One of the greatest challenges to healthcare transformation is the lack of financial incentives, and this barrier has only been exacerbated by the events of the past year.
Health systems see razor thin profit. A 2018 study showed average margins that failed to break 2%, and that was before the coronavirus pandemic wreaked financial havoc on hospitals. That means that a health system bringing in a billion dollars of revenue only sees about 17 million in profits — and that’s not a lot to risk on new solutions that don’t have an immediate and direct impact on ROI.
Those thin margins encourage the change-averse culture of hospitals, particularly from providers who have been inculcated with the paranoia of medical malpractice. Couple that with the challenges of integration, interoperability, and data exchange — and the fact that healthcare innovators are delivering an experience that has non-negotiable outcomes, which makes tailoring to the consumer extremely difficult — and you have an industry with unusually strong barriers to digital transformation.
Payer coverage for digital health tools is one creative avenue for easing these barriers and accelerating adoption. But while Babyscripts and others have started to engage the payer community to subsidize the cost of technology for their members, the change is slow.
This is where lobbying comes in. Engaging policy-makers can go a long way toward driving payer buy-in through expanding reimbursement codes, and healthcare innovators and other industry stakeholders should be tapping into its potential — cost should never be a reason that a patient doesn’t get the care he or she needs.
Our current moment is especially ripe for lobbying. Loosened restrictions and regulations due to Covid — and the demonstrated effectiveness of digital tools during the pandemic — have created the momentum to spur policy-makers to make permanent changes to reimbursement codes.
The word “lobbying” can bring to mind smoke-filled rooms, giant corporations with a lot of weight to throw around, Big Oil, Big Tech, Big Big. But this is a misrepresentation of the process — lobbying isn’t just for major corporations — startups can and should have a voice in advocacy. Here’s some guidance on what successful lobbying looks like in practice:
It’s not as intimidating as it sounds. Every state or city government has a health committee, and you can meet with this committee. In many ways, lobbying is just like an enterprise sales pitch. You need to convince the majority, and gain critical consensus. Staffers are a great place to start — they have a great deal of influence and their job is to seek out new initiatives. Bringing your solution to their attention is a way to get it past the front door.
Educate people at the local level. In our most recent foray into lobbying with the DC Council (stay tuned for the exciting results, released next week!), it was immediately apparent that most of the council didn’t know that technologies like Babyscripts existed. It’s essential to educate and engage people at the local level — this is your expertise, not theirs. Policy-makers are looking to put forward new solutions, but they need to be made aware of what is out there.
It has to be greater than you. Healthcare is complicated. Anyone who is in the field knows that if you’re in it for the money, you won’t get far. The complexity of the healthcare system will break you if you're just out to disrupt, grow your company, sell it and get out. Healthcare innovation is not about revolutionizing delivery of care, it’s about changing outcomes — and that means that it’s not just about getting your own solution through the door. It’s opening the path for competitors as well, because the point is changing lives.
Learn more: view each state's efforts to extend Medicaid coverage to postpartum women.
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