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The looming epidemic in chronic diseases, accelerated by aging populations and increasing prosperity, is threatening to overwhelm healthcare budgets and economic growth across the globe. Today — half a century after the first polio vaccine, four decades after declaring war on cancer, 30 years after the emergence of AIDS and the elimination of smallpox — we have tamed the most devious scourges that humanity has ever faced. What threatens us now is managing what should be the “easy” stuff:

  • controlling our diet;
  • exercising;
  • drinking in moderation; and
  • taking our medicines.

But the “easy stuff” is far from easy. In fact, changing such behaviors represent the single biggest opportunity, for all healthcare systems, to improve health outcomes while bringing costs under control. To address the challenge of behavioral change, the epicenter of the health care system — how health care is produced, delivered, consumed and paid for — will need to move beyond the two places in which it has traditionally been delivered, the hospital and doctor’s office. Healthcare as a whole will need to become more patient-centric.

Healthcare organizations now need to transform to an environment that reflects a healthy coaching model in which providers enhance their understanding of the behaviors, needs and preferences of each individual patient and provide patients with increased access to health-related information so they can have greater control over the management of their own health and a clear understanding of what the definition of health really means. But this is not just about patients’ behaviors. Healthcare will also need to be delivered in more dispersed and disaggregated settings – a change making healthcare more sustainable by enabling real-time monitoring, early detection, prevention, self-management and efficient usage of resources. 

Over the next decade, as much as 50% of healthcare will shift from the hospital and clinic to the home and community. New technologies will drive in-home care, at-workplace care and in-car care thereby improving prevention, detection, behavior change and caregiver support. Together, these concepts will lead the healthcare industry through a transformation from disease care to healthcare and reduce the tremendous waste that is endemic within healthcare systems around the world. This transformation will help build the platform to empower patients to manage their own health — to choose preventive actions, engage in real-time monitoring and more. It will help patients understand what health and healthy living means at the individual level as well as the benefits a healthy environment can produce in the near- and long-term. Ultimately, it will create the path needed to build the evidence-based, outcomes-focused, behavior-driven, patient-centric environment required to deliver better care, at a lower cost, in years to come.

As one of the largest providers of healthcare in the world, the Veterans Health Administration (VHA) in the Department of Veterans Affairs is faced with many of the same challenges as other healthcare providers in effecting behavioral change. More specifically, and despite many successful efforts which have improved the quality of and access to healthcare within the VHA — the unprecedented growth in medical workload coupled with legacy policies and processes has made it remarkably difficult to effect behavioral change across the Veteran community. The right technologies, processes, and incentives must be in place to drive both providers and patients to change behaviors. Providers must be provided with the means by which they can transform the current health delivery process to one that incentivizes healthy behaviors, increases preventative education/outreach, and maximizes the ongoing support required to build a sustainable coordinated care system. Moreover, patients must be provided with the tools and information needed, at the right time, to be engaged to more proactively take care of their health.

A paradigm shift is needed to enable the VHA to be able to positively affect behavioral change and in order to begin this paradigm shift we recommend:

Recommendation One: Transform the current business model. The VHA needs to significantly extend their business model to embrace more patient-centric value propositions and enduring relationships with patients (e.g., the healthy coaching model). The future business models within the healthcare industry will be one that is data-centric, behaviorally savvy, experience-focused, holistic and revenue flexible. The importance of the changing business model cannot be overlooked as the pace of change is accelerating, and a fast-follower strategy is not recommended. The VHA will need courageous, curious and skilled change agents to marshal the resources needed for disruptive innovation and stay the course through ensuing failures and uncertainties.

Recommendation Two: Create stakeholder alliances. The VHA must analyze and understand the collective impact of internal and external stakeholders relative to the sustainment of a business model transformation. These stakeholders must be provided with a clear vision, strategy, and understanding of the need for change. By shifting the understanding of stakeholders, collective impact alliances have the ability to reduce or eliminate resistance and allow for more efficient allocation of resources. As non-traditional players enter the healthcare industry and patients are increasingly empowered, collaborations with a wide range of stakeholders can better align interests to address some of the most challenging obstacles to making healthcare sustainable.

