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GE Healthcare Camden Group Insights Blog

Webinar OnDemand: New Approaches to Capacity Optimization and Command Centers

Posted by Matthew Smith on Mar 2, 2017 11:17:31 AM

This webinar, hosted by the Association of Academic Health Centers and presented by GE Healthcare Camden Group, University of Michigan Health System, and The Johns Hopkins Hospital, focuses on innovative, forward-thinking approaches that two leading Academic Health Centers have undertaken. Specifically, the goals for these organizations include the improvement of patient flow and the optimization of capacity to achieve measurable outcomes, including designing and implementing a first-of-its-kind Command Center.

Using both systems as case studies, the speakers share their experiences, challenges, and successes with achieving capacity transformation without expansion, as they enable the transformation needed to thrive as an AHC of the future.

Speakers

Bree Theobald, Vice President, GE Healthcare Camden Group

Jennifer Naylor, Senior Consulting Manager, GE Healthcare Camden Group

Mary Martin, MPA, Associate Hospital Director – Surgical Services, University of Michigan Health System

James Scheulen, PA, MBA, Chief Administrative Officer for Emergency and Capacity Management, Johns Hopkins Medicine

To view the webinar, please click on the button below and complete the short form. The webinar will launch in a new window. 

Capacity Optimization, Command Centers

Topics: Webinar, Capacity Command Center, Capacity Management

GE Healthcare Included in Fast Company's "Top 10 Innovative Companies in Health"

Posted by Matthew Smith on Feb 13, 2017 1:42:10 PM

GE Healthcare is featured as one of Fast Company's Top 10 Innovative Companies in Health of 2017. As part of the magazine's World's Most Innovative Companies ranking, the Fast Company reporting team reviewed thousands of enterprises searching for those that tap both "heartstrings and purse strings" and use the engine of commerce to make a difference in the world.

From Fast Company:

GE Healthcare works with partners ranging from the University of California San Francisco to Johns Hopkins to develop both hardware and software technologies that solve some of the most pressing problems in health care. Some are drawn from health systems; for example, UCSF needed a partner to develop machine learning algorithms for medical imaging, and Johns Hopkins needed a NASA-style command center to better manage patient flow in and around the hospital. Early results from Johns Hopkins have been promising: The hospital has reported a 60% improvement in the ability to accept patients with complex medical conditions from other hospitals around the region and country; its ambulances are able to get dispatched 63 minutes sooner to patients at outside hospitals; and its emergency department is assigning patients to beds 30% faster.


To learn more about The Johns Hopkins Capacity Command Center, watch this short video and click on the links to Modern Healthcare and Health Facilities Management, below.

 

To speak to the GE Healthcare team about Capacity Command Centers, please click the button below:

Capacity Command Centers

 

Topics: Hospitals, Hospital Operations, Command Center, Capacity Command Center, Capacity Management, Hospital Occupancy

Is Your Board Prepared for These 10 Trends?

Posted by Matthew Smith on Feb 6, 2017 12:53:13 PM

By Laura P. Jacobs, MPH, President, GE Healthcare Camden Group

Boards need to focus on healthcare delivery transformation — and keep their eyes peeled for changes in federal law

The past few years have been tumultuous for most health care organizations as payment models, competition, regulatory changes, clinical advances, digital and information technology, and workforce trends have created the need for rapid transformation in just about every area of healthcare delivery and management. Layer on top of that uncertainty about the future of the Affordable Care Act, and 2017 should be another watershed year for healthcare.

So, has your organization discussed and developed responses to these 10 trends?

1. An uncertain reimbursement landscape

The degree to which reimbursement models will change in 2017 remains uncertain. Given the recent double-digit rise in premiums on the ACA's Health Insurance Marketplace, or exchanges, and calls for the redesign of Medicaid and Medicare, as well as commercial insurance regulation, we should expect an active year of debate in the federal and state ranks. The move to fee for value and expectations for efficiency and data-driven outcomes are not likely to abate. Also likely to be encouraged is consumerism, with a greater focus on health savings accounts and health reimbursement accounts, high deductibles and price transparency.

What trustees should keep their eyes on: federal and state legislative and regulatory changes. Financial plans for 2018 and beyond must consider the impact of higher deductibles, possible increases in bad debt, and even greater transparency on price and outcomes. Expect payer-mix shifts as the health insurance landscape responds to federal (and state) legislative changes.

2. Payment models continue to shift to value

With Medicare as a bellwether, payment models are increasingly reliant on measures of performance (e.g., hospital-acquired conditions, readmissions, patient experience and quality scores). There is no indication that this movement will stop. Medicare Advantage plans are likely to continue to see double-digit growth in enrollment, and, in some cases, health plans may seek risk-based arrangements with providers for these products.

The Medicare Access and CHIP Reauthorization Act of 2015 will have significant effects on the physicians in your market. While the Centers for Medicare & Medicaid Services is allowing different paces of entry, the bottom line is that physician payment will increasingly be dependent upon quality, patient experience, use of electronic health records and resource utilization. This may be the last straw for some smaller practices that don’t have the infrastructure to report the required metrics. Even if your market hasn’t yet experienced risk-based (e.g., downside risk, capitation or percentage of premium) models, private commercial carriers are emulating many of the CMS models, including accountable care organizations, pay for performance and bundled payment.

The lines between payer and provider will continue to blur, as payers acquire or provide services to providers and providers become payers. In some markets, regional health systems have moved into the payer marketplace — often as a Medicare Advantage plan or a plan to cover the health system’s own employees — to create competition and affordable options for their consumer base. Some payers will be increasingly open to partnerships with providers in launching new health plan products or delivery models. We will also likely see more large, self-insured employers reach out to providers as employers seek performance-based payment models to drive lower total health costs and better outcomes.

Overall, one of the most difficult challenges for healthcare organizations in 2017 will be harmonizing population health strategies with the market’s movement to value-based payment; moving too fast or too slowly in this area will challenge financial performance. This, along with a general uncertainty in the health care marketplace, will require astute and nimble financial planning.

What trustees should keep their eyes on: payer trends and the organization’s payer mix; the health system’s payer strategy and readiness for (and results with) performance-based payment; initiatives to help physicians respond to MACRA requirements; potential partnerships with payers or large employers to offer new products.

