Changing Healthcare Landscape and What is Needed

By Karthik Ganesh, Founder & Principal Consultant at Aikya Strategies

While there has been a dramatic shift in the healthcare industry landscape over the last 8 years, outside of certain pockets we continue to see more of the same…which is disappointing. With healthcare’s primary issues being cost, access and quality, the multiple factors that have been in play over the last 8 years include:

·     Introduction of healthcare exchanges.

·     Expanded payment models in 2010 as a result of ACA, including bundled payments for certain episodes of care and the creation of Accountable Care Organizationsqa.

·     Continued call for a shift from a volume-based system to one that is based on care quality.

·     2014 missive from the Obama government that 50-90% of all payments should be value-based by 2018.

·     Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) as the means to change the quality payment methodology for Medicare providers.

Other Complicating Factors

While all these changes were absolutely the right things to push forth, here are the results or other factors that have been in play:

·     The healthcare insurance exchanges became an access play and did nothing for the cost or quality of care. It also made payers feel like they were being progressive and innovative without actually challenging them to think differently about their business model.

·     Payer consolidation strategies and associated M&A deals have frozen payer investments and markedly slowed down their push towards being a more active enabler of this move from volume to value.

·     Provider consolidation continues in the hope that bigger is better from a margin management standpoint. This distracts from any meaningful value-based care strategy.

·     Medicare FFS rates continue to get squeezed and physicians are feeling commensurate pressure from commercial payers as well.

·     Meaningful Use and ICD-10 put additional technology related pressure and costs on provider organizations and independent physicians.

·     Less than 30% of Medicare ACOs actually generated any kind of savings

·     The patient panel for a physician keeps getting riskier based on our evolving demographic – 10K people are turning Medicare eligible every day; dual eligible (Medicare & Medicaid) population continues to grow faster than any other aspect of the healthcare book; according to the WHO, 1 out of 3 Americans is clinically obese

Bottom line – it is an extremely tough time to be a physician or provider organization

What do key stakeholders need to do more of?

Payers – We have seen payers take some definitive steps towards embracing value-based care. This has included a move towards FFV payments with varying levels of adoption of the 50-90 mission and from some payers we’ve seen the creation of separate legal entities focused on supporting the provider’s VBC strategies. Not quite enough though.

Payers need to move forward from doing more of the same and make significant investments in taking provider collaboration to another level. These investments should not be from a traditional payer lens in terms of engaging their membership, but rather needs to be focused on improving the all-important patient-provider relationship. Essentially payers need to make it easier for their members to engage with their providers as patients. The best way payers can make their case for improved healthcare is by being very supportive as providers embark on a payer-agnostic path for population health. Payers can do this by making their data accessible and consumable…especially since claims data will always be the most important aspect of the healthcare data continuum.

Providers – Over the last 8 years with all the changes that providers have encountered the majority have automatically assumed technology would be the silver bullet. They have purchased population health management technologies without taking a step back to assess their strategy, gaps and path forward. Population health management without a viable practice transformation strategy is akin to assuming all racquetball players automatically make good tennis players since both are racquet sports. Larger provider groups, hospitals and health systems need to make a more concerted move towards actual clinical integration and ensure being a payvider is on their strategic roadmap. Evolving into a payvider is the only way providers are going to overcome their revenue maximization challenges. Providers also need to find themselves a trusted partner to lead them on their value-based care journey. The relationship with the payer will always be too contentious to drive a 100% trusted partnership, so the provider should partner with the numerous entities that are being created to support multi-payer strategies.

Health IT Vendors – The population health management technology space is getting too overcrowded. As against coming up with more “me too” solutions, Health IT vendors need to be putting their heads together to truly optimize the health data integration challenge. Providers have already made investments and swapping them out to introduce monolithic solutions isn’t a good answer. What is needed are more scalable technology ecosystems, let’s call them “health IT power-strips” that allow the new population health solution to coexist with the provider’s existing technologies and with the ability to plug in payer technologies as well. Having this singular power-strip will ensure the provider doesn’t need to constantly swivel between technologies and can truly maximize the power of data collaboration and consistent workflows and population analytics.

Patient – Finally, the most important stakeholder of all, the patient. Patients need to be stronger advocates of their expectations from the healthcare system, including their provider and payer. Patients have been jerked around for far too long and as a result don’t really engage with the healthcare system the way they do with other servicing entities. Consumers today spend more time on their smart phones on non-call related activities, but yet there are no patient engagement mobile applications in the marketplace with an adoption rate greater than 10%. Of course, the numbers can be made to look better based on creative accounting, but the broader point is that consumers don’t feel they are taken seriously enough by the healthcare system and see it as a necessarily evil in the event they fall sick. Patients need to force their payers and providers to engage with them differently and hold them to higher standards for collaboration. The best way to usually get this done is through their employer.

If the true goal at the end of the day is better healthcare for all, there need to be some very marked shifts across the key stakeholders in this industry. We are at an important juncture as an industry and need to take some decisive steps forward, collectively.