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Suggested Citation:"6 Exploring Opportunities to Improve Private-Sector Investment in Capacity Building." National Academies of Sciences, Engineering, and Medicine. 2018. Engaging the Private-Sector Health Care System in Building Capacity to Respond to Threats to the Public's Health and National Security: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25203.
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6

Exploring Opportunities to Improve Private-Sector Investment in Capacity Building

The workshop’s fifth session included two panels. The first examined regulatory barriers and facilitators for private-sector investment in capacity building and the second discussed financial barriers and facilitators. The panel on regulatory barriers and facilitators was moderated by Thomas Kirsch from USUHS and featured Alex Camacho-Vásconez from PAHO and Sean Griffin from the North American Electric Reliability Corporation (NERC). The second panel was moderated by Angela Brice-Smith from CMS and the four panelists were Andrew Baskin from Aetna; David Frankford from Rutgers Law School; Leslie Platt from the MITRE Corporation; and Lucy Savitz from Kaiser Permanente. An open discussion followed each panel.

EXAMINING REGULATORY BARRIERS AND FACILITATORS

Risk reduction is one of the main challenges that PAHO faces and one that it considers a key component of effective measures to approaching hospital preparedness in the Americas, said Alex Camacho-Vásconez. For several years, PAHO has been working on its Safe Hospitals Initiative and has created a hospital safety index that helps facilities assess their safety and avoid being a casualty of a disaster.1 This index is based on structural, nonstructural, and functional factors, he explained, and the idea is for the index to provide a probability that the hospital would continue operating during

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1 See http://www.paho.org/disasters/index.php?option=com_content&view=article&id=964:safety-index&Itemid=912&lang=en (accessed April 27, 2018).

Suggested Citation:"6 Exploring Opportunities to Improve Private-Sector Investment in Capacity Building." National Academies of Sciences, Engineering, and Medicine. 2018. Engaging the Private-Sector Health Care System in Building Capacity to Respond to Threats to the Public's Health and National Security: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25203.
×

and after a disaster. A “C” classification, he said, means that the facility must take urgent steps to avoid failing during an emergency or disaster. A “B” classification means that intervention measures are needed in the short term, while an “A” classification denotes that the hospital will function in a disaster, though it should continue with preparedness activities. The most important reason to classify hospitals, said Camacho-Vásconez, is that it lets those who make decisions prioritize what they must do to have their facilities prepared for a disaster.

According to Camacho-Vásconez, a 2015 assessment of the Safe Hospital Initiative found that 71 percent of the 35 PAHO member nations had a national safe hospital program and 97 percent had created a database of evaluated hospitals using the safe hospital index. In addition, 63 percent of PAHO member countries had established formal, independent mechanisms for supervising hospital construction, and 80 percent had included safe hospital concepts in new health investment projects. The 2015 assessment also identified gaps, such as the fact that only 66 percent of the hospitals in PAHO member countries had up-to-date standards for the design of health facilities that were included in national building codes. The assessment also found that 20 percent of the hospitals had a “C” classification and 43 percent had a “B” classification.

To reflect the nature of hospitals in the Caribbean, PAHO has developed a set of tools to evaluate small and medium health facilities of the sort that are more common in Caribbean nations, explained Camacho-Vásconez. It has also started the Smart Hospital Initiative, which established a green checklist that will help hospitals be sustainable as well as safe as a means of reducing their carbon footprint and saving money. The first hospital to engage with this new initiative, the Georgetown hospital in St. Vincent, realized a significant drop in energy and water consumption in the year after revamping its facility to meet program requirements. Thanks to an investment of nearly $30 million from the United Kingdom, PAHO is intervening in 7 countries now and expects to intervene in at least 13 countries over the next 5 years.

Camacho-Vásconez noted that Mexico has used the hospital safety index to engage the private sector in efforts to improve the safety of its hospitals, and as a result, Mexico lost fewer than 50 beds during each of the past two earthquakes to hit the country, compared to the 5,000 beds it lost during the 1985 earthquake. He added that Mexico is taking the same approach with its schools and hotels and including them in its preparedness activities. Similarly, Ecuador’s private sector has been actively involved in upgrading that country’s hospitals. In a recent 7.8-magnitude earthquake to strike that country, the country’s large hospitals were prepared, though the small- and medium-sized facilities were not.

