On Wednesday, at the Economic Club of Florida, hospital executive Alan Levine had an urgent message for his colleagues: We need to get out of the hospital business.
Hospitals’ current business model of treating patients for acute problems is too expensive, Levine said.
Hospitals can no longer wait for sick people to show up in their emergency rooms. Instead, they must take a proactive approach to community health care. The future of health care is preventing health problems in the first place.
And when patients do have health problems, they should be treated in their homes — not during expensive hospital stays.
In short: Hospitals need to aggressively seek out new ways to make money and rely less on charging exorbitant sums to treat people at their facilities.
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Levine shared his vision at the exclusive Governor’s Club in Tallahassee, a members-only refuge for Florida’s political leaders and creatures, conveniently located in the shadow of its Capitol.
Wednesday’s audience included some of the top hospital officials in the state: Florida Hospital Association President Mary Mayhew and Executive Vice President of Public Affairs David Micah Jr., Florida Safety Net Alliance spokesperson Melissa Stone and former Florida Agency for Health Care Administration Secretary Liz Dudek.
Mayhew and Levine are also both former Fla. AHCA secretaries, and as such, were once responsible for regulating the industry they now help to run.
If Levine could convert them to his vision, it could dramatically reshape the patient experience for Floridians.
Levine proudly touted using telemedicine and other cost-saving initiatives at Tennessee-based Ballad Health, where's he's CEO. The overall effort reduced the amount of time patients spent in the company's hospitals, which led to a $200 million drop in revenue.
But he also saved money — gaining a net financial win.
Levine argued that hospitals had to take a more systemic approach to health care to secure both the industry’s — and society’s — long-term survival.
"This is what leaders in health care have to do. They have to start asking themselves two questions. Number one: How do we contribute to the larger social issues that we’re facing as a country?” Levine said. “And, if we don’t ask that question, what value do we have?
“If all we’re doing is showing up for the purpose of billing and collecting, that’s not a model that’s sustainable. Nor should it be,” Levine said. "When you have a disaster brewing, you can’t wait for a problem to show up, you have to be like a guided missile looking for problems to solve.”
The pandemic has exposed the health care system’s short-sighted business model. When the pandemic caused fewer patients to visit for cancer screenings and elective surgeries — threatening hospitals’ and other providers’ cash cows — the federal government was forced to pump $178 billion into their bottom lines.
Over the course of an hour, Levine laid out five different areas health leaders need to take on to curb the current health crisis and create a sustainable future.
Leaders need to improve home health care, hospital finances and technology. They must fight poverty through community-education programs.
There aren't enough nurses — a problem that's only gotten worse during the pandemic.
And because patients are living longer, their diseases are getting more complicated and more expensive. And because we just lived through a global pandemic, there are going to be continuing health ramifications.
The mergers and acquisitions happening in hospital and insurance companies across the country are making prices explode, Levine said.
“When it comes down to paying the bill, it’s a shock,” Levine said. “The system is getting more expensive and dramatic things need to occur if we’re going to change that cost curve.”
And all these things are contributing to the massive health disparities in different populations.
For every one of his points, Levine gave examples of how his own health care company is trying to solve them:
- Hospitals must get a grip on their finances.
Levine said that while most hospitals’ credit ratings were downgraded during the pandemic, his health system’s rating was upgraded. And unlike his peers, he also didn’t run out of personal protective equipment during the pandemic.
Levine criticized hospitals and insurance mergers for increasing prices. He said he merged with his competitors to save money. To do it, he had to get special permission from two different state governments. It was a controversial anti-trust move, but, he said, his company was able to eliminate waste and leverage their size to bring down prices, not push them further up, which is a common effect of mergers.
“Our merger was done under a certificate of public advantage. We had to demonstrate that what we would do would have a social benefit and not increase prices,” Levine later said in an interview.
- Hospitals must use their good financial position to invest in artificial intelligence and machine learning.
One way Ballad Health has saved its community money is by using telemedicine. From July 2019 through March 2020, Levine’s business did just 2,400 telemedicine visits.
Between March and May of 2020, they did 15,000. Today, they project to do more than 80,000 telemedicine visits a year.
“Particularly with all the investments in technology, the use of telemedicine connected to artificial intelligence is going to transform how health care is delivered," Levine said.
- Hospitals must get into patients’ homes.
“There is a day coming in the next decade where most hospitalizations won’t be at the hospital — they’ll be at home,” Levine said. “The only people in the hospital will be people who have had surgery or have a serious medical condition where the hospital is the only safe place they can be.”
- Hospitals must create preventative programs to curb poverty.
At one of Levine's Ballad Health hospitals in Tennessee, he instituted a program to help new mothers struggling with mental health and substance abuse issues.
The overarching goal of that program is to prepare the children of those moms for kindergarten. Children who are kindergarten-ready are more likely to achieve a third-grade reading level.
“If you have a high level of proficiency of third-grade reading, you are four times more likely to graduate high school, college, or be career-ready,” Levine said in an interview.
- Higher education should move away from graduating nurses with advanced degrees.
There are going to be at least 176,000 openings for nurses a year over the next decade, and most of that need is going to be for bedside nurses, Levine said.
He said hospitals executives should make clear to colleges and universities that their desire to produce graduates with advanced degrees won’t meet hospitals' labor shortage.
Hospitals’ current business model isn’t even working, Levine said in an interview, citing the closure of rural hospitals.
The nation’s largest hospital chain, HCA, is already seeing this. The company that “historically bet on higher admissions” is now investing in digital health care startups, “because even they know where this is going,” he said.
The practical side to this is that making hospitals proactive and efficient could have a dramatic effect on the patient experience.
Health care would be more convenient and humane if it were delivered in our own homes. It would also be cheaper, as patients wouldn’t shoulder the high costs of in-patient visits.
And it would be more accessible: it would push health care into the 21st century, bringing better health care to every human with a smartphone.
To me, that sounds like the health care future I envision: putting the needs of the patient — not the hospital — first.
Until the country decides to invest in primary care, the health care conundrum of cost and access will continue to grow. With a $4.1T industry, it is recognized that between 4.5 and 6 percent is spent on primary care. Alan’s efforts here notwithstanding, there is no effort to look at reality.
Enjoyed the article and found it very informative. I believe those ideas make sense and I’m glad I live in Ballad’s area. I’ve been treated at several of their facilities, including for cancer, and have always had a good experience.