Rx for growth | Most new jobs will be in health care, but many will deliver information, not treatment
Photo/Courtesy Health Dialog
"We're uniquely positioned to be part of the solution to rapidly rising health care costs, and profit from those solutions, too." David Wennberg, founding partner of Health Dialog
Photo/Courtesy Athena Health
"If I had time, I could sell a million CEOs on what I did in Maine." Jonathan Bush, athenahealth CEO
Since the start of the recession in December 2007, the only industry that has seen job gains is health care. In fact, over the past 10 years, health care has added more jobs than the next 10 industries combined. The Maine economy could well sing a version of the old song, “If it weren’t for bad luck, I’d have no luck at all” about health care. And the future, if we’re lucky, looks much the same. The Consensus Economic Forecasting Commission’s most recent forecast calls for health care to lead Maine out of the recession by creating 10,000 more jobs by 2013. Paul Leparulo, senior research analyst from the Maine Department of Labor, says that over the next decade, “nearly one out of every three new jobs, and 20 of the 40 fastest-growing occupations, are expected to be health care occupations.”
“The potential for job growth is certainly high,” says Steven Michaud, president of the Maine Hospital Association. “The demand for health care is high now and growing every day. We have an aging population who need more services. Every one of our 39 member hospitals would like to employ more people. The problem is how to pay for them.”
And therein lies the dilemma. Growth in demand has led to higher costs and thus to rising insurance premiums, rising payroll taxes, growing pressure on state, federal, business and household budgets and a general public outcry for some sort of reform. And as that reform inevitably targets Medicare and Medicaid, it puts projected employment growth at risk. “We are essentially a service provider,” says Jud Knox, president of York Hospital. “People expect, indeed demand, that their health care involve face-to-face encounters with providers.” That means more people and therefore more cost. “In addition,” added Knox, “that’s how the system pays for health care — we bill and are paid for face-to-face encounters.”
This inherent conflict between the face-to-face, labor-intensive nature of the current health care service and payment system on the one hand and the need to control costs on the other has given rise to an entirely new type of health care business, one that holds great promise for growing employment in Maine. These businesses are neither hospitals nor direct providers. They’re information generators. Their workers aren’t doctors and nurses but statisticians, analysts and computer programmers. And their growth is driven not by local demographics and federal dollars, but by larger trends in the way health care services are delivered and paid for. These companies specialize in information and technology. In contrast to traditional health care companies, they see pressures to curb costs as a business opportunity. And, most importantly for the Maine employment picture, their markets are not local, but global.
And they’re poised to grow.
Take Health Dialog — 250-plus analysts, programmers, statisticians and health coaches in the Portland office. Their mission, and how they make their money, is by reducing “unwarranted variation” in the health care system; that is, by reducing services that don’t add value. By poring over reams of data, their analysts identify and reach out to patients who need help navigating the maze of disjointed health care providers who may not have incentives or capacity to coordinate care.
Health Dialog’s clients are health insurance companies and large employers who self-insure their employees. Clients pay Health Dialog a set fee per member per month in exchange for a variety of disease management and wellness programs. These programs help members proactively stay healthy by managing their own health conditions, often chronic diseases. Through things like exercise or staying on their medications, members use the health care system more efficiently, which provides savings for Health Dialog’s clients.
“Information, service and costs are intricately entwined,” says David Wennberg, one of the firm’s founding partners. “We’re uniquely positioned to be part of the solution to rapidly rising health care costs, and profit from those solutions, too.”
There are indirect economic benefits from sharing and analyzing information, too. The assumption is if Maine people and businesses spend less on health care, some of those savings will be reinvested into the Maine economy. Health information exchanges — which share data across organizations, providers and regions — have found a proving ground in Maine, one of only three states with an operational, fully secure information exchange, which went live this summer. Already, over half of Maine residents are included in HealthInfoNet. “The promise of electronic health data that can be shared and analyzed is that it will streamline the delivery of services, reduce redundancy and medical errors, resulting in cost savings and higher quality of care,” says Trish Riley, director of the Governor’s Office of Health Policy and Finance.