3. Pressure to reduce costs

Hospitals in general have experienced relatively stable financial performance over the past year or two — for some, even better than expected. In many cases, this has been a function of fairly strong volume, particularly in outpatient services. But the marketplace is putting pressure on payers — and thereby providers — to further reduce costs.

With higher employment rates, coupled with expanded coverage for individuals through the ACA, yet continued primary care shortages, emergency department volume is high. This can put pressure on inpatient capacity, operating room schedules and care management resources.

Pressure to reduce costs because of lower rate increases from payers means that managing patient flow efficiently, and reducing variation through defined workflows and clinical protocols are both critically important for a health system if it wants to achieve or maintain financial sustainability. Ensuring that precious resources like hospital beds and operating rooms are optimally utilized is also important to avoid making potentially unnecessary capital outlays for new bed towers or surgery centers. Some leading hospitals are exploring capacity-command centers that combine systems-engineering principles, commonly seen in complex industries such as aviation and power, with predictive analytics to manage and optimize patient flow, safety and experience.

It also is critical that the health system physician enterprise, which in most cases operates at a loss, optimizes physician time and aligns compensation models with goals and population health strategies, as well as engages in rigorous clinical performance management.

What trustees should keep their eyes on: changes in volume; hospital costs (labor and nonlabor) compared with industry benchmarks; length of stay; episode of care (diagnosis-related group) costs compared with Medicare rates; performance benchmarks of employed-physician practices.

4. Creating 'systemness'  

Many health systems have grown in recent years — vertically, horizontally and geographically. The opportunities to create a seamless patient experience, achieve efficiencies, enhance access to capital, promote innovation and optimize population health management are among many of the reasons for this growth. To realize these goals requires the harmonization of multiple cultures, operating mechanisms, IT and approaches to governance. To accelerate “systemness,” some systems will move from a “holding company” model to a greater degree of integration — across governance, management and clinical systems. Creating a single brand experience for consumers and employees will require a systemwide articulation of and focus on every aspect of care delivery across the continuum, including clinical and administrative functions.  

What trustees should keep their eyes on: a well-defined health system vision and strategy that guide decision-making on growth and system development; a system integration plan that establishes a governance and management structure to reinforce the desired goals, culture and brand; a disciplined and focused approach to achieve desired efficiencies and clinical integration.

5. The consumer is king

Health care has traditionally not been very consumer-friendly. But with deductibles set to increase again in 2017, as well as new disrupters in both the digital and care delivery spaces, providers will have to pay closer attention to the consumer experience (beyond the “patient” experience). This means price transparency; access where, when and how the patient desires; quality reporting; a social media strategy; and digital outreach to create consumer awareness and loyalty. All these will be increasingly important in 2017 and beyond.

Patient-focused care must be more than a stated value. It must be actualized through physical space, logistics, communication and approach to care.

What trustees should keep their eyes on: market share measured by share of the population, not by use of inpatient beds; the health system’s branding and consumer strategy, including dealing with price and quality transparency and a consistent consumer experience across the continuum and locations.

6. Care everywhere

With the explosion of mobile technology, and applications for home and self-monitoring, not to mention the expansion of urgent care and retail care centers, 2017 will be another year of evolving care models. Private equity–backed as well as employer-backed new models for primary care and complex care, and digital tools will continue to proliferate. Health systems will have to decide whether to partner, adopt or compete with these new entities and models.

Telemedicine will be used increasingly not only for remote rural areas but for the convenience of consumers who would prefer not to leave their home or office for care. This means competition could come from anywhere accessible by smartphone. Home and self-monitoring will be used to help make care for the elderly and other patients with complex conditions more responsive, as well as avoid costly hospitalizations.

What trustees should keep their eyes on: your organization’s strategy for accessible care delivery, including the use of urgent care centers, retail clinics, employer-based clinics, mobile technology, telemedicine and home monitoring. Consider partnerships to accelerate market entry and success in new areas.

7. Analytic tools and digital medicine

Most health systems have implemented at least one electronic health record (some are on their second or third implementation) and also have invested in a plethora of other IT tools for finance, data warehousing, care management, predictive analytics, disease management, scheduling and so forth. The key in 2017 will not necessarily be what the next IT purchase should be (although there will be many of those still) but how these systems work together to optimize decision-making and forward-looking actions.

Having a clear data governance structure and system architecture focused on what operational and clinical outcomes are required will be essential. Furthermore, emerging artificial intelligence (e.g., IBM Watson) and the “internet of things” (digital equipment communicating with other equipment) will begin to change the roles and responsibilities of health care providers and team members as well as care pathways.

What trustees should keep their eyes on: creating a digital and analytics road map that optimizes systems and IT platforms already in place and identifies gaps to guide future purchases; understanding the role of artificial intelligence and digital equipment as health care delivery evolves.

8. Health care cost drivers

While inpatient and physician care still account for the majority of health care costs, pharmacy costs have been increasing at a faster pace than they have and will likely continue to do so in 2017.

Behavioral health will also come into increasing focus, because individuals with mental health disorders often have higher medical costs and greater use of emergency departments. Yet, reimbursement for behavioral health is generally poor, and access to providers is often lacking. This is a particular concern with the Medicaid and Medicaid/Medicare dual population, for whom behavioral health problems often are untreated and socioeconomic conditions such as lack of housing or nutrition can exacerbate health risks. The social determinants of health will be raised more frequently as factors to be considered in population health programs, requiring health systems to connect with community service organizations to drive better outcomes and better health for at-risk individuals.

What trustees should keep their eyes on: your organization’s strategy for behavioral health; creating partnerships or relationships with community service providers as a means of improving the health status of the population.

9. Clinical advances will march forward

Precision medicine based on the genetic profile of an individual will be more accessible to more people but will still be used in only a minority of cases. Cancer care is the early adopter. But watch this trend — it could accelerate fast.

New 3D printers will enhance the ability to replace organs and tissues but will still largely be tested in research labs — for now.

Robotics will continue to be used in operating rooms but will also find a place at the bedside — for lifting or moving, or even interacting with, patients.

Mobile technology, as already noted, will continue to explode, enhancing the ease with which diagnosing, monitoring and treating patients occurs.

All this will require astute assessment by medical staff for the adoption of new approaches, and academic medical centers may find expanded opportunities to partner with community providers in the research and deployment of new clinical treatment options.

