The Opportunity to Transform Our Health Care System

There is no denying our health care industry is fragmented, ineffective and has had unsustainable growth in costs. As Bloomberg uncovered in its ranking of the most efficient countries for the delivery of health care last year, the U.S. placed 46 out of 48, outpacing just Serbia and Brazil. The bottom line: the world’s richest country spends more of its money on health care while getting less than almost every other nation in return. Whether through the Affordable Care Act or some other act of legislation, we all know our health care system needs to change.

 

At the forefront of health care reform in the United States is the Triple Aim which places focus on the care experience, decreasing costs and improving quality. We are entering an era of accountability where value-based purchasing and the needs of the consumer must come first.

Physicians and hospitals have a unique opportunity to transform and redesign the health care system. However, in order to do so, they must align, collaborate, and engage with each other to an extent not previously seen in our industry.

 

Reform is leading to a new wave of consolidation that favors partnerships between hospital systems. They are racing to increase economies of scale and market share in order to capture more of the revenues from the Affordable Care Act as well as an expanded Medicaid and the surge in baby-boomer Medicare patients.

 

For physicians, this new reality translates to a major shift. In order to “lock-in incomes” in a declining reimbursement environment, physicians are increasingly seeking new employment opportunities and moving from solo practices to becoming a system employee. Just a decade ago, hospitals owned a quarter of all physician practices; by 2011 they owned half.

 

Hospital and physician providers need to address how to optimize performance in the current environment while also preparing to “make the jump” from fee for service to a value-based payment system. This requires transparency in both quality and cost.

 

We need to build practices and systems in which services, providers, and sites of care are organized around the patient, care is coordinated across the continuum, and navigation between services and sites of care is proactively facilitated and managed by providers for the patients and their families.

 

In summary, these are the realities of health care reform physicians must prepare for:

• Medicare and Medicaid reimbursement will decline and Medicare break-even will become an imperative. Reducing clinical variability will be key.

• “Fee for health” and bundled payments will be a significant part of the financing model.

• As exchanges come on line, providers will see a shift in their payer mix, with individuals and small employer groups moving to the exchanges from commercial insurers (probably at lower reimbursement rates).

• A continued shift to outpatient settings, more observation patients, and fewer readmissions will result in flat to declining inpatient volumes.

• Evidenced-based care will become more widespread, accepted, and the standard against which providers will be evaluated and held accountable.

• The continuum of care will become the new operating model and coordinating care and information among and across providers and sites of care will be a required core competency for population health management.

• Consolidation of providers will continue and employment of physicians will increase.

• Quality metrics will evolve and become more outcomes focused. Quality scores will continue to rise, resulting in “compression” of quality scores among providers.

• As consumerism comes to health care, patient experience and cost will influence use of services by patients and social networking and information exchange with the patient will become much more important.