NERC, explained Sean Griffin, is a nonprofit, international regulatory

Suggested Citation:"6 Exploring Opportunities to Improve Private-Sector Investment in Capacity Building." National Academies of Sciences, Engineering, and Medicine. 2018. Engaging the Private-Sector Health Care System in Building Capacity to Respond to Threats to the Public's Health and National Security: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25203.
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authority charged with ensuring the reliability of the bulk power system in Canada, the United States, and parts of Mexico. Originally, NERC was a voluntary group established in the 1960s after a variety of regional blackouts occurred in the United States and Canada. The bulk power industry decided to develop a set of voluntary guidelines and standards for the reliable operation of the three main power system interconnects. Following the widespread power outage that affected parts of the Northeastern and Midwestern United States and Ontario in August 2003, Congress decided to make the voluntary council a mandatory corporation and give it regulatory oversight. The Energy Policy Act of 2005 also empowered the U.S. president to work closely with Canada to harmonize standards across the two countries. Griffin noted that NERC’s regulatory oversight is limited to bulk power generation and does not extend to the distribution system or retail-level sale of power. NERC does, however, maintain an information sharing and analysis center that covers all segments of the power industry and shares security and threat information relevant to the electric power sector.

NERC operates three committees—the Critical Infrastructure Protection Committee, the Operating Committee, and the Planning Committee—that develop the standards and guidelines meant to ensure a secure, reliable, and resilient bulk power system, said Griffin. The Critical Infrastructure Protection Committee, for example, develops cybersecurity standards, physical security standards, and emergency procedures for natural disasters, acts of terrorism, and pandemics. The committee process is driven by industry and is not by top-down federal edicts, an arrangement that Griffin said makes sense given that council members own and operate the relevant assets, which have a total value exceeding $1 trillion, and have a vested interest in making sure they are resilient in the face of disaster.

DISCUSSION

To begin the discussion, Kirsch asked the two panelists to describe any incentives and disincentives that have been effective at holding public and private entities accountable for the public good. One aspect of NERC, replied Griffin, is that it can fine violators $1 million per day, which provides a clear incentive for accountability and operating within the guidelines. Another incentive is the ability for companies to make the case for a rate hike to be fully effective at implementing standards and ensuring the electric grid is reliable. Florida Power and Light, the largest utility in Florida, made such a case after the 2004 and 2005 hurricane seasons. The resulting infusion of funds allowed the utility to invest in capacity that enabled it to reduce the average time to restore power following a hurricane from 15 days in 2005 to 2 to 3 days in 2017.

Suggested Citation:"6 Exploring Opportunities to Improve Private-Sector Investment in Capacity Building." National Academies of Sciences, Engineering, and Medicine. 2018. Engaging the Private-Sector Health Care System in Building Capacity to Respond to Threats to the Public's Health and National Security: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25203.
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Kirsch then asked how rules, regulations, and rewards can be adapted or leveraged to improve public–private coordination, particularly for health systems that have many disparate missions and players. One challenge with applying the NERC model to health care, said Griffin, is that the power industry has one federal regulator, whereas the health care sector has many regulators. The NERC model could work, but it would require consolidating regulatory authority into one body, he said. In addition to regulatory standards, NERC also has reliability coordinators who act as the conductor of the power grid orchestra and ensure the grid operates as one large, integrated machine. Camacho-Vásconez added that the Safe Hospitals Initiative is not just about the safe hospital index, but it includes policies, programs, a budget, and other aspects that make a risk reduction program successful.

Kellerman asked Camacho-Vásconez if PAHO has evidence that Category A hospitals were more likely to survive disasters. Camacho-Vásconez replied that there are some data showing that the interventions have been successful in the British Virgin Islands, Dominica, Ecuador, and Mexico. He added that he has had personal experience that testifies to the effectiveness of this program. When he was director of the largest hospital in Ecuador some years ago, he made decisions on how to improve operations at the hospital based on the safe hospital index. During the subsequent H1N1 outbreak, his hospital successfully served as the national focal point for responding to the outbreak, something that would not have been possible without making those improvements.

John Hick pointed out that the health care system, unlike a utility operator, cannot go to a regulatory body to make a case for a rate hike when it needs funds to improve preparedness, for example. Griffin’s suggestion was that if the health care system wanted to adopt a NERC-like model, it would have to work with federal and state regulators to reach a consensus on how the industry could recoup costs for such activities. He noted that a recent amendment to the Federal Power Act allows utilities to recoup the costs of responding to any national emergency declarations made by the Secretary of Energy.

