HFMA Annual: Finance Leaders Need to Change the Culture of Medicine

November 09, 2021 - Healthcare finance leaders can help to fix a broken healthcare system—one in which costs are high and outcomes are poor—by changing the culture of medicine, according to Robert Pearl, MD, Stanford University professor, Forbes contributor, and former CEO of Kaiser Permanente’s the Permanente Medical Group.

Medicine already has an established culture, but rules have changed during the COVID-19 pandemic, Pearl explained at the 2021 HFMA Annual Conference.

“During a time of change, rules become different,” Pearl said. “By rules, I mean the normative rules, like how we act and how we are expected to behave.”

As an example, Pearl pointed to the work from home movement during the pandemic. How employees perform their jobs may be forever changed by the sudden shift to remote operations. In healthcare, in particular, a 2020 survey found 75 percent of large hospitals and health systems are considering making revenue cycle management changes, including permanent work-from-home positions.

With the emergence of new normative rules—the role of technology in clinical care and shifting patient needs, in particular—healthcare finance leaders face a major challenge and opportunity.

READ MORE: How COVID-19 Imperiled Physician Practices, And How to Save Them

“Coming out of COVID, the world will be different and you, as finance leaders of the American healthcare system, need to be thinking about what they will be,” Pearl stated. “What rules do we need to keep? What rules do we need to change?”

This work will involve examining the established culture of medicine and taking a different perspective to not only reduce costs but also improve patient outcomes, Pearl stated.

The role of telehealth in tomorrow’s care

The biggest rule coming out of this period of significant change in healthcare is technology, specifically the role of technology in clinical care, according to Pearl.

Telehealth utilization skyrocketed during the COVID-19 pandemic when patients could not access providers because of shelter-in-place orders and the fear of catching or spreading the virus. Utilization rates increased to 60 percent to 70 percent at the height of the pandemic despite suffering from extreme lows of around 2 percent of business prior to the pandemic, Pearl said.

What caused this massive uptick in telehealth utilization during the pandemic? Relaxation of licensing restrictions, acceptance of certain applications like FaceTime, and Medicare reimbursement for telehealth visits are all answers to this question.

READ MORE: For Healthcare Financial Transformation, Cultural Change is Key

However, Pearl challenged what he called “systemic reasons,” pointing to the fact that telehealth utilization rates dropped as in-person care resumed despite ongoing reimbursement and regulatory flexibilities.

The culture of medicine explains this shift, Pearl elaborated. “Because of the culture of medicine, the physician loves the office.”

Pearl countered that Kaiser Permanente was doing 12 million virtual visits a year during his tenure at the organization, which was over seven years ago. However, the culture of medicine at the health system was different.

“A culture that Kaiser Permanente came out of is an integrated, capitated, technologically-enabled system as opposed to the culture that happens in American medicine more broadly,” Pearl said. The broader culture, he mentions, refers to the world of fee-for-service and the engrained idea that specialists are higher on healthcare’s hierarchy than internists or primary care clinicians.

Shifting how leaders think about healthcare can boost telehealth utilization in the post-pandemic era. This shift can help to improve access to care—telehealth services can be accessed after 5:00 PM—and lower costs since the technology can be delivered at a lower cost compared to an office visit and can prevent unnecessary, expensive emergency department visits.

Downward pressure on costs in a post-pandemic era

READ MORE: How a Cultural Transformation Can Advance Patient Safety

The economy will continue to suffer from the effects of the COVID-19 pandemic, according to Pearl. For healthcare finance leaders, this means more Medicaid and uninsured patients since businesses will have to make tough decisions in order to stay open.

“We're going to experience tremendous downward pressure on prices,” Pearl predicted. “The economy has always lifted people up to allow them to pay that 5 to 6 percent a year [that healthcare spending has increased]. I think this time will be different.”

Pearl said that reduced prices for healthcare could come from several areas, including venture-backed virtual primary care companies and hospitals moving care into the home. Healthcare purchasers are also likely to come together to create lower cost networks that leverage telehealth and other technologies for reduced costs.

“We know the things that can work. We still have to figure out how to make them happen,” Pearl stated.

Shifting the culture of medicine will be necessary. Physicians, for example, will have to let go of the idea that in-person care is the gold standard. The healthcare industry will have to take specialists off the pedestal and understand that internists and primary care physicians add value to the healthcare system. Organizations will need to acknowledge that health inequities exist within their care delivery systems. Even the fee-for-service system will have to change in order to improve patient outcomes and reduce costs.

“That change happening will be difficult,” Pearl acknowledged. Physicians and healthcare leaders may move through the five stages of grief for the traditional culture of medicine, but eventually there will be acceptance, he concluded.