Recommendation Three: Focus on changing patient behaviors. Getting patients to adopt healthy behaviors represents a tremendous economic opportunity for the VHA as well as all other healthcare systems around the world. To help patients adopt healthy lifestyles, the VHA should consider utilizing behavioral economics levers through technologies, social networks, gamification and contracts. A number of pilots and start-ups have creatively combined multiple behavioral levers to achieve significant improvements in household savings, drug adherence, weight loss and exercise. To help patient’s process information in areas where there is considerable uncertainty and an overabundance of data, the VHA may consider focusing on communicating in clear and neutral ways and enhance their understanding of individual patient preferences as opposed to any kind of one-size-fits-all approach. The ability to positively influence patient behaviors and create a more preventative health environment can help the VHA manage healthcare in more efficient and cost-effective ways.

Recommendation Four: Customize the Veteran experience. Given the continuously expanding range of individual preferences and needs, it will be increasingly important for the VHA to adopt approaches that customize the Veteran experience. This could include customer segmentation strategies or the development of different products/services for different segments. Mass customization, an approach that has been used successfully in other industries, will be extremely critical for healthcare as the industry continues to rapidly evolve and change over time. The definition of personalized medicine, which has so far focused on customizing drugs based on genetic variation, may need to be expanded to also account for the tremendous variation in individual preferences and behaviors – especially those unique to the Veteran community.

Recommendation Five: Experiment and be flexible. Academic researchers have already made groundbreaking discoveries with relatively modest investments that have saved millions of lives. Healthcare organizations have access to the greatest laboratory of all — their patients. As the VHA develops more patient-centric approaches and builds lifelong relationships with patients, they will have opportunities to truly understand how their patients think. In order for healthcare provides to be able to act on these opportunities, the right processes must be in place. The VHA must provide a means by which providers can directly apply their understanding of each individual patient to treatment plans and/or care packages. Providers must be able and empowered to experiment with their knowledge so that the most effective and optimal treatments can be delivered and the unique needs of our Veterans can be served. 

Healthcare providers around the world are utilizing technologies such as smartphone apps, sensors, remotely connected monitors and social media to empower the patient-consumer and create a more patient-centric environment, especially in remote geographic areas. Meanwhile, payers are embracing holistic approaches, thereby boosting incentives for remote care, home care, preventive monitoring and more to influence healthy behaviors.  

Models, such as accountable care organizations, are also shifting financial risk to providers — who will have to understand patients and influence their behaviors in order to successfully manage this risk. The bottom line is that to remain successful and relevant within the healthcare arena, organizations need to understand how to influence behaviors as success will in part be based on the ability to change the behaviors of patients, providers and the system as a whole – in order to create and sustain an evidence-based, outcomes-focused, behavior-driven, patient-centered environment that maximizes efficiencies, meets current demands, and can absorb future healthcare delivery needs.

Dr. Cristina Beato
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Dr. Cristina Beato is an emergency medicine and family practice physician and part of Ernst & Young’s Government and Public Service (G&PS) practice. Prior to joining Ernst & Young, Dr. Beato served as the Former Deputy Assistant Secretary for Health, Principal Deputy Assistant Secretary for Health, Acting Secretary of Health and Rear Admiral in US Public Health Service Commission Corps who served as the principal advisor on health policy and medical and scientific matters to the Secretary of Health & Human Services.


Aloha McBride
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Aloha McBride is an Executive Director in Ernst & Young’s Government and Public Service (G&PS) practice focusing on federal health and international assistance. In her role, she supports both the Military Health System and Department of Veterans Affairs in delivering strategic planning, program and change management, business process improvement and performance measurement, operational and financial excellence, internal controls and enterprise risk management services.