Daniel Hanfling commented that a third model to consider is the one the VA used from 2007 to 2010 to engage in a comprehensive evaluation of its emergency management programs. The VA, modeling its approach after the PAHO program, developed an assessment tool with 71 capabilities that looked at both hospital-wide emergency management capabilities as well as network- and region-wide capabilities in the VA system. From that analysis of more than 150 VA medical centers, the VA developed a set of leading indicators for preparedness (Dobalian et al., 2013). He recommended considering the VA’s approach to answering the question of whether its system was prepared to respond to a disaster.

Suggested Citation:"6 Exploring Opportunities to Improve Private-Sector Investment in Capacity Building." National Academies of Sciences, Engineering, and Medicine. 2018. Engaging the Private-Sector Health Care System in Building Capacity to Respond to Threats to the Public's Health and National Security: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25203.
×

EXAMINING FINANCIAL BARRIERS AND FACILITATORS

Health plans play a role in disasters, emergencies, and other large-scale disruptive events, said Baskin. In fact, he noted, every time a state or federal emergency is declared, it automatically triggers a response from Aetna that includes putting certain resources in play, depending on the specific event. When a disaster strikes, for example, Aetna opens its employee assistance program to any in the affected area that may need them, something Baskin suspects other insurers do as well. Within hours of Hurricane Harvey hitting Houston, Aetna had mined its database and had a list of every client who was on dialysis, had a home ventilator, required oxygen, was on a specialty infusion drug, or had other conditions that would require direct contact.

When Baskin and his colleagues have advance notice of an impending disaster, such as a hurricane, the company often will reach out proactively to all of its members who have a special need for care to arrange for early prescription refills, for example. Policy requirements, such as advance notice for hospitalizations, are put on hold during the event. “All of these things may not sound like the acute inpatient care that we have been talking about, but I can tell you that these are things that matter to the members out there,” said Baskin. “They are calling us all the time because they want to make sure that their care is going to be covered and make sure someone is there to help them.”

Baskin explained that Aetna has a cadre of nurses from around the country that it draws on to supplement local staff and ensure there is enough surge capacity to provide care during a disaster, including being available by phone for patients. All told, more than 1,000 case managers from his company alone can be mobilized online during an emergency to help patients receive the care they need or bring them to a place where they can receive needed care.

Frankford commented that the health care finance world has been well aware of the silos, lack of coordination, and the need for more community capacity for more than 40 years, dating back to the time when the Health Maintenance Organizations Act of 1973 was seen as a way to replicate health systems such as Kaiser Permanente and Geisinger Health System. What was learned from subsequent efforts, though perhaps not acted on, he said, was that capacity in organizations does not just spring into existence even if money is used as an incentive. He also noted that while consolidation in the health care sector may have its downsides, the upside is that coordination is easier to achieve.

In Frankford’s view, emergency capacity in the health care system is a public good, something the public wants when needed, but hopes it never will. Today, however, the call to build surge capacity is an unfunded man-

Suggested Citation:"6 Exploring Opportunities to Improve Private-Sector Investment in Capacity Building." National Academies of Sciences, Engineering, and Medicine. 2018. Engaging the Private-Sector Health Care System in Building Capacity to Respond to Threats to the Public's Health and National Security: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25203.
×

date. “We have to find a way to infuse money for this public good back into the system,” said Frankford. Other wealthy countries, he said, have stable systems of financing emergency capacity that do not rely on appropriations from general revenues, in large part because they are usually an unstable source of funds. Rather, these countries use a dedicated source of funding, such as payroll taxes, trust funds, and surcharges on collected premiums. He cautioned, though, against trying to find some grand new design to support surge capacity because changing the payment system is like “trying to change the flow of the Mississippi River.” Instead, he said, it is important to look for the tools at hand that can produce a dedicated revenue source for preparedness.

In the months after the September 11, 2001, attacks, Savitz received a grant under a bioterrorism preparedness program to create an atlas of nursing homes around the country. When Hurricane Katrina hit, those maps came in handy because the disaster management team had no idea where the nursing homes in the affected region were located. Savitz has overlaid maps showing locations of nursing homes, public health departments, major road networks, and funding regions for all 50 states and the District of Columbia. “There was absolutely no alignment or sensibility,” said Savitz. “There was no strategic alignment of health.”

