Insights / Quality Improvement / Uncategorized

Building the Healthcare System of The Future on Outcomes, not Services

Andrew Pecora

I was asked to take part in a think tank on the rising cost of cancer care nearly a decade ago. It was, as expected, a blue-ribbon panel with some of the leading minds in medicine, business and public health policy present. We discussed, among other things, the most efficient way to bring the best-possible, most-effective cancer care to the people who need it. But we were forced to recognize that we faced some frustrating obstacles.

Foremost among these were the ways in which providers were paid, which was – and remains – for service, not for outcomes, and the total cost of care, which even then had become crippling. The consensus was that we would eventually be forced to ration out cancer care in the U.S. The group recognized that we could not call it rationing because that simply wouldn’t take in one of the richest countries in the world. We would, they reasoned, essentially adopt the UK NICE system.

To me, this was a serious blow. Despite the fact that the panel accepted this as an unavoidable economic reality, I knew the injustice of the position, given how much we’ve accomplished in cancer care. We have spent the last four decades developing drugs that are transforming patient care; would we not be able to use them on those who needed them most? To me, this was the ultimate horror. It caused me to fully re-examine how we deliver, organize, and pay for treatment in America.

On my path forward, I realized that we first needed to recognize our challenges clearly. The problem dwarfing all other concerns is that we are simply spending too much.

Healthcare spend in the U.S. is almost double that of other high-income countries, and at current rates of growth, our spending has already become unsustainable. And yet, approximately one-third of the $three-trillion annual spend on healthcare in the U.S. fails to enhance clinical outcomes. A huge portion of our healthcare dollars are being wasted on not ideal therapy, unnecessary procedures, tests and hospital stays, as well as mounting administrative, labor and medicine costs.

The overarching problems of unsustainable spending and the waste that fuels it carry with them additional, contributory challenges. Working in healthcare, one notices quickly that the industry is prone to the creation of siloes. Doctors work in a service silo, wherein if they do less, they make less. Not only is this a key factor contributing to physician burnout, it’s very much a central factor in the phenomenon of spiraling costs that we’re experiencing here in the U.S. By paying for service, not for outcomes, we are guaranteeing higher costs – and the risks that tend to accompany unnecessary procedures.

In their silo, most physicians must also contend with a large amount of uncertainty. Doctors don’t know about what’s going to happen in our industry next year, and, as they cope with additional uncertainty caused by mergers and acquisitions, they can’t anticipate the burdens that are going to be placed on them. Without a clear idea of what they’re expected to do, how can physicians concentrate on treating patients to the best of their ability? Right now, the speed of change is giving doctors whiplash; they need to cope with change and deal with increasing administrative fatigue. They also need to stay in business, applying their education and skills to improve and sustain life. It’s an unenviable balancing act at the best of times.

Compounding that problem are the issues posed by spending and waste in the U.S. hospital system. In their respective silo, hospitals need to keep their beds full in order to keep revenue flowing. Rewards here are based on what and how much you do, not on the positive outcomes achieved. In other words, the system is designed to be counterproductive to real value – the value of improved outcomes for individuals and families who demand the best from the system.

These factors all drive clinical waste, and despite efforts to reign in unwarranted variation in healthcare utilization (both too much and too little care), it persists in our current system. It’s staggeringly costly and it may adversely impact patient survival[1]. Conversely, increasing efficiency and reducing waste would contribute greatly to value and clearly be in everyone’s best interests.

The growing move toward prospective- and value-based payment models makes these goals even more important to clinicians and providers, who are increasingly feeling the pressure to consider costs in their calculations and decisions. Decreasing cost can be directly accomplished through sharpening effort, protocol and practice.

Fitting the treatment to the patient and their particular disease is the basis of the increasingly important practice of precision medicine. By pinpointing the precise patient and disease characteristics known to influence outcomes and using them to guide treatment – identifying those patient groups that could benefit from specific therapies and thereby reducing unwarranted variations in care – we can see a path forward to fostering improved outcomes while reducing costs.

For example, by using advanced genomic diagnostics to guide healthcare choices, we can chart significant improvement in clinical outcomes for lung cancer[2]. Additionally, such genomic profiling may potentially reduce total cost of care. In a study[3] in which I participated of women patients with Stage II breast cancer, prospective 21-gene expression profile (GEP) testing led to lower utilization of adjuvant chemotherapy (28.6% versus 86.7% when not profiled) and a potential net savings of $11,494 per patient inclusive of the cost of GEP testing ($4,175 per profile) through reductions in unnecessary chemotherapy use. We concluded that universal GEP testing of women 70 years or younger with Stage II or grade 2/3 lymph node-negative breast cancers would result in lower outpatient costs, including diagnostics, observable within the first six months of care.

