GE Healthcare Camden Group Insights Blog

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

7 Managed Care Trends to Watch in 2016

Posted by Matthew Smith on Feb 5, 2016 11:13:56 AM

One month into 2016, it’s clear that this will be a year of massive change for the managed care industry. Here are seven predictions for some of the key issues that will emerge, intensify, or be resolved by the end of this year.

1. The impact of recent health plan mergers will come into focus

It is likely that the major payer consolidations will get sorted out this year. The big mergers are already starting to impact contract negotiations between the health plans and providers. As the larger health plan organizations continue to cut operating costs and slow the growth in reimbursement rates, providers will respond by consolidating to form larger and more integrated health systems. Expect the Federal Trade Commission to expand its examination of provider consolidations. Organizations that are consolidating must demonstrate both pre- and post-merger consumer benefit as a result of these affiliations or acquisitions. 

2. Value-based arrangements will gain more momentum

The industry is still waiting to see if the federal government will make a move on the “Cadillac” Tax, which Congress delayed for two years at the end of 2015. The question is, will Congress eliminate it all together? If they do not eliminate it, we can expect to see further benefit reductions and higher deductibles and coinsurances as employers focus on meeting the cost limits prescribed. The government and employers will continue to develop and implement new ways to bend the cost-curve. Health plans will double their efforts to create “value” or “high performing” networks that will offer narrower networks in exchange for lower premium and out-of-pocket costs to consumers. This will accelerate provider consolidation, either through mergers, affiliations, or clinically integrated networks as they attempt to offer a broader, yet differentiated, “high performing” network to the market. Once formed, these newly established networks will have to demonstrate value to attract employers and effectively move market share. Positioning your organization as the lowest cost leader in your market will not be enough; quality and patient experience and satisfaction must be met simultaneously.

3. Provider-owned health plans will gain more interest from health systems

Health systems that are continuing their transformation to clinically integrated networks will face more pressure to have more control of their reimbursement streams and incentive systems. As such, expect more providers to become interested in owning a health plan or collaborating with other providers who already own a health plan. In addition, there will likely be a shift in strategy from competing directly with large health plans to a “plan-to-plan” strategy, which will allow the integrated delivery networks (IDNs), clinically integrated networks, and health plans to collaborate more easily. Finally, some recently established provider-owned health plans have struggled, so new entrants will be more selective and cautious as they refine their market and product approach to this strategy. 

4. It will be an important year for health insurance exchange products

With the Affordable Care Act (ACA) insurance exchange products continuing to grow as we move into 2016, eclipsing the 8.8 million subscriber mark, a critical success factor of this ACA provision relies on insurers continuing to offer these products, despite incurring losses in the initial years. For instance, UnitedHealthcare Group’s 2015 annual earnings report showed that the insurer lost $720 million from exchange products, but will continue to offer and closely monitor the performance of those products throughout 2016. As a result, health systems should expect a continued increases in high-deductible plans (more bad debt on exchange accounts and a need for ever increasing focus on revenue management), and increased pressure on reimbursement rates as health plans continue to adjust these products to the newly insured’s needs and their own need for profits.

5. Consumer Operated and Oriented Plans (“CO-OPs”) will continue to lose momentum

An alarming 12 of the 23 health insurance CO-OPs have failed in roughly three years of existence, and the trend is expected to continue into 2016, as the 11 CO-OPs that remain operational—are all operating in financial stress. The ACA-led program, which was funded with $2.5 billion of taxpayer dollars, has shown an inability to compete on the exchanges with the large commercial health plans. The original intent of these plans was to increase competition on the exchanges, and lower premiums for consumers purchasing individual exchange products, but without sufficient capital in reserves, state insurance commissions have forced many to shut due to lack of solvency. In all, closures of CO-OPs have resulted in over 700,000 Americans losing coverage, and over $1 billion of taxpayer dollars lost to-date. With the CO-OP program deemed largely as a failure, the result is fewer options for health insurance coverage to individuals and businesses. Expect to see further CO-OPs failures in 2016, and ultimately, movement toward exiting the market.

