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The healthcare industry is experiencing the most change

The healthcare industry is experiencing the most change that it has seen in the last 60 years. The combination of electronic medical record, ICD-10, the impact of the Affordable Care Act (ACA) on healthcare entities and its uncertain future is not only a significant operational shift but a tremendous financial impact as well. The top issues that keep us up at night are the financial stability and sustainability of our healthcare industry, our health coverage and payment infrastructure as well as the unforeseen impact of implementing initiatives such as Hospital Presumptive Eligibility without significant planning and forethought.

Responding to pressure to contain skyrocketing costs, healthcare providers and policymakers have begun to dramatically change how care is delivered and paid for. Under the ACA and other policy changes, provider reimbursements are shifting to reflect the value of care rather than volume. Hospitals and health systems are looking for ways to lower readmission rates, administer higher-quality care more efficiently and, as always, do more with less. Education of patients/consumers will be critical to success of most, if not all, of our cost saving initiatives.

The impact of technology has made health care consumers more savvy customers. Many people research their diagnoses and treatment options online before even speaking to a provider. The healthcare market has become increasingly competitive and commercialized. Providers must utilize technology to educate as well as compete for their market share. As the use of technology such as telemedicine increases, consumers will have greater access to healthcare options outside of their locale. Our coverage and payment infrastructure is not designed for a dramatic increase in healthcare delivery across multiple states in different regions of the country. Although healthcare delivery is advancing rapidly with technology, our infrastructure is still very behind as is evidence by the repeatedly delayed ICD-10 implementation. Most of the Marketplace health plans, commercial HMO plans, and state Medicaid plans, which are the most affordable for consumers, often limit consumers to in-state provider networks for all but emergency services and recovering reimbursements for those emergency services can still be extremely difficult.

As healthcare delivery becomes more specialized and consumers seek out the experts in a particular treatment area, the coordination of healthcare delivery becomes even more difficult. With hospitals, urgent care centers, physician practices, ambulatory centers, clinics, and laboratories utilizing differing technology to track and monitor treatment and payment the “coordination of care web” we weave becomes even more intricate. There is an increasing need for more technology innovation surrounding coordination of care and reimbursement.

Healthcare has been significantly impacted by implementation of the ACA. We’ve seen a decrease in uninsured and an increase in reimbursed services. Some of the less transparent impact has been the increase in patient liability for high deductibles and coinsurance, the increased resources required for authorization and billing for MCOs, HMOs, and new Marketplace plans, and the impact on state funding to hospitals based on actual and perceived changes in payer mix. Another example is Hospital Presumptive Eligibility (HPE) which enables hospitals to provide temporary eligibility for Medicaid to patients. While this is a valuable tool for hospitals, it also has operational implications that can be a nightmare if not mitigated when planning to implement. HPE will also negatively impact state Medicaid funding as far too few individuals are following up with the full MA application to secure the federal matching funding. When seeking a remedy to cut cost, states often look to hospital reimbursement for recoupment. Given that this eligibility is provided at Hospitals at a time when the highest costs are being incurred, the financial risk is even greater. A primary care or ambulatory setting may have been a more appropriate avenue for the states to administer this program, as the costs and risk would be lower. It would also be another means to drive patients to lower-cost care rather than encouraging them to come to hospital emergency rooms. Unfortunately, states do not have this option as the federal guidelines specify hospitals for this program, so it is more important for hospitals themselves and individual states to evaluate and plan to mitigate the risks when implementing.

History has evidenced that those who fail to plan, plan to fail. With the ever changing landscape of healthcare, technology and the laws around how services are reimbursed, there are many challenges facing the industry moving forward. Our success is predicated on our ability to anticipate, absorb, and adapt to the changing landscape of healthcare. This is an exciting time full of opportunity for those who plan to seize it.

Godlee Davis & Andy Foland
GreenScreen Managing Partners