Trends in Healthcare: An Estimate and a Summary

Trends in Healthcare: An Estimate and a Summary

Jun 19, 2017

Healthcare in the United States has slowly but surely been moving in a new direction over the last decade in a subtle but unmistakable manner. On the surface, this does not seem to be a radical shift. The US continues to suffer from a political impasse and an economic plateau.

 

Yet, it seems to me that, under our very eyes, a quantum shift in healthcare in our country might be taking place. Only time will tell if these changes will be pursued to the very end. But at least conceptually, we are seeing a transformation in the paradigm of healthcare delivery and management.

 

These are some of the trends developing over the last few years that seem to be of significance:

 

  1. Accountability: Under the old fee-for-service model, the providers, patients, and insurance companies had no responsibilities. The provider was incentivized to perform more procedures, charge more, and treat more patients. Meanwhile, the patients had no reason to be responsible for their health. The payor, if it was the government, had no clue. It was in the private insurance companies' interest to raise premiums, deny coverage, or create insurmountable hurdles in payment when the stakes were high. But now, the provider, the patient, and the government might have a model where it pays to be accountable. Accountability in terms of quality of care provided, customer service, goals accomplished, outcomes, and keeping a record of one's services has become or is becoming one of the most important concepts in healthcare. Hospitals will be incentivized to reduce readmits in 30 days, reduce complications during an inpatient stay, enforce compliance with record-keeping and documentation among all providers, and join hands with providers to create a synergy. If they fail, they will be penalized. The reaction of many insurers, hospitals, and other health systems, medical device makers, pharmacies, retail clinics, employers, senior advocacy groups, state agencies, associations, and medical groups highlighted dividing lines among industry players as regulators search for ways to overhaul payment. Their responses have created a mounting interest in payment models that might slow the rise in healthcare costs while providing greater value. Some health policy experts are cautioning that the accountable care model has yet to be proven. A warning perhaps supported by the continuing experimentation and sometimes conflicting proposals for how regulators should proceed. Payment methodology based on performance shall be the key to making healthcare accountable.

 

  1. Compliance: Each provider or organization not only has to follow the law, but they must become their policeman and create a culture of compliance among all their employees. This has become mandatory with the healthcare bill signed by President Obama in 2010. But compliance does not mean just record-keeping. It also means administrative, financial, and regulatory adherence to the regulations. Each organization, big or small, will increasingly have to become extremely aggressive in auditing its processes, records, and data and respond appropriately. Hospitals can pay millions of dollars in fines if they fail Recovery Audit Contractor (RAC) audits. Health Maintenance Organizations (HMOs) will see a drastic cut in funding if their Star Ratings are low. The Office of Inspector General (OIG) has targeted practices with high Medicare Risk Adjustment (MRA) for its audits. Thus, it will be incumbent upon the practices that are more successful in documenting well and billing high to carefully screen their billing and coding within their organization before their encounters are sent out. Education and continuous training of human resources and improved tools should make organizations compliant, and intolerance of fraud or abuse will require investment from small and big practices to satisfy state and federal regulations in the future. Internal auditors and comprehensive compliance plan should be discussed with executives and passed to every employee. The hope is that this will empower them to be accountable to achieve a standard goal within “solo” practices and multibillionaire organizations.

 

  1. Utilization management: Medicine has become goal-based with well-defined indicators of success and pay-for-performance will become the norm. To achieve this goal, not only good documentation and compliance are needed, but also a system that focuses on teamwork, constant self- evaluation and assessment, data collection and analyses, and scorekeeping. In short, Healthcare will become like baseball. Scores will need to be kept. Providers will need to be compared. Data will need to be trended. Organizations will have to learn to synthesize data to make sense of it. At the end of the day, the leaders in every organization, whether they run an ACO, a Medical Home, or belong to an HMO, must be forced to form parameters to measure their performance. This trend toward utilization management brings us back to forming accountability in the system.

 

  1. Information technology: EMRs are here to stay. Meaningful Use and its incentivization will encourage most progressive or cutting-edge practices to adopt EMR aggressively. Once EMR is installed and is used meaningfully, data collection will become much simpler. Once data is collected, it will need to be analyzed based on certain criteria. This is where utilization and compliance come in, for the sharing of data among providers and organizations in a secure manner becomes imperative. Suddenly you can see a movement toward integration of data among organizations, providers and hospitals, various providers, providers and insurance companies, and the creation of Health Information Exchanges. Without proper IT, there can be no accountability.

