5 Changes in Healthcare Reform That Will Affect Your Business

While some may fear the change and others are critical of the actions, the reality is healthcare reform will be with us for many years. There will be many challenges associated with reform, and I believe those organizations that position themselves to embrace the new course will prosper and grow their business.

Here’s some key changes ahead and how various organizations are reacting to healthcare reform.

1. FEWER HOSPITALS, BETTER ACCESS TO CARE

The hospital of the future may not be the hospital as we know it today. Increasing deductibles is just one of the drivers of this change; the rising cost of healthcare inpatient services and the push toward greater efficiency in healthcare delivery is another. What’s ahead for some of us, is a system of integrated clinical networks, focused on delivering healthcare to assigned populations, where 80-90% of the healthcare services delivered will be on an outpatient basis. Retail store clinics, urgent care centers, outpatient emergency rooms are some of the current facilities being constructed as a result of this trend. The decline of the current in-patient focused hospital model is also transforming the construction and redesign of hospitals nationwide. Here’s one example of that at UNH Healthcare in Chapel Hill North Carolina.

2. THE RISE OF ACOs (Accountable Care Organizations)

ACOs are groups of providers that are held accountable for the care of defined populations of patients. The idea is that the providers within the ACO receive financial rewards for both improving the quality of care and reducing costs. The Affordable Care Act established this new, voluntary federal program for Medicare, and many private insurers have adopted the model. Over 600 Accountable Care Organizations (ACOs) are now operating in the U.S. Some of the “pilot” ACOs have found the evolution of their people, processes, and technology to attain efficiencies as an ACO are more difficult than expected, and some of these pioneer ACOs have dropped out or redefined their model. On the other hand, a recent study at Dartmouth Institute for Health Policy & Clinical Practice found that the many of the “pilot” ACOs that are physician-led are doing quite well. An ACO in Palm Springs FL is cited for being among the success stories.

3. PAYMENT REFORM CREATES NEW PLAYING FIELD FOR DEVICE MANUFACTURERS

Some device manufacturers are concerned that innovative medical technologies will be stalled due to reimbursement models that focus on pay-for-performance. Healthcare economists counter that assumption by saying it simply means that new technologies will have to be clinically relevant as well as operationally efficient to make them a viable purchase. To stay ahead of the curve, some manufacturers are forming partnerships to create evidence that demonstrates improved provider operational efficiency from the use of their new technologies. And venture capitalists agree with that strategy offering more advice for medical device startups.

4. FINES FOR HOSPITAL READMISSIONS AT RECORD HIGH

ACA (Affordable Care Act) rules impose fines for hospitals when patients are readmitted within 30 days of their discharge (for specified conditions). That rule has hospitals reassessing discharge protocols. Some are giving away free medicines; others assign nurses to follow up on patients in their homes a few days after they’ve been discharged. The fines associated with high readmissions can contribute to losing revenues and lowers hospital profitability. The bigger issue is the readmissions performance of each participating hospital is published to the public (medicare.gov), and this is “uncomfortable” for those hospitals that have high readmission rates. One source notes that some actions taken by some hospitals may not be the best pathway for the provider’s business. See the NPR article for full story.

5. PAYING PHYSICIANS BASED ON VALUE NOT VOLUME

In 2015, the health reform law calls for the government to begin a quality payment program for physician groups of 100 professionals or more, and that is to be expanded to all doctors by 2017. Physicians will see their payments modified so that those who provide higher value care will receive higher payments than those who provide lower quality care. Brush up on initial details of the Medicare reimbursement program here. For more on the implementation timeline, click here.

Doing business in the changing healthcare marketplace requires not just new skills but a new mindset. Healthcare reform and its sweeping changes require cultural transformation inside and outside of the business arena. We’ll keep you posted on the changes taking placing as well as how various players are succeeding and where they are falling short.

For more information about how Total Innovation Group, Inc. can help your organization evolve in a rapidly changing reform environment, download our eBook: 5 Ways Your Sales Process Must Evolve in the “New Normal”

by
Sam O’Rear