With more than 13 million customers, Humana is one of the largest U.S. health insurance companies. But, according to Humana’s president and CEO Bruce Broussard, the Louisville, Ky.-based insurer is in the business of health outcomes, not insurance underwriting.
Broussard, the keynote speaker at the HIMSS15 conference in Chicago on Tuesday, described America’s healthcare system as one of the most inefficient systems in the world, calling for a change from the current “supply-based system” to a system built around “demand” in which consumers come first.
“I sit here and represent an industry and represent a company that’s part of the problem,” he told the HIMSS audience. “We realize that and we have to change. We have to change the conversation from an insurance-underwriting business model to helping people improve their health.”
Of the $3 trillion in U.S. healthcare spending, $1 trillion is wasted per year “because we’re focused on the supply and not the demand,” according to Broussard, who added that currently it takes two weeks on average for a patient to see a primary care physician. “If you’re diagnosed with an illness, that’s a long two weeks,” he said. Part of the problem is that 16 percent of doctors’ time is spent on non-value-added activities.
Compounding the problem, Broussard says, is the fact that America’s healthcare system was not designed for chronic care. “Today, 80 percent of our cost in healthcare is related to chronic conditions,” he warned, a number that could grow as the U.S. population ages and becomes more obese. “Seventy percent of the population in America is overweight or obese.”
The current health care system is characterized by non-aligned incentives, limited consumer choice, and silos of health data that lack integration, according to Broussard. “What we as leaders should be striving to do in changing this conversation is addressing how we integrate this system, how we make the conversions of value-based reimbursement, and how we encourage consumer choice.”
Broussard encouraged technology vendors to look at information as a shared asset—not as a proprietary one—that flows freely through the health care system instead being “taxed and tolled” along the way. Health IT is such an important part of the future direction of health care and improving outcomes, he said, including remote monitoring, personal devices, electronic medical records, as well as analytics—all aimed at providing better data.
“Value-based reimbursement along with integration is so powerful. We see today when information is flowing free through the system it creates better efficiency, better decision-making, and a significantly better consumer experience.” Interoperability is critical to eliminating the silos of health data and is “a great place to start,” according to Broussard. “We all can benefit from interoperability.”
However, he cautioned that it will require industry-wide partnerships: “There’s not going to be one company that is going to solve that problem.”
Alternative Payment Models
When it comes to value-based reimbursement, Broussard said that today about 55 percent of Humana’s members are involved in “some relationship with providers that are being reimbursed around cost and quality.” He reported that the company has seen about a 20 percent reduction in care costs compared to standard Medicare fee-for-service, a 10 percent improvement in wellness check-ups, and a 10 percent reduction in ER visits and readmissions.
“We’re seeing an improvement in chronic care management,” Broussard asserted. “We, in our organization, are seeing wonderful results in readmission. Last year, we improved people staying at home 500,000 days. It’s obviously great for society because of the cost of care and on an individual basis.”
Humana’s ambitious goal is to improve by 20 percent the health of the communities it serves by 2020. “We are in the business of health outcomes,” said Broussard, who applauded the Department of Health and Human Services for establishing the goal of tying 30 percent of fee-for-service Medicare payments to quality or value through alternative payment models by 2016 and hitting 50 percent by the end of 2018.
“We, and others, are participating in their learning network and really are trying to figure out how we can make this a winning goal for everybody,” he added. “But, I’m telling you it is hard. There are so many processes and systems in this industry that caused it to grow as it is—we have to change it.”
Broussard acknowledged that the required changes and reforms to the U.S. health care system will be uncomfortable and painful. “We can start with interoperability as being the base to bring all this together,” he concluded.
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