Mike Leavitt is the founder of Leavitt Partners, where he helps clients navigate the future as they transition to new and better models of health care. In previous roles, Leavitt served in the Cabinet of President George W. Bush (as Administrator of the Environmental Protection Agency and Secretary of Health and Human Services) and as a three-time elected governor of Utah. He is the Keynote Speaker at 2019 Annual Innovation Showcase on March 21.
The theme of this year’s Showcase is “Using Data to Drive Value Innovation.” As the former Secretary of Health and Human Services and as a three-time elected governor of Utah, what does that mean to you?
We’re entering a new frontier of innovation. In the past, we’ve seen innovation as a new chemical or new device or some form of new care model, a CMS billing number and an FDA approval — and if you had those things, you were in the innovation business. In the future, you’ll need to have something else and that’s a value proposition. You will have to be able to demonstrate in a value-based world that the product or service that you’re offering will provide better care at a lower price. The construction of a value proposition is the new frontier in innovation in healthcare. So to me, what it means is that I have to make my case with data. I have to demonstrate that this innovation will change the cost curve.
You founded Leavitt Partners to help clients such as payers, providers, and government navigate the future as they transition to new and better models of care. What do you see as opportunity hot spots?
The primary skillset can be defined as collaborative IQ. In the past, payers and providers and even the government have viewed healthcare as a negotiation to see who could get the best rate or the highest rate or the lowest rate, depending on your perspective. In the future, the hotspots are going to be developed by those who have the ability to align interests — as opposed to a win or lose negotiation. We have learned over time how to make computers talk to each other. We still have work to do in learning to get people to work collaboratively. Aligning incentives requires collaborative IQ.
How do you see healthcare IT and interoperability improving and disrupting the healthcare system, let’s say over the next five years?
The last month, the Centers for Medicare and Medicaid Services released a new proposed rule that revolutionizes the way we manage Information Technology. CMS is saying we’re going to liberate the data. There are a series of rules that those who are managing patients will be required to use and that would fundamentally change the way patients interact with their medical information. Anyone who is in the health IT business or has any interest in interoperability should closely study the new rule. There’s a lot of work still to do before it begins to be implemented, but behind it all is this change in philosophy. The idea is to liberate the data and let the power of patients using their health care information in standardized ways begin to reshape the landscape.
You have overseen the implementation of large-scale programs such as the Medicare Part D prescription drug program. What kind of innovation in government and healthcare was needed to make that successful?
In the past, Medicare has been one-size-fits-all. In rolling out Medicare Part D, a new benefit to 43 million people, a decision was made that we would create basic requirements for plans, but then let plans deliver what consumers wanted — and then let the power of consumerism drive what was ultimately adopted. So consumers now choose from a series of prescription drug plans, all of which meet federal requirements. But they’re able to choose a plan that meets their needs. It unleashed the power of consumerism and it’s impacted an entire generation of healthcare consumers. It is among the only benefits like this in history that has actually been less expensive than forecast and that people like. You might be curious to know that the default government plan (if people did not choose a plan) attracted just six percent of people. So something the government created just six percent was happy with; 94 percent wanted something different. … I think a big part of the future is the power of consumerism.
At the Innovation Showcase, there will be many health care companies committed to innovation. What is your advice to them?
I think I go back to the first question. They need to learn to construct a value proposition. A proposition that uses data to demonstrate in a replicable way the ability to drive costs down and improve care. That’s how we now define value. Data will be required to demonstrate that you have a value proposition, payers are more and more saying, “I see you have a chemical or a device or a care protocol. Show me that if I make that expenditure that somehow it’s going to improve care and do it at a lower cost.” That is the formula that the future will depend on.