Healthcare’s Two Biggest Problems Going Into 2016: No Sugar Added

Healthcare’s natural evolution from a fee-for-service to value-based outcome models will remain out of reach, until interoperability and payment reform are removed as barriers to provide patient care.



Overall, it’s widely accepted that the Health Information Technology for Economic and Clinical Health (HITECH) Act, as a policy was a success. It’s not surprising when the percentage of US Hospitals using digital records skyrocketed from 9.4% to 75.5% between 2008 and 2014, according to a recent brief by the Office of the National Coordinator for Health Information Technology. However, as we include the patient experience into the definition of success, perspectives change. For example, you have a simple annual checkup at your primary care physician locally, and then a week later you travel to a neighboring town and end up in the hospital. The hospital doesn’t have any record of your recent visit a week ago, no access to labs, and won’t even know to ask unless you mention it. Is it an effective meaningful use application? The primary challenge continues to be that providers and payers are not accountable for interoperability under HITECH. The result is a fragmented national healthcare that only hurts the patients we’re trying to help. HITECH was a significant investment with a staggering $35 billion committed for the program, according to Robert A. Sunshine, Acting Director Congressional Budget Office (CBO) in his response to Charles B. Rangel, U.S. House of Representatives, Chairman for the Committee on Ways and Means. The program initially committed to savings from Medicaid and Medicare of $12.0 billion between 2011 – 2019. Have the US consumers and patients realized that savings? Why of course not, there is limited interoperability when making clinical decisions with existing EMR technologies.


Interoperability is a monumental challenge that is rarely discussed nationally, and this critical issue needs to be confronted before costs are driven down opening access and allowing providers to explore models for improved quality in patient care.


Payment Reform

The method healthcare providers are paid must be changed from a fee-for-service payment system. Without heavy healthcare payment reform, the realization of better access to higher quality care at lower costs, will not happen. Payers won’t do it. Providers won’t do it. We as patients must spearhead this change. Otherwise, we’ll be passing the burden to the next generation.


The Center for Healthcare Quality and Payment Reform identified ten major barriers of healthcare payment reform 1. Continued use of fee-for-service payment models, 2. Expecting providers to be responsible for costs they cannot control, 3. Physical compensation based on volume not value, 4. Lack of data for setting payment amounts, 5. Lack of patient engagement, 6. Inadequate measures 7. Lack of alignment among payers, 8. Negative impacts on hospitals (inefficiencies), 9. Policies favoring large provider organizations, and 10. Lack of neutral convening and coordination mechanisms. These issues are complex and will require payers, providers and patients all working together for a healthier tomorrow. This realization will be nearly impossible without payment reform considering we have a payment system incented not to keep patients healthy and a dis-coordinated delivery system at the patient level.


In an effort to push down costs, consumers are demanding price transparency. Will healthcare transparency reduce costs? It sounds like it should. Price transparency protects consumers from unfair pricing, and helps to determine the true product evaluation, while building consumer trust. Empowering consumers with price allows, consumers make decisions based on cost and quality information, before care is obtained not after. Better decisions do save money. West Health Policy Institute’s latest analysis indicated, that price transparency could cut $100 billion over 10 years from health spending. However, there can be adverse effects of price transparency, and according to the Health Care Cost Institute, in markets where pricing is very transparent, pricing narrows and the average cost rises. As employers force consumers toward contribution models, selections become difficult and price transparency may not be the single solution. Price transparency creates behavior changes in employees and also in employers.


We can only hope the behavior changes in employers soon start to favor the employee.




HTA. (2015). Using The PCAT Formula During Conversational Hypnosis To Solve Problems (online image). Retrieved November 15, 2015, from


Peter Nichol, empowers organizations to think different for different results. You can follow Peter on Twitter or on his blog. Peter can be reached at pnichol [dot]

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Peter is a technology executive with over 20 years of experience, dedicated to driving innovation, digital transformation, leadership, and data in business. He helps organizations connect strategy to execution to maximize company performance. He has been recognized for Digital Innovation by CIO 100, MIT Sloan, Computerworld, and the Project Management Institute. As Managing Director at OROCA Innovations, Peter leads the CXO advisory services practice, driving digital strategies. Peter was honored as an MIT Sloan CIO Leadership Award Finalist in 2015 and is a regular contributor to on innovation. Peter has led businesses through complex changes, including the adoption of data-first approaches for portfolio management, lean six sigma for operational excellence, departmental transformations, process improvements, maximizing team performance, designing new IT operating models, digitizing platforms, leading large-scale mission-critical technology deployments, product management, agile methodologies, and building high-performance teams. As Chief Information Officer, Peter was responsible for Connecticut’s Health Insurance Exchange’s (HIX) industry-leading digital platform transforming consumerism and retail-oriented services for the health insurance industry. Peter championed the Connecticut marketplace digital implementation with a transformational cloud-based SaaS platform and mobile application recognized as a 2014 PMI Project of the Year Award finalist, CIO 100, and awards for best digital services, API, and platform. He also received a lifetime achievement award for leadership and digital transformation, honored as a 2016 Computerworld Premier 100 IT Leader. Peter is the author of Learning Intelligence: Expand Thinking. Absorb Alternative. Unlock Possibilities (2017), which Marshall Goldsmith, author of the New York Times No. 1 bestseller Triggers, calls "a must-read for any leader wanting to compete in the innovation-powered landscape of today." Peter also authored The Power of Blockchain for Healthcare: How Blockchain Will Ignite The Future of Healthcare (2017), the first book to explore the vast opportunities for blockchain to transform the patient experience. Peter has a B.S. in C.I.S from Bentley University and an MBA from Quinnipiac University, where he graduated Summa Cum Laude. He earned his PMP® in 2001 and is a certified Six Sigma Master Black Belt, Masters in Business Relationship Management (MBRM) and Certified Scrum Master. As a Commercial Rated Aviation Pilot and Master Scuba Diver, Peter understands first hand, how to anticipate change and lead boldly.