Opioid addiction afflicts more than 2.6 million Americans. In response, healthcare organizations, policy experts, researchers, and health insurers are increasingly embracing the reality that one of the most promising treatment offerings for opioid addiction relies on human intervention, as well as a prescription. Buprenorphine-based Medication-Assisted Treatment (“MAT”) is showing superior health outcomes to those of other widely available treatment protocols. A large study of buprenorphine-based MAT showed that 44% of patients did not relapse during 24 weeks of observation. While a compliance rate of less than one-half seems lackluster, it is far superior to the compliance rate of the most common form of addiction treatment, commonly referred to as a 10-step program. The increase in human hands needed to treat patients more successfully is costly but, in the long run, a long tent pole in improving health outcomes that sheds light on the future of America’s healthcare labor force.
Unlike many methadone-based treatment plans, buprenorphine-based MAT programs integrate counseling and care coordination into the standard of care. At the turn of the twenty-first century, as the population of Americans addicted to opioids grew, addiction specialists sought to enlist the help of primary care physicians (“PCPs”) in treatment. At that time, PCPs were experiencing declining incomes corresponding to reductions in reimbursement rates. DATA2000 regulations offered PCPs a way to increase their declining incomes if they became certified with little more than one working day of training on buprenorphine-based MAT protocols. The idea took early aim at expanding access to buprenorphine-based treatment. Yet, middle- and upper-middle-class doctors were reluctant to welcome drug addicts into their waiting rooms, and outcomes during the following years taught the healthcare industry that medication alone was insufficient for the treatment of opioid addiction. These lessons triggered a change—including the addition of mandatory counseling—in buprenorphine-based treatment, and top clinics incorporated various elements of care coordination.
Today, large-scale, buprenorphine-based MAT programs offered by companies like CleanSlate adhere to these standards. Other outpatient MAT clinics have gone so far as to add, on top of counseling, primary care clinics and dentistry to their practices. The added care catches costly and preventable conditions early. The data so far indicate that successful treatment using buprenorphine requires more human hands to deliver care to its difficult-to-manage patient population. More proverbial hands on the patient ensure better compliance with the treatment protocol.
Healthcare delivery is time-consuming and inefficient work. The work of repairing the human body, much like the similarly essential work of child-rearing and educating, proves resistant to productivity gains and is not terribly scalable. Economists who subscribe to the theory of cost disease believe that costs, in service areas in which the reduction of labor hours is resistant to productivity gains, are bound to grow at a rate greater than inflation, thereby constraining our ability to control their costs. If you’ve ever wondered why your stylist or barber keeps charging you more each year, cost disease explains it. (If you’re interested in learning more about cost disease and its future impact on healthcare, email Splash 4 (email@example.com) to receive a copy of our upcoming white paper on the topic. In the meantime, keep reading.)
The problem of rising costs in healthcare is explained by the story of America’s shifting labor force. According to a McKinsey study published in 2016, more than half of retail jobs can—and without regulatory intervention likely will—be automated. Parts of Amazon’s visions system for managing retail, Amazon Go, might soon be in your local Whole Foods. Some version of Go is likely to be repurposed and redesigned to support Amazon’s entrance into the pharmacy space, if mail and retail pharmacies are in Amazon’s future. The McKinsey study also states that roughly 60% of the 800 occupations it examined could have more than 30% of job functions automated. Less work for humans in manufacturing, logistics, retail, and sales/marketing will free up American labor to move into healthcare and other cost disease ridden sectors.
At the same time, an American baby boomer is turning 65 every eight seconds. The 2.6 million patients in need of opioid addiction treatment are a drop in the bucket compared to the more than 76 million baby boomers who will need more and more healthcare with each passing year. Furthermore, four of ten Americans live with a chronic illness, according to the National Health Council, meaning that more than 57 million Americans younger than 65 need elevated levels of care and attention.
A cursory look at the literature on patient compliance shows that many patients don’t adhere to “simple” fixes with a daily pill, further underscoring the need for more advanced interventions. Companies like Omada Health are making great strides in leveraging technology to improve patient compliance and outcomes, but the technology is just one leg of the stool. Omada pairs its patients with health coaches and enables its platform to connect users to a peer support network. Omada is used by small segments of patients who are diabetic, pre-diabetic, or at risk for heart disease.
The limited market share served by companies like Omada Health leaves an estimated $470 billion of unpaid care to be delivered by 40 million family members and friends. That means 40 million volunteer care coordinators and caregivers are allocating hours away from learning new skills, working for their current employers, or searching for new employment. More and more care is needed in the home, yet there are limits on the supply of unpaid care. Either those hours are capped, or they pose a threat to companies that depend upon conspicuous consumption when volunteer caregivers forego income. Here is yet another reason to short Blue Apron stock and a further tentpole explanation of Amazon’s test pilots in the healthcare sector.
Successful behavior change, care coordination, and patient compliance simply are body-based propositions. Pockets of American healthcare have embraced this, but far greater pockets rely on a patchwork of solutions managed by patients and their families. The most successful MAT programs Splash 4 has encountered make use of a greater number of touchpoints between patients and caregivers, providing one rough roadmap to a future of healthcare costs. Health insurers are paying significant reimbursement rates in many areas of the country most afflicted by opioid addiction in order to expand and ensure a sufficient supply of MAT providers. Following the standard pattern of reimbursements, as sufficient supply is onboarded, rates will eventually come down. As they do, the need for a body-based approach to treatment won’t go away.
Whether in treating addiction, managing chronic illness, or providing end-of-life care, the human element will play an increasing role in healthcare. This stands in stark contrast to the style of care our nation has opted for and actively built, volume-based care, primarily paid for on a fee for service basis. Not surprising for a country’s whose prominence was forged in large part thanks to industrialization. Technologies from the digital revolution, like telemedicine, algorithmic scheduling, and remote telemetry applications will prove to be valuable in select segments of volume-based care, to be sure. Healthcare technology applications alone, though, likely will not provide the productivity gains historically seen in manufacturing and supply chain management. The labor component is just too sticky and life savings interventions ultimately add to the aggregate demand for healthcare services.
A probable future of healthcare looks a lot like banking in the ATM era—more jobs, mostly lower-paying jobs, and a proliferation of points of service delivery. Banking giants predominately chose to chase scale and diluted service in that pursuit. We are all along for the ride to see what quality levels and fee structure healthcare providers, payors, and employers collectively and individually choose. Based on the theory of cost disease, humans are the batteries not yet included in the market of healthcare IT solutions but coming to market in the future. Although, the jump ball questions are what parts of the growing labor bill will third-party providers cover and at what rate?
To some extent, the increase in humans in healthcare is already underway. The number of healthcare call and operation centers is on the rise, home health remains one of the fastest growing industries, and the number of medical scribes more than doubled between 2014 and 2016. Healthcare’s tooth-to-tail ratio is increasing, giving life to new jobs alongside improvements in care and hopes for cost savings. Yet costs continue to rise. Successful MAT treatment programs might afford a preview of future U.S. healthcare and its labor pool. The question for MAT clinics that provide more human touchpoints in delivering care remains how much and how long the system will pay to obtain superior but not perfect outcomes. This allegory will extend far into other segments of care delivery in the coming years and is being debated every time one hears the phrase value based care.
 S4P research and analysis.
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 S4P research and analysis.