Within 2 hours after officials received the maps, Savitz was asked to compile all of the data and drive to Washington, DC, where she worked at the Incident Command Center for the next 16 weeks to update the maps. At the time, these maps formed the basis of the only geographical information system (GIS) available for disaster planning, though today ASPR has one, too. She noted, though, that these maps are not complete because they are missing data on places of worship and other non-traditional providers of support. During the 2 years she worked in Biloxi, Mississippi, to help rebuild the primary health care system following Hurricane Katrina, she learned that places of worship play a key role in providing shelter and that pastoral nurses could serve as extra capacity during a disaster. The challenge, she said, is to consider all of the other community-based organizations that might be available during a disaster and to determine how to represent them in a GIS system so they can be called up during a disaster.

Turning to the subject of financing, Savitz said it took 7 months before Biloxi received any federal funding for recovery. In fact, the first funding it received came within 1 month from Qatar, which allowed the recovery team to begin the rebuilding process and get the federal quality community health center back in operation. That facility, she said, was the sole source of health care available in the community. Speaking from her perspective as a quality improvement professional, she said as money now flows into efforts to create big data resources and resilient communication channels, those efforts must be woven into the fabric of how care and services are

Suggested Citation:"6 Exploring Opportunities to Improve Private-Sector Investment in Capacity Building." National Academies of Sciences, Engineering, and Medicine. 2018. Engaging the Private-Sector Health Care System in Building Capacity to Respond to Threats to the Public's Health and National Security: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25203.
×

delivered in a community. “That will allow it to be readily available, maintained, and practiced on an ongoing basis,” said Savitz. “To have something standalone that we create and that we do not use is not going to be ready. It will not be maintained, and it will be a poor investment on our part.”

Her final comment was that health care systems are now spending resources to serve the needs of populations, which takes them beyond the walls of their clinics and hospitals. In doing so, they are creating databases, and she suggested looking at ways to repurpose those resources for disaster preparedness by adding incentives, either through accreditation or other kinds of programming.

Platt explained that the issue “is not always about the money, but in this case the money is not at the table because we do not have the casualty insurers, the risk managers, or the investment community here.” In particular, he said the investment community is “the big elephant that should be invited to the party.” Based on 40 years of experience of working in various aspects of private capital, he believes there is a way to get the investment community involved to help fund a sustainable health system capable of responding to disasters. To him, the necessary surge capacity in terms of both physical and human resources, and the ability to make the health system resilient in the face of large-scale disasters, needs to be regarded as an essential cost of doing business. “It has to [be] part of the day job of every one of these certified participating facilities and organizational and institutional components of our ecosystem,” said Platt.

With that framing, Platt said, preparedness, response, and resilience can become investable as part of the inherent cost of doing business. However, that message will only be driven home if preparedness becomes part of a health system’s licensing and certification requirements. The Joint Commission, said Platt, has been moving in a helpful direction in that regard. In addition, the insurance industry has to change its thinking that disasters are relatively low-occurrence events given that they are becoming more frequent and have an outsized effect.

Platt’s organization has been working on approaches to aligning the diverse interests of stakeholders in complex ecosystems such as health care. For example, MITRE has been working with the airline industry and the Federal Aviation Administration (FAA) to create an environment in which the airlines no longer compete on safety and instead pool information in a secure, redacted database that MITRE maintains. One requirement for creating such an ecosystem is for the stakeholder to accept that cooperation and coordination are inherent costs of doing business. In the case of health system preparedness, this means that stakeholders need to regard preparedness and resilience as a funding and financing obligation for the public good.

Platt said another essential aspect of achieving a committed financing

Suggested Citation:"6 Exploring Opportunities to Improve Private-Sector Investment in Capacity Building." National Academies of Sciences, Engineering, and Medicine. 2018. Engaging the Private-Sector Health Care System in Building Capacity to Respond to Threats to the Public's Health and National Security: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25203.
×

stream for preparedness and resilience is to get the casualty insurers who provide general liability and director’s and officer’s insurance to the table. If a private health system, for example, is deficient in its preparedness or resilience and that puts the system at risk of failing its members, that deficiency can have immediate financial and regulatory consequences for the system and its executives, affecting liability insurance rates. “What I am saying is that if you start changing the framing for licensure, for certification, and for insurance risk classifications to include readiness, response, and resilience capabilities, then you get to a risk classification that actually matters,” said Platt.

One approach to making preparedness and resilience investable is to declare them to be public goods with respect to national security and public health, Platt explained, which would bring together CMS, DHS, and DoD. Together, these three partners could align their efforts to fund performance breakthroughs that dramatically improve the capability of organizations to provide surge capacity, for example. FEMA already uses provisions in the Economy Act to encourage federal agencies to collaborate and provide funding for activities related to its mission.