AI and machine learning are also contributing to clinical success. With the advent of Cancer Outcomes Tracking & Analysis (COTA)[4], we have the ability to digitize patient data that allows for a “personal patient barcode,” allowing us to target treatment, giving patients the care they need for the disease they have. With physicians working with data enabled by machine learning that show them the best path forward for each individual patient outcome, we will see survivals go up, toxicity go down.

And yet, while we are experiencing successes like these as we drive toward precision medicine, we are not yet approaching precision payment. We must now align the business of healthcare with the direction of the science, truly rewarding the doctor for the right outcome, not the right number of procedures ordered.

Perhaps it is healers who are best tasked to heal the healthcare system. We can see the problems standing in the way of healthcare’s most important mission: providing everyone with the care needed to treat the illness that they face – no more and no less. Physicians are in the trenches, in the best vantage point from which to provide the leadership needed to transform care. By breaking down the silos that isolate us, opening lines of communication and taking an open-source approach to data, we can ensure that best practices are shared. And, by pooling resources and apportioning costs, we can support scaling our efforts across states and across the country. The result is that we could see the cost of care plummet.

That would be critically important, as completely unsustainable skyrocketing costs are inhibiting our ability to treat patients and are likely fostering distrust[5] between patients and the healthcare system. That’s an untenable situation, and it must be addressed with speed.

To do that, we need to fundamentally change the way we pay doctors – not for services, but instead, for outcomes. In place of ordering ten tests that are part of an accepted protocol arrived at through an arcane process, we should be ordering the five tests that are exactly right for the patient’s needs. That will have immediately beneficial results for both outcomes and costs.

Looking back to that think tank, I realize that it was one of the most valuable experiences I’ve ever had because it provided me with a profoundly unsettling moment. As a clinician, researcher and business leader, I’ve had many challenging moments, but this one was different. Ultimately, it would alter the path I had chosen to pursue. For at this time, when we bemoan our ailing health system, there is now a growing generation of physicians with the skill to heal patients and the business acumen to heal the fragmented health ecosystem.

My experience forced me to think long and hard about what the healthcare offering of the future should look like. And, what needs to happen to get us from here to there. Not just ideally, but practically, every patient deserves to get the care they need for the disease they have for the best possible outcome – no more or less. That’s simple, and it’s the cornerstone of the healthcare system of the future that I want to help build. If we can do that at the point of care, supported by AI–enabled data that shows doctors the best path forward for that particular patient to achieve the best outcome possible at the lowest cost, we will have achieved much. We will see improvement in care, lower burden for doctors, greater savings in the system, lower cost to patients, and ultimately, better profits for doctors. We will have set the stage for curing a healthcare system that has been ailing for a long time.

As CEO of Outcomes Matter Innovations (OMI),  Andrew Pecora, MD, FACP, CPE, is a national advocate for improving patient care while making medical practices more efficient and profitable through the use of AI and health technologies. Dr. Pecora comes from Hackensack Meridian Health, where he was President of Physician Enterprise,  Chief Innovations Officer and played a pivotal role in the creation and expansion of the John Theurer Cancer Center.


[1] “The American Society of Clinical Oncology, 2017. “The State of Cancer Care in America, 2017: A Report by the American Society of Clinical Oncology.” J. Oncology Practice. 13(4), e353-e394.

[2] “Erlotinib versus chemotherapy as first-line treatment for patients with advanced EGFR mutation-positive non-small-cell lung cancer (OPTIMAL, CTONG-0802): a multicentre, open-label, randomised, phase 3 study.” Lancet Oncology. 12(80), 735-742.

[3] Waintraub, S. E., McNamara, D., Graham, D. M., Pecora, A. L., Min, J., Wu, T., . . . Goldberg, S. L., 2017. “Real-world economic value of a 21-gene assay in early-stage breast cancer.” Am J Manage Care. 23(12), e416-e420.

[4] Pecora, Andrew and Pomerantz, Glenn. “Cancer Outcomes Tracking & Analysis, Innovations in Cancer Care: The Movement in Value-Based Care.” 2011., 2011 (accessed 8 August 2019)

[5] Armstrong, K., Dean, L.T., McCarthy, A.M., Moss, S.L.,“Healthcare System Distrust, Physician Trust, and Patient Discordance with Adjuvant Breast Cancer Treatment Recommendations.” December 2017.  Cancer Epidemiol Biomarkers Prev. 26, 1745-1752.

One thought on “Building the Healthcare System of The Future on Outcomes, not Services

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s