What trustees should keep their eyes on: medical staff policies and approaches to reviewing biotechnology and clinical protocols; understanding the role of emerging medical trends in key service lines.

10. Human capital needs are changing

In an industry in which labor costs still comprise the lion’s share of operating expenses, workforce management has always been paramount. Today, with the role of the health system changing as population health and value-based care models take center stage, the roles and responsibilities of clinicians and nonclinicians are also changing.

Generational differences demand different approaches and even policies in human resource management.

Health care workers, including clinicians and nonclinicians as well as the management team, are increasingly facing burnout due to constant change and ever-rising expectations.

New approaches to recruitment, talent development and training, workforce management, and engagement will be required to optimize your most valuable resource — your people.

What trustees should keep their eyes on: potential workforce shortages as unemployment rates continue to drop; understanding the organization’s workforce development and management plan and ensuring it is responsive to changing roles, responsibilities and expectations.

Strategic Planning in Uncertain Times


Jacobs.jpgMs. Jacobs is president at GE Healthcare Camden Group and has been with the firm since 1990. She has more than 30 years of experience in the areas of integrated delivery system development, payer strategy, population health management, healthcare strategic and financial planning, transactions, and governance/ management systems. She is a noted speaker and industry resource on the impact of healthcare trends, most notably the requirements for success in value-based payment models, clinical integration, and creating successful integrated delivery systems. She may be reached at laura.jacobs@ge.com. 

Topics: Trends, Laura Jacobs

Five Focus Areas for Medical Groups in 2017

Posted by Matthew Smith on Jan 26, 2017 12:59:09 PM

For medical groups, the last few years have been tumultuous with the shift to value-based care. In 2017, medical groups will continue to experience change on all fronts, including payment, care delivery, and interaction and communication with patients. Medical groups must contend with new payment models, fierce competition in their markets, increased regulatory requirements, clinical advances, digital and information technology changes, and population health management implementation.

In response to these shifts, medical groups should focus on five key areas to position themselves for the future. As Socrates said, “The secret of change is to focus all of your energy not on fighting the old but on building the new.” And that is what medical groups need to do in 2017: build the new by transforming the old ways of practice management.

To read this article in its entirely, please click the button below to be taken directly to the HFMA website.

Medical Groups, 2017 Trends

Topics: Population Health, Medical Groups, Patient Access, Trends, Medical Group Transformation

Top 10 Trends for 2017: Twists and Turns Ahead!

Posted by Matthew Smith on Jan 19, 2017 1:31:54 PM

By Laura P. Jacobs, MPH, President, GE Healthcare Camden Group

No one can say that the healthcare landscape is boring – and 2017 may be an especially interesting ride. Repeal/Replace? New transactions? Impact of digital? How will consumers behave? Who will the new disrupters be? How will population health models evolve? Who will merge with whom? The year will bring incremental changes in a variety of arenas, and it could deliver monumental shifts in other ways. Here’s how we size up the top trends and the related management imperatives to succeed:

1. Repeal, Replace, or Revise

The fate of the Affordable Care Act (ACA) is still uncertain, but regardless there will be changes to which healthcare organizations must respond. Major changes to Medicare, Medicaid, and individual coverage may not take effect in 2017, but financial planning will take heightened importance to identify potential scenarios for ensuing years. High deductible health plans and HSAs, price transparency, and continued focus on affordability will put pressure on providers to deliver value in order to win.

2. The March to Value Continues

Regardless of the specific changes that may come with changes to the ACA, payers (Medicare, Medicaid, employers, and commercial insurance carriers) will continue to seek ways to lower costs and improve the experience for patients. The Centers for Medicare & Medicaid Services (CMS) will continue to link payments to performance on a variety of outcomes (e.g. hospital-acquired conditions, readmits, value-based measures). The Medicare Access & CHIP Reauthorization Act of 2015 (MACRA) will have significant impact on physician reimbursement, and as a result will galvanize integrated delivery systems, physician networks, and medical groups to implement efficient ways to demonstrate quality, patient experience, effective use of electronic medical records, and overall efficient resource utilization. Medicaid is moving to managed care in many markets, and commercial carriers and employers will continue to emulate many of the CMS payment models: ACOs, bundled payment, pay-for-performance.

The lines between payer and provider will continue to blur, as payers acquire or provide services to providers (note Optum’s [United Health Group] recent announcement of its purchase of Surgical Care Affiliates [SCA], a leading ambulatory surgery center and surgical hospital provider). With the expected growth of the Medicare Advantage market, providers will evaluate their role as partners or competitors with payers in this space. We expect to see more joint venture or partnership arrangements between payers and providers to launch new health plan products or delivery models. We will also likely see more large, self-insured employers reaching out to providers seeking performance-based payment models to drive lower overall health costs and better outcomes.

Harmonizing your population health strategies with your market’s pace of movement to value-based payment may be one of the most important strategies for your organization: moving too fast or too slowly could challenge both market position and financial performance.

3. The Cost Imperative

While value-based payment models require healthcare organizations to demonstrate quality and patient experience outcomes, the predominant focus is still on cost. With governmental budget pressure, employer pressure on commercial premiums, and in some markets highly consolidated payer dynamics, providers will continue to be challenged to reduce costs and find new efficiencies in the delivery of care. The focus for providers will be to redesign patient throughput, reduce variation through defined work flows and clinical protocols, and optimize use of existing facilities. Capital preservation will be as important as operating expense management to sustain or improve financial performance. Some leading hospitals are developing capacity command centers that combine systems engineering principles, commonly seen in industries such as aviation and power, with predictive analytics to manage and optimize patient flow, safety, and experience – and avoid costly outlays for new bed towers or surgery centers. Bottom line for healthcare leaders is that traditional ways of reducing costs (across the board spending cuts or layoffs) will not create the sustainable cost or quality advantages that will be necessary to succeed either in the short- or long-term. This means re-engineering the process of care across the continuum, engaging clinicians in every aspect of redesign, and imbedding a culture that supports effective change management become increasingly critical.

