to more scale efficient innovations and solutions to help solve these inevitable healthcare delivery challenges.

Population Health Management

Governments today are starting to mandate new programs to incentivize healthcare organizations to focus on health outcomes rather than payment for treatment the motivation of which is to get healthcare providers focused on keeping patients healthy versus collecting a fee per clinic visit – healthcare versus sickcare.

As Medicare and Medicaid in United States adjust their payment model to reflect value-based care vs fee-for-service, healthcare organizations will need to report on their value-based care efforts and achievements inside and outside of the clinic including managing social, behavioral, and community determinants to receive value-based incentive payments and avoid penalties.   The vast majority of existing healthcare organizations do not have proactive or community wide population health programs that go beyond their clinic walls or patient panels.

Population health has many definitions depending of course where you sit.  Public health officials tend to be geographically focused on health issues broadly impacting groups of people.  These officials aim to reduce health disparities among different segments of their populations.

A hospital administrator or insurance company (payer) on the other hand are likely to only focus on their direct and existing patient population or membership by stratifying these groups by disease state (risk profile) and targeting each segment with tailored care programs typically using nurses and case workers to monitor patients outside of the clinic largely by phone calls with little or no timely verification of adherence to care plans or follow up.  This is particularly true for patients recently discharged from hospitals and who are at risk of readmission.  Readmission penalties by Medicare and Medicaid are stiff so hospitals have an incentive to proactively monitor this group.  However, these programs are largely ineffective as they are typically short lived, non-engaging, data starved, and do not proactively address other segments of their population and factors not typically monitored by provider organizations such as socio-economic and behavior.

Governments, insurance plans, and health systems must seek out more innovative solutions beyond clinic and hospital walls and outside of their silo networks.  To address the problem holistically and more effectively, health plans and providers will need to interconnect and align themselves with a broader group of stakeholders outside of their historical sphere of stakeholder collaboration.

Factors That Influence Health

University of Wisconsin Population Health Institute

Research at the University of Wisconsin Population Health Institute reveals over 80% of the factors that influence health are outside of clinical care.  Social and economic factors have the greatest influence on health (40%) closely followed by health behaviors (30%).

Healthcare organizations have been historically sickcare focused which is understandable given the historic sickcare payment or fee-for-service model fashioned by governments. This is changing.  Now, healthcare organizations will need to begin to focus on provisioning and measuring preventive care as government reimbursements change to value based payments.   This will require going beyond monito
ring wealthy consumers wearing Fitbits and consuming medications.  It will require more expansive and deeper networks and interoperability as well as new techniques and strategies to keep healthy consumers healthy and get chronically ill consumers healthy again.  Additionally, it will require advanced interoperability with community wide stakeholders with embedded automated behavioral economic models to help monitor, incent, and nudge all patient stakeholders to keep consumers healthy and help get unhealthy consumers healthy again.

(In the next post, we will discuss behavioral economics in healthcare as one important tool in the fight to keep consumers healthy and to get those who are sick healthy again.)

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