The bottom line, he said, is that the financial community would rather invest in building and rebuilding American infrastructure. The key is giving the financial community investable instruments that are fairly harmonized and standardized, such as bonds that are rated by bond-rating organizations. “If you line up the funding streams so that [they are not just nice things] to have, but [they are] actually investable, we can actually change the delta on this so that the next time there is a meeting like this, we can actually have the financial folks excited to be looking at a brand-new deal flow where they can make fees on investment,” said Platt. His advice in closing was to follow the money. “Follow the tried and true mechanisms for aligning the capital to make this a national priority as part of our national security,” he said.

DISCUSSION

Brice-Smith asked if Baskin had any ideas from the perspective of a health insurer on how to better deal with some of the financial issues related to threats and disasters. Baskin replied that the cost of emergency preparedness, response, and resiliency is more than just a medical cost issue. Today, health plans are already financing the medical costs that occur, and in that respect, he has some concerns going forward as the health care financing system starts moving more risk onto providers than it has in the past. “When we talk about alternative payment models where we are transferring risk, we are transferring the risk for disasters as well, and we are transferring these medical costs, which could surge and potentially

Suggested Citation:"6 Exploring Opportunities to Improve Private-Sector Investment in Capacity Building." National Academies of Sciences, Engineering, and Medicine. 2018. Engaging the Private-Sector Health Care System in Building Capacity to Respond to Threats to the Public's Health and National Security: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25203.
×

harm a provider organization in one of those arrangements financially,” said Baskin. Although some protections are available to providers, such as stop-loss insurance, for a disaster that raises cost of care by 25 percent, for example, even a 5 percent increase over the contracted amount could be devastating to an organization that operates on a 1 to 2 percent margin, he explained. “I do not know that we have figured out the mechanism to protect against that,” said Baskin.

Savitz agreed with Baskin and said that in the drive to purchase by moving into a risk-based environment, nobody has really thought through the implications of assuming that risk on the downside. Frankford noted that the U.S. health care financing system has been built around shifting costs and risks to someone else. Although the Patient Protection and Affordable Care Act ameliorated that to some extent, shifting costs and risks are still basic incentives in the system. “This raises the classic free rider problem, where everybody looks to everybody else to make the necessary investment, and no single entity alone has the incentive to make that investment because they thereby confer benefit on their competitors,” said Frankford. “What we need here is collaboration across institutions.” He agreed with Platt that part of the answer is to bring in private capital, but that approach has limitations in a system with such massive fragmentation as is the case in health care.

Before opening the discussion to the workshop participants, Brice-Smith noted that the private sector’s response during Hurricane Harvey was tremendous in terms of pitching in to provide supplies, medicines, and clothing. Southwest Airlines, she said, flew in to evacuate people, which surprised her. In her mind, that type of response given the circumstances requires a great deal of coordination, which she found impressive.

Savitz commented that health care has changed dramatically since Hurricane Katrina in that more care is provided in the community as hospital stays have been shortened and unnecessary emergency departments visits and hospitalizations have been reduced. Much of that care is provided by informal caregivers who are funded in many instances by Medicaid or Medicare. She wondered if this workforce can be trained to provide what she called preparedness in place. She also wondered if CMS’s Healthy Communities Initiative could be leveraged to improve preparedness.

Ira Nemeth asked Baskin if there was some way to involve the insurance industry in better coordinating activities during and after a disaster. Baskin replied that he has wondered if there was some way the insurance industry could develop a standardized way to communicate with the broader provider community, share information better, harmonize policy liberalizations for disaster situations, and provide consolidated information about resources that are available in the community, such as telemedicine services for behavioral health. “As a group of health plans, could we

Suggested Citation:"6 Exploring Opportunities to Improve Private-Sector Investment in Capacity Building." National Academies of Sciences, Engineering, and Medicine. 2018. Engaging the Private-Sector Health Care System in Building Capacity to Respond to Threats to the Public's Health and National Security: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25203.
×

somehow share those resources and make them available across lines of health insurers?” he asked. “It certainly makes some sense to me that what we are doing can be leveraged and more efficiently provided and be more uniformly communicated.”