4. Let’s Make a Deal

Consolidation will continue across the industry. Payers will continue to consolidate as a result of continued premium pressures and the need to defray infrastructure costs. Provider transactions in every form will continue to be active in the year ahead: hospitals, surgery centers, physician groups, post-acute providers, population health “enablement” companies, technology companies , and others will come together in a variety of combinations. Organizations will seek partnerships to serve larger populations, acquire business expertise in a new area, and find efficiencies. With some organizations at a peak in their expansion or acquisition activity, 2017 will also be a critical time to focus on integrating the components that have been acquired or merged. Unless a concerted effort is put in place to identify, structure, and activate an integration plan that is designed to realize the intended goals, many organizations may find they have over-reached or cannot achieve the expected benefits of the expansion.

5. Consumerism Continues to Strengthen

Healthcare has traditionally not been very consumer-friendly (arcane billing practices and charges, hard to make appointments, fragmented care, access on the provider’s terms and so forth). But with deductibles that will increase again in 2017, as well as new disrupters in both the digital and care delivery space, providers must pay closer attention to the consumer experience – whether or not they have actually been a “patient” yet. This means price transparency, access where, when, and how the patient desires, quality reporting, a social media strategy, and digital outreach to create consumer awareness and loyalty will be increasingly important. Determining the definition and attributes (not just the logo) of the health system’s “brand” must carry through all venues of care, whether the consumer uses an app, a website, a phone, or an in-person visit to interact with the organization.

6. Care Everywhere

Care models will continue to evolve in 2017 thanks to the explosion of mobile technology, applications for home and self-monitoring, and the expansion of urgent care facilities and retail care centers. Private equity-backed as well as employer-backed new models for primary care, complex care, and digital tools will continue to proliferate. Telemedicine and “video-visits” will become more widely used – to improve access to complex care for remote areas as well as to provide greater convenience for consumers who would prefer not to leave their home or office for care. As an example, more than half of Kaiser Permanente’s patient visits are done virtually. Competitors will not be limited to those physically located near or in your service area; the new competitive dynamic will include those that can reach your population by cell phone or the internet. It will be imperative that management establish its access strategy and consider all of the tools available as care is being redesigned.

7. Capitalizing on Digital

After making significant investments in electronic medical records and a plethora of other information technology tools – financial systems, data warehousing, care management, predictive analytics, disease management, scheduling, and reporting among them – there’s a rallying cry to convert this mass of data points into actionable information. The call to action now is not necessarily what the next IT purchase will be, but how will the systems that have been purchased co-exist and even work with one another to optimize decision-making and forward-looking actions. The hospital, filled with “smart” equipment and systems, can be characterized now as a complex data “organism.” True transformation will come when organizations utilize artificial intelligence (AI) and the “internet of things” (digital systems “talking” to each other) to optimize patient flow, productivity, clinical decision-making, and the role of clinicians and other care team members.

8. “Outside the Box” Healthcare Cost Drivers

While inpatient and physician care still account for the majority of healthcare costs, pharmacy costs have been increasing at a faster pace, and will likely to continue to do so into 2017 and beyond. There is a rising focus on behavioral health, as individuals with mental health disorders often generate higher medical costs and greater use of emergency departments. With reimbursement for behavioral health still lagging, providers in this space will see increased demand, but will likely struggle financially unless avenues for reducing costs through care redesign or changes in reimbursement are effected. Population health programs will increase their focus on impacting the social determinants of health, as the impact that areas outside of healthcare (housing, nutrition, transportation) have on health status gains greater awareness. This will require health systems to determine how to optimize relationships with community service organizations to drive better outcomes and better health for at-risk individuals.

9. Clinical Advances Continue

Health systems such as Geisinger Health System are making headlines with their use of DNA sequencing on patients to help refine care protocols and interventions. We will see other examples of the expansion of precision medicine, using an individual’s genetic profile, although it will remain fairly limited in the near term. The Cancer Moonshot and other initiatives funded by the 21st Century Cures Act will provide an impetus for speeding up clinical advances and the introduction of new drugs in the years ahead. Watch for the use of robotics in situations both inside the operating room and at the bedside: lifting, moving, and even interacting with patients. Watch for 3D printing to augment the availability of organs for organ replacement. Academic medical centers and research institutes will have opportunities to partner with technology companies as well as community providers to explore and evaluate medical advances. Venture funding for monetizing intellectual property will continue to flow to those initiatives that make healthcare more cost effective and produce reliable outcomes.

10. Managing the Most Precious Resource

Human capital needs are changing. Workforce management is and will remain of paramount importance as the healthcare world evolves. With labor costs comprising the lion’s share of expenses, it makes sense from a purely financial perspective. But with today’s lower unemployment rate, and demand for many key roles in healthcare outstripping supply, healthcare organizations must prioritize workforce management as a cornerstone to change management and operational excellence. Generational differences demand different approaches and even policies in human resource management. Healthcare workers, including clinicians, non-clinicians, as well as the management team are increasingly facing burn-out due to constant change and ever-rising expectations. New approaches for recruitment, talent development and training, leadership coaching, and workforce management must be embraced as roles, responsibilities, and expectations evolve.

Managing an organization through these changes will not be any easier in 2017 than it was in the past years. Keeping an eye on the horizon, while staying attentive to the buffeting winds on all sides will allow healthcare leaders to maintain perspective and stay focused on making the tough decisions necessary to remain aloft. 

Strategic Planning in Uncertain Times


Jacobs.jpgMs. Jacobs is president at GE Healthcare Camden Group and has been with the firm since 1990. She has more than 30 years of experience in the areas of integrated delivery system development, payer strategy, population health management, healthcare strategic and financial planning, transactions, and governance/ management systems. She is a noted speaker and industry resource on the impact of healthcare trends, most notably the requirements for success in value-based payment models, clinical integration, and creating successful integrated delivery systems. She may be reached at laura.jacobs@ge.com.

