At the heart of the American Healthcare System lies a dichotomy: Hospitals need to be profitable, yet they are intimately tied to public health - a rather altruistic arena.
A decade ago, George Halvoron, then-CEO and Chairman of Kaiser Permanente, spoke of the challenge in these terms: “American Healthcare reform needs to achieve coverage for everyone, cost improvement, care improvement and health improvement. […] Care and coverage improvement need to precede cost improvement”.
A decade later, hospitals are facing the same dilemma, and they are tackling it with out of-the-box thinking. Case in point: In May this year, Kaiser Permanente committed $200 Million towards housing solutions for the population in need.
This health network has identified the weakest link: social determinants. As a result, it has made a business case for an atypical investment. Interventions such as these make it possible for low-income individuals to raise their adherence to treatment, an important factor in the effectiveness of long-term therapies for illnesses (ex. type II diabetes, depression and blood pressure) – and one heavily affected by social inequality. As Marc Boutin, CEO of the National Health Council expresses: " How are we surprised that people aren't compliant and adherent when they don't have food, and a place to live? ".
Adding to the already conflicting prerogatives of financial viability and service to the community, commitments towards health for all come with a lot of uncertainty. Andy McCulloch, President of the Kaiser Foundation Health Plan/Hospitals, explains: “Subsidies [are uncertain]; Oregon and Washington are both Medicare states, [therefore, we] have a lot of uncertainty regarding whether the support will continue or not. Until there is some clear message from the administration, our planning in regards to filing rates in 2018 is still up in the air”.
In such a climate, social innovation will indeed need to look to new business models and holistic ways of tackling the issues in order to succeed.
on your iPhone or Android to listen to the complementary episode on :
Strategic Altruism in the Healthcare Ecosystem