Daniel J. Marino
Daniel J. Marino

Nearly every aspect of the healthcare world is changing―constantly, unpredictably, and quickly. As stakeholders navigate their various paths, knowing what to expect can help with decision making about compliance, risk, cost, and more. We have identified 7 areas that healthcare leaders must navigate to stay ahead of change and remain agile, effective, and profitable.

1. Focus on Risk with Attention to Cost

The successful management of any risk-based contract must begin with a solid understanding of the patient population to be managed. It also requires understanding the potential of any population segment to drive outcomes down and costs up.

Organizing cohorts into high-, moderate-, and low-risk groups and developing analytics that identify members who may move to a higher risk pool is essential. The rising risk population can quickly and negatively affect the success of any risk- or value-based contract. The patients who are most likely to move from low or moderate risk to high―and drive the largest portion of spend―will provide opportunities for truly proactive and effective management. The creation and implementation of a management process for the rising risk population to maintain outcomes or, better yet, improve them, will help prevent that negative trajectory.

2. Development of Physician Leaders

For organizations to transform successfully to a value-based care (VBC) model, physicians will not only need to be involved, they will need to take the lead in supporting change in which care delivery plays a vitally important role. Physicians are recognized as natural problems solvers, trained to assess a situation quickly, make a diagnosis, and prescribe treatment. Historically, physicians moving into executive roles were often selected for their reputation and clinical skills rather than management experience. That has been changing, and it will continue to do so.

In a VBC environment, physicians must learn new skills to succeed as managers, as evidenced by the rise in the number of joint MD/MBA programs offered, often structured as five-year programs. The reality of healthcare today is that many challenges are as much about business as they are medical, and physicians must possess the same business acumen as those who have traditionally held administrative roles.

Return on investment (ROI), key performance indicators (KPIs), the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS), strategic alignment, and joint ventures will become as much a part of the physician leader’s language as that of diagnosis and treatment. Today’s physician leader must build trust among all stakeholders and serve as a differentiator who helps set himself or herself apart from the rest.

3. Focus on Analytics with an Eye on Digital Innovation

The significance of big data management is evolving with the shift to value-based reimbursement. Recently, the focus has largely been on extraction and aggregation of data from EHRs, but that is changing. Now, the focus on making data actionable across the continuum of care, and including multiple digital outlets is essential to positive performance in VBC. Big data can be utilized to drive operational outcomes and support strategic decision-making around investments, which will ultimately improve population health in the new VBC environment.

Patients are increasingly seeking convenient and personalized healthcare services outside of traditional care settings. Virtual care and digital interactions between patients and providers can provide multidisciplinary care teams access to the information that’s necessary to provide integrated care. Healthcare organizations must invest in the advanced technological tools required to provide the optimum patient experience.

4. Patient Access

New forms of access outside of the traditional primary care space are becoming more available and may be less expensive than a traditional office visit. These new access points are evolving but organizations, including commercial payers, are developing new ways to reach patients, manage simple healthcare needs, and reduce out-of-pocket expenses. Strategies developed through value-based purchasing are also reducing readmissions and offering merit-based incentive programs to improve outcomes and financial performance.

Efforts to prevent people from entering the system as acutely ill will eventually become even more crucial. Connecting patients to trusted primary care physicians helps avoid catastrophic events related to unidentified chronic illnesses with early detection and encourages compliance. These efforts reduce emergency rooms visits and unnecessary hospitalizations. Additional initiatives may include proactive outreach to segmented populations, urging them to register in a patient portal and participate in preventive care designed to identify and treat issues early.

In addition, the utilization of wearables and other home-based technologies will increase the data available to caregivers. More patients can be connected through smart devices to upload blood pressure and blood sugar readings, daily weight, etc., sending data in real time to primary care physicians, advanced practice providers, and nurses and pharmacists.

The primary care space is in the process of being split by new players and alliances, such as CVS and Aetna, Walmart, and others. The definition of primary care has expanded to include urgent and convenient care, as well as freestanding emergency centers, and this expansion will continue. Most people will remain covered by employer-provided insurance, but there is a significant number of people who self-insure or pay out of pocket. Price transparency will become more important to them as they shop around for treatment options that affect their healthcare spending. Healthcare systems and hospitals may need to partner with existing low-priced providers who are unburdened by high overhead costs to remain competitive for these ancillary and outpatient services.

5. Clinical Service Line Development

As more organizations enter into risk-based contracts, clinical service line development and optimization will become even more essential as a structure to help drive change throughout the organization. Although clinical service lines were originally developed to enhance hospital volume and improve integration, the trend toward risk-based contracts will drive these structures to do more. Many service line organizations are collecting data and measuring performance against evidence-based clinical protocols. The addition of financial data and, in some cases, performance in bundled payment contracts, can add new value to the service line structure.

A well-organized and managed service line can develop evidence-based protocols and metrics to measure performance and begin the process of developing real cost-based financial goals across those lines. Existing volume metrics will be enhanced by the addition of performance-based metrics and enhance strategies to reduce leakage. Identifying opportunities to include ambulatory services in a service line plan will provide new options, including the development of bundling and other episodic payment alternatives.

6. Compliance with Accountable Care Organizations

From a provider standpoint, the most important element in value-based care will continue to be the accurate capture of what’s occurring with patients and the services provided to them, as well as contributing factors that can drive risk. For example, a patient whose diabetes is largely under control but is also being treated for hypertension should be placed in a program that incorporates multiple-disease management. Proper documentation of this condition ensures accurate coding of the patient’s risk, which aligns with billing, that, in turn, aligns with overall compliance.

Capturing appropriate data will become even more important to the risk funnel, a trend that is largely being driven by the accountable care organization (ACO) population. As organizations move into ACO mode, this will help stakeholders understand these risk-based contracts fully, especially if they are supported by objective data. Coding and how documentation is exposed will drive a direct correlation between that activity and the risk level of any given population.

7. Bringing Down Costs to Get Closer to Medicare Rates

Structural changes in the industry include the shift to value, new competitors from nontraditional players, consumerism, and pricing transparency. All of these will pressure hospitals, health systems, and clinically integrated networks to reduce costs. This downward cost pressure has already resulted in many providers recognizing the need to develop and meet cost targets that enable break-even results at Medicare reimbursement rates.

Traditional cost-management techniques focused on labor productivity improvement, supply cost reduction, and lean process-improvement activities will continue, but more is needed to achieve a Medicare break-even cost structure. Enabled by new data and analytics, we will see further adoption of new cost-management approaches, including clinical variation reduction and care redesign, care management across the continuum, and service line consolidation. Hospitals, health systems, and clinically integrated networks will need to be creative in consolidating clinical programs, reducing leakage, and developing a care continuum that places patients in the “right” setting.

Moving Forward

Staying ahead in a game in which the rules change overnight requires players to stay nimble. The ability to create and adapt new information into actionable initiatives and communicate changes with partners, physicians, and patients is essential to success. Lumina Health Partners has the capabilities to assist in analyzing data in new ways and developing initiatives and infrastructure to execute and communicate across complex healthcare organizations.

Daniel Marino is managing partner for Lumina Health Partners. Fill out the form below to learn more about the top 7 healthcare trends.


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