 

  1. Quality management: Quality of patient care has always been an important concept in the medical and insurance industries. Now since quality can be measured and made more and more objective, its value has only increased. The government has also made customer satisfaction surveys a part of its evaluation of an HMO's Star Rating and a Medical Home or hospital's credentials. Soon all the information about providers and their evaluations by peers and patients might be available online. This means that patient care will not only mean seeing a patient, doing a procedure, and billing code, but will also mean focusing on the interaction among the staff, patients, and provider. Patient education will become a part of all disease management protocols, and the intensity of care of specific conditions will only increase not only due to financial but also regulatory reasons. When healthcare is oriented around the unique needs of the patient, it can lead to higher patient satisfaction and better clinical outcomes. Quality takes a patient-centered approach that honors everyone’s culture, social context, and values and empowers patients to play an active role in making decisions about their care.

 

  1. Infrastructure: Gone are the days when a physician practice consisted of a front staff, a medical assistant, and a provider. Now running an office requires the need for specialists, viz., compliance specialists, certified coders, billers, credentialing experts, database managers, customer service representatives, etc. Thus, more and more physician practices are being bought out by hospital chains or venture capitalists so that the resources needed for all this expertise can be provided. The other avenue for physicians is to become part of active IPAs or become part of bigger group practices. Administrative, legal, medical, and financial infrastructure will become a requirement of a successful practice. However, more infrastructures do not necessarily mean greater rigidity. Only those organizations which are nimble yet compliant, able to act quickly yet correctly, business-like yet friendly to providers and patients will take the lead. Physicians must lead the administrative process. Investments may not always lead to much more money, but the focus should be on the delivery of quality care. Investments in the promotion of health and preventive medicine will play an important role and be part of sustainable infrastructure.

 

  1. Integration: An integration of healthcare is occurring on various levels. The integration of IT has been discussed above. We have also reviewed the integration of various business entities on a financial or administrative basis, some examples of which include the buyouts of hospital practices by physicians, ACOs, IPAs, and large group practices creating private service networks. The medical field is also seeing a new intensity of clinical integration of medical practices under specification from CMS or various insurances like Aetna or Cigna. Furthermore, there is a slow absorption of solo practices into larger networks on various levels administratively, clinically, financially, and technologically. Even though politicians are decrying a national healthcare system, we are seeing a unification on an unprecedented scale being pushed by the government and large corporations firmly and forcefully.

 

  1. Corporatization (or at least semi-corporatization) of medicine: Hospitals have become some of the largest employers of physicians in the country. Companies like McKesson not only include pharmaceuticals or medical equipment but also oncology practices and practice management software, billing entities, and E-prescribing systems. Big laboratories are attempting to finance ACOs. The present ACO models envisage the government taking most of the risk for the first two years and sharing it with the ACOs. This might be the biggest public-private partnership in the history of the US if it truly happens. What we are experiencing is the slow disappearance of the Wild, Wild West of Medicine where the Lone Ranger or doctor could stand out on his own. The days of the solo or the silo are over. The big corporation or organization is at an obvious advantage now in the field of medicine.

 

  1. Hospitals, the new HMOs: Hospitals, which until recently had only focused on inpatient and acute care, have suddenly been made responsible for longer terms of care, even outpatient care to maximize their profits. The attempt to create ACOs is also an opportunity for hospitals to bypass the managed care industry. Be that as it may, population medicine is becoming important for all organizations dealing with healthcare. And hospitals can no longer attempt to seclude themselves from the pressures of home healthcare, skilled nursing care, or even assisted living facilities, since it is now their aim to ensure that patients do not get readmitted for the same diagnosis within 30 days of discharge. Hospital systems will open their classrooms to learn from IPAs and managed service organizations. They will compete to create the best primary care network, but challenges will arise in their operations settings, accountability, and quality cores. To achieve their goals, they will become performance-oriented and new infrastructure with Primary Care focus will need to be developed.

 

  1. HMOs strike back: For the last couple of years, it almost seemed that funding for Medicare Advantage programs would be reduced. And HMOs will be bypassed by the creation of ACOs. And yet, when one reviews the requirements of ACOs in funding and creation of administrative infrastructure, one realizes that most ACOs will be best run by the managed care industry. The HMOs have the greatest experience in population management; they have the best systems in IT, database management, UM programs, compliance and quality control, physicians networking, etc. And this means that the king may be dead, but the king will live a long, long time. Over the last couple of years, enrollment in HMOs has accelerated along with the realization that their value is in scaling systems on a larger spread.

 

To summarize, the medical industry is seeing a movement toward accountability among systems, processes, organizations, and providers. We are seeing an emphasis toward greater compliance, UM, quality control, data and information management, and integration of healthcare at various levels. We are seeing an objectivization in the evaluation of healthcare performance and performance-based medicine and the corporatization of medicine. Furthermore, there are new alignments among traditional foes and the breaking of walls between various healthcare sectors. If this assessment of the trends in healthcare in the US is correct, we will soon be practicing in a remarkably new landscape which will be almost as drastic as when Medicare was first enacted as a law. It is time for all healthcare organizations to evaluate their situation, assess their needs, and modify their plans to ensure that they are not left behind in this remarkable transformation of healthcare in the US that is shaping up right before our eyes.

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