Nemeth also asked if there was a way to fund preparedness through some sort of universal levy, in the way that universal telephone service in the United States was funded by a small tax added to telephone bills. Platt agreed that something different needs to be tried. In his mind, forming consortia that would raise funds together make sense. His company, for example, offers a catastrophe bond, underwritten by Moody’s, to protect against the risk associated with hurricanes and other catastrophes that might be appealing to a consortium of health systems. He sees now why some of the cost of buying that kind of bond could not be part of the premium paid by CMS or other parts of the federal government. The point, he said, is that there are incentives for the financial alignment of performance improvements using consortia as the vehicle for harmonizing stakeholder values. “The tools are there, the capital is there, and the risk management, insurance, and reinsurance vehicles are there,” said Platt. “They are not new.”

Savitz countered that health care is not perceived as a social good in this country and that a use tax tends to be a regressive tax. Baskin said he agrees with the use of the carrot, but he would like to add the stick. He noted that health plans excel at creating networks, which involves coordinating among providers of diverse types who are responsible for providing health care for a population. Moreover, providing health care to a population is an obligation to have capacity for national emergencies, he noted. Given that argument, he said he could see state insurance regulators requiring investments in preparedness and resilience. Frankford seconded this idea of using network adequacy as a stick, particularly with regard to coordinating the components of a network, which he believes is the missing piece regarding preparedness and response.

Kaplan, returning to Brice-Smith’s remark about the scale of the private sector’s voluntary participation in the response to Hurricane Harvey, said the American spirit of volunteerism is something the health care system has not tapped or leveraged yet. The problem, he said, is that no vehicle is available to align the companies that jump in to provide support during disasters. He wondered if there might be a way of enlisting the private sector as formal partners and develop a vehicle so they can help fund some of these initiatives. “They already play in the same sandbox when needed, so why not have them as our proactive partners rather than our retroactive supporters?” asked Kaplan.

Laura Wooster, from her perspective as an emergency care physician, asked if there was a way to use the community benefit tax deduction as an

Suggested Citation:"6 Exploring Opportunities to Improve Private-Sector Investment in Capacity Building." National Academies of Sciences, Engineering, and Medicine. 2018. Engaging the Private-Sector Health Care System in Building Capacity to Respond to Threats to the Public's Health and National Security: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25203.
×

incentive for health systems to invest in preparedness and other emergency care activities. Baskin replied that the current community benefit requirement is voluntary to some extent, which he acknowledged is oxymoronic. He added that the type of capacity this workshop has discussed is currently counted as a community benefit, but coercive legislation is needed to force more capacity building to occur. The limitation, though, is that the community benefit deduction is only useful to the not-for-profit sector.

Helen Burstin from the Council of Medical Specialty Societies wondered if it would be easier to model what an approach could look like at the community or coalition level by considering an influenza outbreak, which fits more easily into a health care model, rather than a big natural disaster to see if there are some structural or process metrics that could be used for accountability. She also wondered if it would be possible to model the potential savings that could be gained by having coalitions that work together to mitigate poor outcomes and long-term financial effects of an influenza pandemic, for example. Baskin replied that influenza is essentially a planned, annual event that lends itself to a different type of approach. Nevertheless, work has been done with influenza that could be applied to a one-off disaster. For example, insurance companies have expanded their concept of networks to include pharmacies and community health centers as places that could provide flu vaccines and developed new mechanisms that made it simple for these non-network providers to bill and be reimbursed. In the same vein, he wondered if it would be possible for health plans to cooperate and collaborate on their networks so that the network can be as big as it needs to be to fit one of these large-scale disasters. “This makes total sense to me, but I am just not sure of the form to accomplish it,” said Baskin.

Platt said that MITRE has been developing a national strategy for accelerating and expanding private co-investment in biomedical innovations that can deliver breakthrough improvements to standards of clinical care for infectious diseases, including influenza, as well as many other large-burden exposures that are heavy cost centers for CMS. “In that context, we have done extensive work to demonstrate that CMS has the authority today to be not just the world’s largest insurance payer for current standard of care, but also the world’s largest innovation buyer by promoting target product profiles for universal flu vaccines and other breakthroughs, such as a replacement for end-stage renal dialysis,” he said. In his opinion, the same authority could be applied using the logic that the public good is a reduction in the likelihood of CMS exposure to massive losses from other large-scale disasters.