 

Topics: Affordable Care Act, Obamacare, Trends, Mergers & Acquisitions, Laura Jacobs, Healthcare Data Analytics, Healthcare Consumerism

2017 Brings Continued Transformation to Healthcare, Driving Innovative Approaches, Solutions, and Experiences

Posted by Matthew Smith on Jan 17, 2017 12:51:21 PM

In an industry now characterized by constant change, 2017 will bring continued transformation to the nation’s healthcare system. Our annual outlook for the coming year forecasts the trends related to the likely changes to the Affordable Care Act ("ACA"), adoption of value-based payer models, and emerging consumerism will drive a greater need for cost reduction and innovation. Here’s a look at the trends and factors that will impact the system during the coming year:

Macro Trends

A number of significant macro trends are at play, driving the need for change. These include:

  • U.S. healthcare costs are rising faster than inflation.
  • U.S. healthcare expenses per capita have been historically low compared to the previous few decades; however, those costs are expected to rise over the next few years.
  • There have been cumulative increases in health insurance premiums and workers’ contributions to premiums compared to the rate of inflation and the rise in workers’ earnings.
  • Between 2014 and 2060, the size of the population age 65 and older will have more than doubled to 98 million.

Consolidation in Many Forms

  • Mergers and acquisitions among providers will continue and expand on an even grander scale as regional players, as well as large, multi-state systems, such as Dignity/CHI, explore the benefits of consolidation. The need to serve larger populations to succeed in risk-based payment models has prompted many systems to join forces. Expect statewide or multi-state population health collaboratives or joint-ventured population health service organizations. "In addition, traditional healthcare providers will seek endeavors with experts in urgent care, retail medicine, outpatient surgery, post-acute care, occupational health and digital health to take advantage of ‘best in class’ care and business expertise. Some systems will discover they have over-extended, or need to pause and integrate what they have acquired, formed, or merged into," said Laura Jacobs, MPH, president, GE Healthcare Camden Group.
  • Similar dynamics will impact the payer landscape. Regardless of whether the Federal Trade Commission approves mergers between Anthem/Cigna and Aetna/Humana, many markets may have more limited insurance options. With the uncertainty in the future of Health Insurance Marketplace or insurance exchanges, given expected changes to the ACA, payers will carefully weigh the benefits of offering select products market by market. In addition, as Medicaid shifts to managed care in many markets, experienced payers, such as Molina Healthcare, are increasing their national footprint. Medicare Advantage payers rated less than four stars will experience increasing difficulty to compete, resulting in growing membership in the higher-rated plans.
  • Finally, the lines between payers and providers will continue to blur. In some markets, regional health systems have moved into the payer marketplace -- often as a Medicare Advantage plan or a plan to cover the health system’s own employees -- to create competition and affordable options for their consumer base. Some payers will be increasingly open to partnerships with providers in launching new health plan products or delivery models.

Payment Models: Focus on Value

  • Regardless of the specific changes that may come with changes to the ACA, payers (Medicare, Medicaid, employers, and commercial insurance carriers) will seek ways to lower costs and improve the experience (quality and satisfaction) for patients.
  • With Medicare setting the trend, payment models have shifted to include performance measures, based on factors such as hospital-acquired conditions, readmissions, patient experience and quality scores. Bundled payments are still being pursued by commercial carriers, and, for now, Centers for Medicare & Medicaid Services ("CMS").
  • The Medicare Access & CHIP Reauthorization Act of 2015 ("MACRA") will have a significant impact on physicians, while CMS allows different paces of entry. These changes mean that physician payment will depend more on quality, patient experience, use of electronic medical records and resource utilization. Even in markets where risk-based models (downside risk, capitation or percentage of premium) are not yet practiced, private commercial carriers have adopted CMS approaches, including models such as accountable care organizations, pay-for-performance, and bundled payments. As a result, this will require smaller physician practices to seek assistance to report required metrics – or join larger practices or systems that have the required infrastructure.
  • Overall, one of the most difficult challenges for healthcare organizations today and for 2017 will be harmonizing population health strategies with the market’s movement to value-based payment; moving too fast or too slowly will affect financial performance.

Cost Drivers: Pharmacy and Behavioral Health Under Scrutiny

  • While inpatient and physician care account for the majority of healthcare costs, pharmacy costs have been increasing at a faster pace, a trend that is likely to continue into 2017.
  • The new year also will bring a greater focus on behavioral health. Because individuals with mental health disorders often have higher medical costs and tend to use emergency departments more frequently, behavioral health also will engender greater scrutiny. This is a particular concern with the Medicaid and dual Medicaid/Medicare population, when behavioral health is often untreated, or other socio-economic conditions, such as lack of housing and poor nutrition exacerbate health risks. Social determinants of health will be raised more frequently as factors to consider in population health programs, requiring health systems to connect with community service organizations to drive better outcomes and better health for at-risk individuals.

 Cost Reduction: The Pressure Is On

  • Many hospitals have experienced relatively stable financial performance over the last couple of years -- some, even better than expected due to a rise in volume, particularly in outpatient services. Yet other issues will come into play moving forward. Higher employment rates and expanded coverage for individuals through the ACA have increased demand at the same time the nation is experiencing primary care shortages. High emergency department volume will place increased pressure on inpatient capacity, operating room schedules and care management resources.
  • Lower rate increases also amp up the need to reduce costs. Facilities must manage patient throughput even more efficiently and reduce variation through defined work flows and clinical protocols. Precious resources, like hospital beds and ORs, must be optimally utilized to avoid potentially unnecessary capital outlays for new bed towers or surgery centers. Some leading hospitals are exploring capacity command centers commonly used in complex industries such as aviation and power. These initiatives combine systems engineering principles with predictive analytics to manage and optimize patient flow, safety, and experience.
  • The physician enterprise, which in most cases operates at a loss, must be managed to optimize physician time and align compensation models with goals and population health strategies.

