GETTING DOCTORS BACK IN THE DRIVER’S SEAT: BAIN & COMPANY’S THIRD FRONT LINE OF HEALTHCARE REPORTS FINDS CARE MANAGEMENT DECISIONS SHIFTING BACK TO PHYSICIANS

Without hard evidence that new healthcare models improve patient outcomes, physicians see little reason to alter the status quo, posing a significant hurdle to future industry progress

New York – May 11, 2017 – The revolution that has yet to materialize: value-based care was expected to take off everywhere, but progress has slowed and in some cases plateaued over the last two years as physicians increasingly push for evidence that this change is worth the required effort and will improve clinical outcomes. Without it, they see little reason to alter the status quo. In its third Front Line of Healthcare report, Bain & Company, together with Research Now Group, found that bringing physicians back into the decision-making process helps create greater momentum for change, and physicians are eager to assume a more hands-on role in identifying a healthcare model that will help them balance costs and patient care.

After years of experimentation, physicians have become more cautious about adopting new structures and are particularly hesitant to embrace new systems when the clinical implications and the return on investment are unproven and the administrative burden significant. Based on survey results from nearly 1,000 U.S. physicians across eight specialties, 100 finance officers and 100 procurement officers, Bain found that more than 60 percent of doctors believe it will be more difficult to deliver high-quality care in the next two years as they struggle to cope with complex regulations, an increasing administrative burden and frustration with electronic medical records.

Following five years of rapid experimentation and change, these disruptive transitions have slowed the healthcare industry’s ability to curb spiraling costs and improve care. In response, all sectors of the industry are rethinking their strategies to address these challenges, often resulting in a significantly altered and challenging environment that can inhibit physicians’ ability to care for and treat patients.

“For many years, doctors were passive players as healthcare administrators, executives and even policymakers failed to involve them in decisions about whether and how alternative models might impact their ability to treat patients,” said Tim van Biesen, who leads Bain’s Healthcare Practice in the Americas. “Changes were done to them, not enacted with them. Unless the industry is able to crack the code on how to give physicians a seat at the table, further progress will almost certainly stall.” Bain’s research reveals that more than 70 percent of physicians prefer fee-for-service payment versus value-based care payment models, even though they recognize the former is more expensive. This preference demonstrates that financial logic alone is not enough to foster physician support. Physicians are unwilling to change until it is clear that these models deliver the same or better clinical outcomes.

Healthcare organizations on the forefront of change are bridging this gap, taking steps to re-empower physicians by recognizing the critical role they play in managing costs and gaining their buy-in to support the move to a value-based model. These organizations have realized that empowerment creates a virtuous circle: physicians engaged in decision-making are more likely to promote their organizations and to be aligned with their missions, likely leading to better care and outcomes.

Medtech procurement is the best example of this alignment. The move to re-empower physicians in the procurement process reverses a 10-year trend that had shifted decision-making away from doctors and toward procurement professionals who chose products mainly on the basis of price, rather than patient outcomes, often putting the two groups at odds. Now, more than 80 percent of practices said surgeons and procurement make decisions jointly, weighing clinical and economic value together. Further, 85 percent of surgeons now agree that procurement has a neutral or positive impact on cost and quality. While product quality and patient outcomes continue to rank as the top criteria in purchasing decisions, the most successful companies demonstrate economic value as well: a full 70 percent of surgeons surveyed believe “best value for price paid” is important – a significant increase from two years ago. In this environment, medtech companies can improve on their competitive standing by building category leadership positions in a crowded field and offering value-added services.

In contrast, nonsurgical physicians continue to feel their behavior is constrained by payer and other restrictions, most acutely in prescribing drugs: only 19 percent believe they can rely on pharmacy benefit managers (PBMs) to improve costs and quality of care. Yet, more than half of the doctors surveyed – including nearly 80 percent of cardiologists and primary care physicians – say they feel an increased responsibility to help control pharmaceutical prices, particularly their patients’ out-of-pocket costs. Physicians suggest the most effective approaches to lowering drug prices would be to improve price transparency and facilitate increased competition among pharma manufacturers.

“Doctors are steeped in a field that requires lifelong learning, so of course they are wary of new, unproven approaches,” said Josh Weisbrod, a leader in Bain’s Healthcare Practice and one of the report’s authors. “In the push to infuse more protocols into healthcare and make it value-based, the industry should not underestimate the importance of helping physicians combat their skepticism so they can take a more a more active role in shaping and leading change.”

Editor’s Note: To arrange an interview with Mr. van Biesen or Mr. Weisbrod, please contact Dan Pinkney at dan.pinkney@bain.com or +1 646 562 8102

To download the report, click here.

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