Athenahealth, located in Belfast, is another example of a company leveraging information and technology to help health care providers become more efficient. The company provides online billing and practice management services for health care providers across the country. “Maine has been a great success for us,” says athenahealth CEO Jonathan Bush. “Ten years ago our initial claim denial rate was 30%. Today, we’ve reduced that to 5%.” Bush says athena’s success in Maine is the result of three qualities that its labor force in Belfast has in spades: “self-sufficiency, empathy and ingenuity.” The daily struggle to reconcile the myriad rules of government and insurance billing procedures with the particular nature of face-to-face encounters in Utah, or Seattle, or wherever athenahealth’s clients happen to be, seems to be a task at which Mainers excel. “Our workers in Maine are better at this than those in Boston or in India,” says Bush. “If I had time,” he added, “I could sell a million CEOs on what I did in Maine.”
High praise for Maine’s potential for thriving in the age of health care reform, but what needs to happen to realize this potential? What are the challenges to growing this non-traditional sector of the health care economy?
Finding the right carrots
There are three big ones, according to the subjects we interviewed: finding a skilled work force, keeping up with cutting-edge technology and aggressive business recruitment. The Maine Hospital Association helps recruit the workers, and here the pay is not an issue. By and large, Maine hospitals have to pay whatever the eastern Massachusetts/New Hampshire market requires, says Michaud. The problems are jobs for spouses and time commitments. Physicians today are less likely to be willing to be on call two or three weekends per month and to fill in for others as much as they did in the past. We need more bodies to cover the same level of care today than we did a generation ago, says Michaud.
For the emerging health care information industry, finding workers with the right skills is the key. “We need people who have both a clinical and technology background. That’s a tough combination,” says Riley. Health Dialog addresses this with an extensive training program — Health Dialog University — that supports internal trainings and external certification courses for things like Oracle database skills and health care management.
Health Dialog recruits about half of its employees from out of state. Here, Maine’s quality of place can help. “We’re competing on a national level for workers. Portland can be a draw,” says Wennberg.
Continual investments in technological infrastructure are also key. “Not only do we need to keep the skills of our workers up to date, but we also need to have cutting- edge hardware and software to support them,” says Jeff Stoddard, a manager of data operations at Health Dialog. With information exchanges, Riley notes, high levels of data security are paramount, which requires sophisticated technology.
But technological infrastructure is more than just hardware and software. At heart, it’s about how data flows. Stoddard notes that there are standards to help data flow smoothly from providers to insurance companies, but getting that data to companies that can analyze it, like Health Dialog, is much more difficult. Information exchanges have so far been focused on sharing data among providers. But, if they are adopted widely, they may make it easier for information companies to obtain and add value to their clients’ health information. “Timely, available data is key, both for our business model and in order to positively affect patient outcomes,” Stoddard says.
Finally, Maine needs to do a better job of identifying businesses like Health Dialog and athenahealth and recruiting them to come to Maine. Athenahealth didn’t need workers with Ph.D.s and post-doctoral experience, at least not in Maine, says Bush. They recruit those workers for their R&D center in Watertown, Mass. But they and companies like them do need people with human skills that can’t be outsourced to China or India.
Maine, with its available work force, can be competitive in the hunt for such businesses. This could represent extraordinary opportunities for Maine’s rural communities, where health care providers are frequently the largest employer. Other seemingly unrelated economic development strategies also depend critically on the presence of high-quality health care providers. ”The presence of a viable, nearby hospital is one of the things businesses considering locating in Maine call us about regularly,” says Michaud.
Here too, information sharing and technology targeted to cut costs and improve services may help. Tele-health technology allows specialists to see, diagnose and treat patients from remote locations. This lets rural hospitals share services with other hospitals that may be too expensive or specialized to have on their own. “They won’t need to duplicate expensive equipment or have on staff every type of specialist,” notes Riley. This is good for the economy — it makes health care delivery more efficient and, equally important, it enables businesses and people to locate in places they might not otherwise.
Over the past few decades, technology and demographics have fueled job growth in health care by increasing demand for medical services. And this no doubt will continue. But today, the health care industry must temper increasing demand with smarter, more cost-effective and efficient service delivery. This, too, can be a business opportunity and a catalyst for economic development in Maine.
Michael LeVert, Maine state economist, and Chuck Lawton, chief economist with Planning Decisions, a South Portland-based consulting firm, are collaborating on Working Knowledge, a six-part series exploring what Maine’s biggest industries need to prosper. Part IV will take a look at tourism.
Read Part I: Setting the stage
Read Part II: Paper goods
Most Recent
Most Recent
Comments