Innovation: Delivering New Experiences and Approaches

  • Consumers will exercise more leverage, forcing providers to focus on the “consumer” experience – not simply the “patient” experience. This concept encompasses physical space, logistics, communication, and an organization’s approach to care. As systems expand, this means providing a consistent consumer experience across the continuum and locations. Rising deductibles will contribute to increasing selectivity, as will new disrupters in the digital and care delivery space. Issues to focus on include price transparency; access -- where, when, and how the patient desires; quality reporting; social media strategies; and digital outreach to create consumer awareness and loyalty.
  • Care models will continue to evolve in 2017 thanks to the explosion of mobile technology, applications for home and self-monitoring, and expansion of urgent care facilities and retail care centers. New digital tools and approaches to primary and complex care will emerge, backed by private equity and employers. One component of this trend, telemedicine, will expand beyond rural areas into the mainstream for the convenience of consumers who prefer not to leave their home or office. Home and self-monitoring will provide more responsive care to the elderly and other patients with complex conditions. These dynamics expand the geography of competition, which could arise from anyplace accessible by cell phone. To remain competitive, health systems will have to partner with entities providing these options, adopt them, or devise their own solutions.
  • After making significant investments in electronic medical records and a plethora of other information technology ("IT") tools -- financial systems, data warehousing, care management, predictive analytics, disease management, and scheduling among them – there’s a new dynamic at play. During 2017, healthcare systems will focus on getting these systems to work together to optimize decision-making and forward-looking actions. It will be essential to have a clear data governance structure and system architecture focused on required operational and clinical outcomes.
  • Looking ahead, artificial intelligence (for example, IBM’s “Watson”) and the “internet of things” (the way digital equipment “talks” to each other) will change the roles and responsibilities of healthcare providers and team members, as well as care pathways.
  • Expect additional traction on noteworthy clinical advances:
  • Precision medicine based on the genetic profile of an individual will be more accessible, particularly for cancer care, but not yet mainstream. But watch this trend; it could accelerate rapidly.
  • 3D printers will enhance the ability to replace organs and tissues, but for now remains largely in the province of research labs.
  • Robotics will continue to be used in operating rooms and will begin moving to the bedside, lifting, moving, or even interacting with patients.
  • Academic medical centers may discover expanded opportunities to partner with community providers to research and deploy new clinical treatment options.
  • In an industry where labor costs still comprise the lion’s share of operating expenses, workforce management has always been essential. Today, the responsibilities of clinicians and non-clinicians are also changing as health systems transform in response to population health and value-based care models. Generational differences and job burnout from constant change and rising expectations will require new approaches to recruitment, talent development and training, workforce management, and engagement.

Topics: Payment Models, Care Model Redesign, Healthcare Transformation, M&A, Healthcare Innovation

Top 10 Considerations for Strategic Planning in Uncertain Times

Posted by Matthew Smith on Jan 3, 2017 2:19:57 PM

By Laura P. Jacobs, MPH, President, GE Healthcare Camden Group

Healthcare has entered a period where confusion and uncertainty will be the overarching context, where the performance challenges and financial pressures on organizations will mount, and where more constant and ever-present change will be the new normal. With healthcare policy, insurance coverage, and economics headed for change with a new administration, coupled with the already turbulent healthcare environment, many healthcare leaders are concerned about how to develop reliable strategies for the future. Is effective strategic and financial planning even possible with so many variables up in the air? Yes, and one could argue it is even more critical to have a clear path forward during unsettled times. Here are 10 considerations for strategic planning in times like these:

  1. Stay true to your mission and vision. When your organization established its mission and vision, they were meant to be statements of the long-term purpose and role of the organization. The mission describes why the organization exists, and the vision establishes the destination. While a changing environment may require adapting strategies or refining tactics and action steps, staying focused on the long-term destination is especially important when approaching headwinds. If a “refresh” of the vision is required, do so with a long-term lens, based on how your organization can best meet the intent of its mission.
  2. Don’t panic. This is not a time to allow inertia to overtake the organization. It could be helpful to re-evaluate the variables that could affect your results – Medicaid coverage, commercial insurance coverage, reimbursement rates, etc. – but many of these things won’t change overnight. Like an airline pilot encountering unexpected weather ahead, it is important to reassess your approach based on current information. But a lack of forward momentum can result in a mid-air “stall” for your organization – from which it could be hard to recover. Another reason to remain calm and adhere to the core principles of your organization and its mission.
  3. Focus on the “knowns.” While there are many things we don’t know about specific federal and state policy changes ahead, we do know many things that are unlikely to change. The imperative to reduce costs and deliver value and reliable outcomes, the aging of the population and the complexity of caring for multiple chronic conditions, rising consumer expectations for access and a better experience, the increasing number of disrupters that are poised to provide alternatives to traditional delivery, and the continued advancement of medical biotechnology and information technology are just a few of the trends that are not abating any time soon. Further, there will still be legacy competitors and new entrants in your market that will be striving to take market share and improve their position at your organization’s expense. Once you take stock of the things that are NOT changing, creating a strategic direction will be less daunting and will create the framework for moving forward.
  4. Engage all stakeholders. Most strategic planning processes include a method for obtaining input from the organization’s key stakeholders:  board members, medical staff, management, community members. In times like these, make sure that you have the pulse of employers, payers, and other healthcare entities with which you may interact such as FQHCs, post-acute providers, or behavioral health providers. Non-healthcare entities such as retail or technology providers may also provide good insight. Understanding the potential direction and actions that all related entities may take will allow you to have a more complete view of the variables for which you may need to be prepared. Furthermore, involving these parties in your planning process will enhance their ownership of the plan and their participation in its implementation.
  5. Refresh your financial plan. This is equivalent to checking your fuel gauge before take-off. With the possible need to divert your route, it is important to know the resources required and capacity to withstand downturns within your financial position. Be sure to take an objective view of your current state, including understanding the ability to withstand lower reimbursement rates, higher interest rates, or changes in payer mix. It may also be helpful to model the likely financial impact of federal and state policy changes on your organization, such as possible reductions in Medicaid coverage, should those come to pass.
  6. Conduct rigorous scenario planning. With an integrated strategic and financial planning process, your organization can “pressure test” various scenarios. The scenario planning will help evaluate the impact of various financial, marketplace, and other variables in your planning assumptions. This will help identify the areas of greatest risk, and prompt the identification of actions to mitigate those potential risks for inclusion in your strategic plan.
  7. Avoid “herd” mentality. Your strategic planning process must reflect yourorganization’s situation and mission. While it is important to learn about how others are responding to the current healthcare environment, it is also important to chart a path that is individualized for your organization. It is even more critical to identify how your organization will be distinctive, based on its culture, capabilities, resources, and current position. A strategic plan that defines how that distinctiveness will be cultivated and nurtured requires setting clear priorities and considering approaches that your competitors or those featured in industry journals may not have considered.
  8. Stay close to your market. Keeping an ear to the ground regarding local market conditions is especially important when so many variables have the potential to change. Are new disrupters – new delivery models, new technologies, new or growing competitors – making an impact in your market?  Are new payers or are local competitors changing the way they develop and pay their provider networks?  How is your state responding to changes that may be made to Medicaid or insurance exchanges?  Having knowledge of national trends is important to learn what could impact your market; being sensitive to local market conditions will allow your organization to apply those learnings in a meaningful way.
  9. Develop an organizational navigation system. While the strategic plan will provide clarity on the goals and priorities for the organization given the assumptions and expectations made at the time, it is also important that the planning process consider how the organization will absorb information and create alerts when a new route may be required. Just as your GPS system can provide alerts when there are traffic situations ahead and suggest alternative routes, your organization must develop its own ability to respond to changing conditions and still get to the desired destination.   Some organizations have found that having a “rolling” strategic planning process, that allows the plan to be refreshed each year, is the best way to keep the roadmap current. Keeping the strategic plan front and center as part of board discussions will also assure that you are continuously testing assumptions and assuring the relevancy of your plans.
  10. Communicate and activate the plan. In uncertain times, it is ever more important to assure that the strategic plan is well understood throughout the organization. Demonstrating that leadership has considered all internal and external factors and developed a clear path forward will go far in building internal confidence and focus. The absence of a well-articulated and communicated plan raises the risk of an explosion of potentially conflicting initiatives, as nervous management or physician leaders react to uncertainty by taking matters into their own hands. The final step in the planning process must assure that the strategic plan is fully activated:  translated into management goals, including accountabilities and timeframes; integrated with the budgeting process; and is a cornerstone of board discussions.