Consuelos remarked that securitizing private investments around population was a hot topic several years ago, but the results so far have been less than expected. He also noted that his emergency preparedness team

Suggested Citation:"6 Exploring Opportunities to Improve Private-Sector Investment in Capacity Building." National Academies of Sciences, Engineering, and Medicine. 2018. Engaging the Private-Sector Health Care System in Building Capacity to Respond to Threats to the Public's Health and National Security: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25203.
×

had tried to speak to leadership about the role preparedness can play in reducing risk and associated insurance premiums, but there seems to be a complexity to this issue that chief financial officers cannot seem to grasp. Given that, he asked the panelists for their suggestions on how to make the argument for preparedness in a way that chief financial officers can understand and place a higher priority on these activities. Savitz replied that when she was a financial planner for a health system, preparedness was not the number one thing on her list of concerns. “I hate to be so crass about it, but people are responding in crisis management mode to what is in front of them right now.” She noted that she recently moved to Portland, Oregon, which has a large number of bridges that are susceptible to earthquake damage, which would isolate communities. As a result, preparedness for an earthquake is high on everyone’s priority list in Portland.

Platt said one reason securitization has not yet been easy to do in the health care environment, as well as in other areas of social impact, is the lack of enough scale and harmonization to create standard vehicles that minimize the amount of work underwriters have to perform. “Wall Street is looking to put a lot of capital into this arena, but they are looking for harmonization mechanisms,” he said. Platt then noted that unfunded mandates and unfunded, unfinanceable vehicles are not the answer to financing preparedness. “The whole system has to start moving incrementally to build the infrastructure, so we can start to improve the way in which it performs,” said Platt. “What I am suggesting is that there is a path by which to build essentiality as part of the cost of doing business into the role of emergency surge capacity medicine.” In his opinion, there are steps that would align the interests of the private sector and capital markets and deliver funding and financing that makes this sustainable.

Baskin said the real question that needs to be asked is about the role of a health plan in the future in terms of broader emergency preparedness and financing. “What services do we bring to the table that could be coordinated with other services to make this an additive type thing?” he asked. “I think that is a big issue, and I do not think it is well defined.” One opportunity he sees is for health plans as a sector to talk among themselves and then talk with health system and federal leadership about what health plans can offer in terms of communication capabilities, data analysis, or dollars that could enhance the ability of the provider community to do what its job when the times come. An unidentified participant noted that the insurance industry was a terrific partner during the H1N1 influenza pandemic, but the health system does not really understand how to engage the insurance sector on a more sustained basis to work collaboratively on these situations.

Bergero noted there is a huge lever with regard to increasing surge capacity and resilience that has not been pulled at the national level, and that is the potential role of home health care. This type of care, which

Suggested Citation:"6 Exploring Opportunities to Improve Private-Sector Investment in Capacity Building." National Academies of Sciences, Engineering, and Medicine. 2018. Engaging the Private-Sector Health Care System in Building Capacity to Respond to Threats to the Public's Health and National Security: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25203.
×

includes skilled nursing care, respiratory therapists, oxygen providers, and durable medical equipment providers, is the Joint Commission’s second largest accreditation program after hospitals, she said, and she suggested that a national convening organization, whether it is ASPR or some other body, should bring home health care to the table to talk about strategic issues such as surge capacity. While home health used to consist of small organizations spread throughout a community, it has become much better organized in recent years and now major national associations exist, such as the National Association of Home Care and Hospice.

Piazza commented that her community was about to have a large sporting event in its area and while the event would be hiring public safety and medical staff to be at the event, local hospitals have to increase staff, without compensation, to be prepared for a disaster at the event. She wondered if state and local government or the private sector should be responsible for covering those added costs. Platt recommended that local hospitals need to speak up during the planning for such events so that their costs are considered part of the event sponsor’s expenses.

The final question of the session came from Kellerman. He asked Baskin if there was some mechanism that could be used to reimburse pharmacies if they were given the authority to dispense Tamiflu during an influenza outbreak without first requiring individuals to go to the hospital or to see their physician. Baskin replied that health plans reimburse for services allowed under the scope of practice associated with their license. If states were to include that ability in their scope of practice, there would not be a barrier to reimbursement from a health plan point of view, he said.

