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An eye on the consumer: Healthcare systems focus on value to scale and invest

How Dignity Health approaches investments in healthcare IT

The healthcare system is moving toward consumer-based care and providing greater value to patients. This focus will likely influence the investment strategies of healthcare payers and providers.

Rich Roth, chief strategic innovation officer for Dignity Health, the fifth-largest health system in the United States and the largest hospital provider in California, will speak at a panel called “Factors Influencing the Future of Healthcare Investment” at the upcoming HLTH conference on May 6. Roth, who co-manages Dignity Health’s venture fund, spoke to Health Data Management about investment trends in consumer-focused care. An edited version of the interview follows.

HDM: How do you approach investment in healthcare IT innovation at Dignity Health?

Roth: I spend a lot of my time on our open innovation program, in which we work with early stage companies to test and and scale their solutions to create impact in an environment where we're focused on performance metrics. We make sure that those measures of performance are achieved to scale.

HDM: What are some digital health companies you’ve worked with and what was your criteria for investing in them?

Roth: We started out early in clinical trials with Propeller Health, a digital platform for managing asthma and COPD, and did the largest digital health round in the country with them. Wildflower Health is another great company that does fascinating work for mothers and children on Medicaid and connecting them with services and providing prevention. We have a strategic lens and we understand that the work is with real patients, physicians, nurses and caregivers and so when we find that we're working with something in which we have a great partnership with a VC firm, we invest. That's when the trigger hits for us, when we're working with somebody and when we believe we're going to scale it.

HDM: Tell us about Dignity Health’s Run, Run Jump philosophy. What does that entail?

Roth: This was somewhat modeled after a children’s swimming class. When you're learning to swim, one methodology a swim instructor uses is to run on top of the kickboards so you're not in the water. When you’re feeling safe, you eventually jump in the water. So we've come up with a three-stage process where in a first run is how we test an emerging company. Ultimately if we can pass through two runs, we take companies hopefully to overall scale and greater impact.

HDM: What are some roadblocks payers and providers are facing as they invest in technology?

Roth: The systems build up in a way that somewhat creates antagonistic relationships between providers and payers, different types of providers, one another, and so I think there's been a lot of friction. There are processes where unhelpful things have been developed that separate those respective pieces of the organization for historic reasons but not for the benefit of the patient.

So I think we need to get to an area with greater mobile technology where you can self-schedule or where the system knows you and registers you ahead of time, retains your information and then works with the payers who also know the patient is seeing you and knows who the patient is. A lot of that process becomes stressful for patients, and we're really looking at where we can remove friction in the delivery system internally also between us and our partners in the healthcare ecosystem. That's just a really big thing for us right now.

HDM: Looking forward to the future, where do you see investments in consumer-focused care going?

Roth: I think the most exciting thing we’re seeing is subscriptions. You have your Netflix subscription, you have a Costco subscription, you have your MoviePass if you do that. I think what we’re going to see is healthcare as a subscription offered by first primary care providers and then maybe health systems at large.

HDM: That's interesting. So how would that work to have healthcare as more like a Uber or a Netflix model?

Roth: A really interesting request for information came out from CMS looking at how CMS might incentivize the payment for direct-to-provider care through memberships. I think One Medical has a membership model. That's one example in healthcare; it's not for everyone. My hope is that we can change the payment model of healthcare so that prevention and the ability to address social barriers and the digital divide are supported by the financing system.

Sometimes when they come in at a higher cost care setting like the emergency room, you didn't have an opportunity to intervene ahead of time. That's why I think I like this subscription concept, which is maybe in its very early stages, but I think it's a trend we really need to watch.

HDM: What are you looking to focus on in value-based care going forward?

Roth: It's the ability for us to take care of the cost and quality of patients up to 90 days after discharge so we’re able to follow the patient into their homes and in some cases use monitoring technologies.

We've actually demonstrated a significant ability to reduce the cost of healthcare, keep people in their homes and reduce the length of hospital stays. There's a lot of fee-for-service in healthcare and more and more value-based work we do and bundled payments. Our work with naviHealth, a connected-care service that focuses on real outcomes, is a great example of it. We’re working more to build a system so that we can take care of people holistically.

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