In uncertain times, it is the most resilient and agile organizations that succeed. To create resilience requires having a solid foundation that a well thought and thoroughly constructed integrated strategic and financial plan provides. To optimize its effectiveness requires that the organization use the plan as it would a GPS navigation system:  know your destination, know the resources and capabilities available before you leave, be alert to changes in conditions ahead, make sure the driver and its passengers are aware of the route, and be agile and ready to make course corrections as new information is absorbed.

 Strategic Planning in Uncertain Times


Jacobs.jpgMs. Jacobs is president at GE Healthcare Camden Group and has been with the firm since 1990. She has more than 30 years of experience in the areas of integrated delivery system development, payer strategy, population health management, healthcare strategic and financial planning, transactions, and governance/management systems. She is a noted speaker and industry resource on the impact of healthcare trends, most notably the requirements for success in value-based payment models, clinical integration, and creating successful integrated delivery systems. She may be reached at laura.jacobs@ge.com.

Topics: Hospital Strategy, Laura Jacobs, Strategic Planning, Healthcare Strategy

10 Do’s and Don’ts for a Smart Transaction as a Healthcare Provider

Posted by Matthew Smith on Dec 15, 2016 11:22:35 AM

By Brian Hackman, MBA, MSIS, ASA, Manager, GE Healthcare Camden Group 

Many, if not most, healthcare organizations have been involved in a transaction with another business entity within the past several years, whether with a physician practice, outpatient center, hospital, or health system.2014 and 2015 saw record numbers of healthcare M&A transactions, and the desire and pace of healthcare organizations to complete deals will likely remain strong even in light of the recent presidential election results.

Now more than ever, it’s important to reemphasize the fundamentals of a successful transaction. Below is a list of ten “do’s” and “don’ts” for a smart transaction as a healthcare provider. In the current environment, it is imperative that healthcare organizations properly prepare and execute a prudent transaction process. Otherwise, a lot of time, money, and attention can be diverted from managing core business operations.

Do

  1. Identify a strategic vision for the transaction. A strategic vision lays the groundwork for the transaction. Be able to articulate and defend the vision of the transaction and the environmental factors and business rationale leading to it. Draft a post-transaction governance, transaction, and organizational structure and outline any preliminary terms and conditions. Finally, confirm the transaction is consistent with your strategic plan. Two questions to contemplate: (1) Does the transaction better position the organization for a value-based environment and (2) does the transaction add a competency or resource necessary to succeed?
  1. Seek an independent, third party to perform a business valuation and anti-trust assessment. Transactions in the healthcare industry involve a number of legal, regulatory, and tax considerations. By engaging with an independent third party, you gain a greater level of assurance that the purchase price is fair. It also limits your exposure to potential compliance and regulatory issues (i.e., Stark Law, Anti-Kickback Statute), and provides proper documentation if ever audited by a governing body, such as the Centers for Medicare and Medicaid Services, the Internal Revenue Service, or the Federal Trade Commission. Outside counsel to inform potential anti-trust or other regulatory risks is also crucial.  A market assessment to determine the potential market impact, as well as potential consumer benefits of the transaction should be performed to assure that all parties are informed of the opportunities, requirements of the transaction, as well as potential risks.
  1. Complete thorough due diligence. The purpose of the due diligence phase of a transaction is to gain a greater understanding of your target company. Use this process to research and evaluate any potential issues, liabilities, or concerns. An analysis of the target company typically includes, but is not limited to, a review of its operations, such as revenue, expenses, volume/productivity, and coding and documentation; its finances, including the cash flow and strength of the target’s balance sheet; and any legal considerations, including pending litigation that could impact future profitability. In addition, pay keen attention to the cultural fit between the two organizations. If the cultures are too divergent, or the cultural integration is back-burnered until after the transaction, it is unlikely that a deal will work out. Depending on the findings of the due diligence, it may be necessary to renegotiate the proposed structure of the transaction. Don’t be afraid to walk away from the transaction if the risk profile of the target company exceeds the risk tolerance of your organization.
  1. Develop internal financial projections. Based on the information provided during the due diligence process, develop financial projections for the target company or combined entity. It is likely these internal financial projections will differ from those generated during the business valuation, as the projections will incorporate contract rates from your organization and any prospective synergies to be gained from the transaction, which the business valuation may not include. Depending on the type of transaction, a business plan of efficiencies (“BPOE”) can be a useful guideline to articulate where and how operational and structural efficiencies will be created. Use these financial projections to understand the impact of the transaction on your current financials and cash flow. These are also good ways to measure future performance versus targets. Calculate the return on investment to ensure it is consistent with your organization’s goals..
  1. Understand the impact of the transaction on your balance sheet. Take into account and plan for how the transaction will affect your balance sheet. Will the transaction be financed with cash, debt, or a combination of both, and what are the advantages and disadvantages of each? How will the purchase price be allocated on the balance sheet? Be sure to understand how or whether the transaction will impact any debt covenants or key balance sheet ratios, which can influence your credit rating.  