Suggested Citation:"6 Exploring Opportunities to Improve Private-Sector Investment in Capacity Building." National Academies of Sciences, Engineering, and Medicine. 2018. Engaging the Private-Sector Health Care System in Building Capacity to Respond to Threats to the Public's Health and National Security: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25203.
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Suggested Citation:"6 Exploring Opportunities to Improve Private-Sector Investment in Capacity Building." National Academies of Sciences, Engineering, and Medicine. 2018. Engaging the Private-Sector Health Care System in Building Capacity to Respond to Threats to the Public's Health and National Security: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25203.
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Suggested Citation:"6 Exploring Opportunities to Improve Private-Sector Investment in Capacity Building." National Academies of Sciences, Engineering, and Medicine. 2018. Engaging the Private-Sector Health Care System in Building Capacity to Respond to Threats to the Public's Health and National Security: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25203.
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Suggested Citation:"6 Exploring Opportunities to Improve Private-Sector Investment in Capacity Building." National Academies of Sciences, Engineering, and Medicine. 2018. Engaging the Private-Sector Health Care System in Building Capacity to Respond to Threats to the Public's Health and National Security: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25203.
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Suggested Citation:"6 Exploring Opportunities to Improve Private-Sector Investment in Capacity Building." National Academies of Sciences, Engineering, and Medicine. 2018. Engaging the Private-Sector Health Care System in Building Capacity to Respond to Threats to the Public's Health and National Security: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25203.
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Suggested Citation:"6 Exploring Opportunities to Improve Private-Sector Investment in Capacity Building." National Academies of Sciences, Engineering, and Medicine. 2018. Engaging the Private-Sector Health Care System in Building Capacity to Respond to Threats to the Public's Health and National Security: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25203.
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Suggested Citation:"6 Exploring Opportunities to Improve Private-Sector Investment in Capacity Building." National Academies of Sciences, Engineering, and Medicine. 2018. Engaging the Private-Sector Health Care System in Building Capacity to Respond to Threats to the Public's Health and National Security: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25203.
×
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Suggested Citation:"6 Exploring Opportunities to Improve Private-Sector Investment in Capacity Building." National Academies of Sciences, Engineering, and Medicine. 2018. Engaging the Private-Sector Health Care System in Building Capacity to Respond to Threats to the Public's Health and National Security: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25203.
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Suggested Citation:"6 Exploring Opportunities to Improve Private-Sector Investment in Capacity Building." National Academies of Sciences, Engineering, and Medicine. 2018. Engaging the Private-Sector Health Care System in Building Capacity to Respond to Threats to the Public's Health and National Security: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25203.
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Suggested Citation:"6 Exploring Opportunities to Improve Private-Sector Investment in Capacity Building." National Academies of Sciences, Engineering, and Medicine. 2018. Engaging the Private-Sector Health Care System in Building Capacity to Respond to Threats to the Public's Health and National Security: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25203.
×
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Suggested Citation:"6 Exploring Opportunities to Improve Private-Sector Investment in Capacity Building." National Academies of Sciences, Engineering, and Medicine. 2018. Engaging the Private-Sector Health Care System in Building Capacity to Respond to Threats to the Public's Health and National Security: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25203.
×
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Suggested Citation:"6 Exploring Opportunities to Improve Private-Sector Investment in Capacity Building." National Academies of Sciences, Engineering, and Medicine. 2018. Engaging the Private-Sector Health Care System in Building Capacity to Respond to Threats to the Public's Health and National Security: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25203.
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Suggested Citation:"6 Exploring Opportunities to Improve Private-Sector Investment in Capacity Building." National Academies of Sciences, Engineering, and Medicine. 2018. Engaging the Private-Sector Health Care System in Building Capacity to Respond to Threats to the Public's Health and National Security: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25203.
×
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Suggested Citation:"6 Exploring Opportunities to Improve Private-Sector Investment in Capacity Building." National Academies of Sciences, Engineering, and Medicine. 2018. Engaging the Private-Sector Health Care System in Building Capacity to Respond to Threats to the Public's Health and National Security: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25203.
×
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Suggested Citation:"6 Exploring Opportunities to Improve Private-Sector Investment in Capacity Building." National Academies of Sciences, Engineering, and Medicine. 2018. Engaging the Private-Sector Health Care System in Building Capacity to Respond to Threats to the Public's Health and National Security: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25203.
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Disasters tend to cross political, jurisdictional, functional, and geographic boundaries. As a result, disasters often require responses from multiple levels of government and multiple organizations in the public and private sectors. This means that public and private organizations that normally operate independently must work together to mount an effective disaster response. To identify and understand approaches to aligning health care system incentives with the American public’s need for a health care system that is prepared to manage acutely ill and injured patients during a disaster, public health emergency, or other mass casualty event, the National Academies of Sciences, Engineering, and Medicine hosted a 2-day public workshop on March 20 and 21, 2018. This publication summarizes the presentations and discussions from the workshop.

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