Don’t

  1. Be bewitched by the shiny rock. At some point, an opportunity may arise to pursue a transaction with a top organization in your market. At first glance, the concept of joining forces may be compelling. However, in this situation, it is particularly critical to follow the steps outlined above and evaluate the financial and operational merits with clarity and objectivity. Ensure it isn’t too good to be true and really is in the best interest of the organizations and their patients.
  1. Buy into overly optimistic integration synergies. Rosy projections can make any potential transaction seem like a no-brainer. Run various scenarios (e.g., expected, best case, and worst case) to test the primary assumptions or question the main drivers of the projections for reasonableness. It is advisable to hash out and understand the operational and financial risks during the due diligence process rather than after the transaction closes.
  1. Assume the integration process will be 100 percent seamless. While the transaction process can be long and time consuming, don’t assume that once the transaction closes, the hard work is over. In fact, the hard work is just beginning. The integration of two organizations can involve numerous operational and cultural hurdles, including blending corporate cultures, information technology systems, human resource systems, operating mechanisms, etc. Successful integration requires thorough pre-transaction planning and consistent ongoing communication. Consider employing change acceleration processes to facilitate the integration process.
  1. Lose focus on what you do well. Most organizations typically have a small number of core strengths. Acquiring business lines outside of this portfolio of expertise can sometimes dilute management’s ability to run each efficiently. In such situations, a higher level of due diligence may be required to ensure you have the internal capability to manage that business line. If not, consider bringing in outside expertise through a management services agreement or hire the required talent from outside. Alternatively, consider other types of transactions, such as joint ventures or joint operating agreements, where the day-to-day management can be handled by partners who specialize in that particular space.
  1. Engage in this process alone. Outside third party expertise can help ensure a higher probability of success. Form a team of advisors to create a sounding board for your thoughts and ideas. Legal, financial, and operational support can not only mitigate potential compliance and regulatory risks, but also assist in validating the rationale for the transaction to the various stakeholders in the respective organizations. Post-transaction, advisors can help navigate the inevitable challenges that will arise during the integration process.

Hackman.jpgMr. Hackman is a manager with GE Healthcare Camden Group and specializes in healthcare finance. His focus includes fair market valuations and strategic planning for both nonprofit and for-profit healthcare organizations. He also has experience in reimbursement analysis, service line planning, and financial forecasting. He may be reached at brian.hackman@ge.com.

 

 

 

Topics: Hospital mergers and acquisitions, Mergers and Acquisitions, Brian Hackman, M&A

Two New Hospital Command Center Articles Highlight Increased Efficiencies in Patient Flow and Facility Operations

Posted by Matthew Smith on Dec 7, 2016 12:22:01 PM

Two recently published articles showcase the new Judy Reitz Capacity Command Center at the Johns Hopkins Hospital in Baltimore. Designed and built by GE Healthcare Partners, the Command Center takes a page out of the aerospace and aviation industries by combining the latest in systems engineering, predictive analytics, and problem-solving to better manage patient flow in and through the hospital and other operations.

A story featuring the implementation of the Johns Hopkins Wall of Analytics appeared recently in the Innovations column (print edition) of Modern Healthcare. Command Centers Help Manage Flow highlights how command centers bring together patient-flow decision makers and equip them with data and analytics to help them prepare for surges and avoid delays in care.

To read this article on the Modern Healthcare website, please click the button below. Current Modern Healthcare nonsubscribers may register for free. Upon registration, viewers will have access to 12 free articles every 30 days.

Command Centers, Wall of Analytics,

Likewise, Command Center Leads to More Efficient Facility Operationswas recently published by Health Facilities Management. This article delves into some key areas of operational improvement and highlights results already realized, including:

  • Patient transfers. There has been a 60 percent improvement in the ability to accept patients with complex medical conditions from other hospitals around the region and country.
 
  • Ambulance pickup times. Johns Hopkins’ critical care team is now dispatched 63 minutes sooner to pick up patients from outside hospitals.
 
  • Emergency department flows. A patient is assigned a bed 30 percent faster after a decision is made to admit the person from the ED. Patients are transferred 26 percent faster after they are assigned a bed.
 
  • Operating room transfers. Delays from the operating room after a procedure have been reduced by 70 percent.
 
  • Patient discharges. Twenty-one percent more patients are now discharged before noon compared with that of last year.

To read this article in its entirety, please click the button below to be taken immediately to the Health Facilitites Management website:

Command Center, Capacity Management, Operations


To request more information or to contact the GE Healthcare team about Capacity Command Centers, please click the button below:

Capacity Command Centers

Topics: Command Center, Capacity Command Center, Facilities Operations, Patient Flow

Infographic: 10 Things to Know About MACRA

Posted by Matthew Smith on Dec 2, 2016 1:57:48 PM

Our colleagues at Athena Health created the infographic, below, to help providers and medical practice professionals understand the complex MACRA mandate and resulting payment adjustments. 

Why settle for a neutral or small positive adjustment in 2019? Why not GO BIG with MIPS in 2017? Earn an exceptional performance-positive adjustment on top of the possible payment adjustment of up to 4%.

CMS is funding a pool of $500 million for exceptional performers who achieve a final score of 70 points or higher. With a final score between 70 and 100, (subject to the application of a scaling factor by CMS), eligible clinicians would receive a payment increase above 4% in 2019.

In addition to the positive adjustment, Going BIG would promote your clinicians’ social reputation (Physician Compare) and accelerate the shift towards value--including future participation in Advanced Alternative Payment Models.

Are you ready to Go Big and be an exceptional performer in 2017?

  • Have you successfully reported PQRS in previous years and on track in 2016?
  • Have you successfully attested to the EHR Incentive Program (Meaningful Use)?
  • On your Quality and Resource Use Report (QRUR), do you compare favorably?
  • Are you ready to move toward value-based care?

If you answered yes to these questions, you're already on your way. 

Let GE Healthcare Camden Group help you reach your MACRA potential and maximize your MIPS payments. To get started, simply click on the button below and one of our MACRA experts will contact you.

MACRA


MACRA Infographic.jpg

Topics: Infographic, Healthcare Infographics, MACRA, MIPS

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