6. Compliance will become an important issue in the coming years

Federal and State actions and fines will highlight the new oversight and conduct expected of health plans and providers. Physicians and networks who are working to take on greater risk and seek rewards by lowering or limiting the number of providers in networks will come under greater examination by the regulators and by health plans. Building compliance in early to every policy and action, and then monitoring any delegated service providers, and any activities with potential member harm, requires focus and action at every level of management and governance. Do not be surprised if compliance actions become ever more common.

7. Is capitation making a comeback?

Expect to hear more about capitation this year, thanks to the implementation of the Centers for Medicare & Medicaid Services’ (CMS) Next Generation ACO (NGA) program. Most of the provider participants in this program are organized, sophisticated and have significant experience in managing financial risk. In addition, many of the participants are already at risk for managing Medicare Advantage populations through capitation or other fixed payment methodologies. Although performance year 1 (calendar year 2016) in NGA is still a fee-for-service platform, some participants may be willing to learn from their experiences and take the plunge in later years and go at-risk through capitation. Expect CMS to highlight and regularly announce the efforts for these participants. NGA could be the program that begins to further shape the health plans thinking and approach to providers taking more financial risk.

In coming months, the greatest challenge for most healthcare organizations will be finding the right pace for adapting to or embracing new payment models. Most organizations are now seeing the direction, but will have to find the right pace and organizational commitment to continue through this industry-wide transformation.

Originally published by Managed Healthcare Executive, 1/31/2016. This article is reproduced in its entirety.  

Topics: Managed Care, Trends, Matt Briskin, Adam Medlin

Top Predicted Healthcare Trends of 2016

Posted by Matthew Smith on Jan 20, 2016 10:48:00 AM

The nation's healthcare system will undergo tremendous changes in 2016. While macro factors are at play, some of the greatest challenges will be finding ways to respond to new payment models, consumer expectations, as well as changing organizational operations, facilities, and culture to respond to population health strategies. Here's a look at the trends and factors that will have the greatest impact during 2016:

Macro Issues: A Changing Industry

  • The World is Shrinking. Consolidation is one of the biggest phenomena occurring in every arena of healthcare. While we can expect the regulatory approvals for the major payer transactions to be resolved during 2016, keep an ear to the ground for additional mergers. As the number of players shrinks, this will impact both payer and provider strategies, particularly in markets where the payer mix is already highly concentrated. In the provider realm, there will be additional eyes focused on these actions as the Federal Trade Commission will continue scrutiny of provider consolidations, including hospital and medical group acquisitions. "It will be essential to demonstrate direct consumer benefit related to efficiency, access and quality, both pre- and post-merger," said Laura Jacobs, president, GE Healthcare Camden Group. Watch for consolidation to take many forms -- not just asset mergers but many other types of affiliations and integrated relationships.
  • Innovation Will Rock the Boat. From technology, to new models of care, to new approaches to patient experiences, innovation will cause ongoing marketplace disruption. Private equity dollars will continue to flow into mobile technology, while new primary care delivery models and telehealth will offer different ways to engage consumers. In addition, retail giants like CVS and Walgreens/Rite-Aid will push further into care delivery, pressuring traditional providers to enhance access, change delivery models, and/ or forge partnerships to address this issue. At the same time, healthcare organizations will be required to enhance efforts to improve the patient experience far beyond measuring patient satisfaction -- the experience must be exceptional at every encounter -- from electronic to face-to-face visits.
  • Expansion and Redefinition of Health Systems. Health systems will continue to expand their physician enterprise, although many will be challenged by the financial strain of operating large employed models. Compensation redesign to move away from strictly productivity-driven models will be a priority. Expansion and merging of clinically integrated networks will continue, as a vehicle to align incentives in population health and value-based payment models, as well as minimize the need for "owning and controlling" the continuum. Expect ongoing development or expansion of provider-owned health plans as either a counterweight to the highly concentrated payer market or a means of taking global risk with payers or employers. Meanwhile, payers will extend their reach into the care delivery space, acquiring physician practices and clinical networks.

Follow the Money

  • Transparency and the Pocketbook. Pressures related to price and cost -- along with the adjacent need for transparency -- will drive more transformation. Consumer scrutiny will play an increasing role in this dynamic as high deductible plans force them to pay closer attention to price. As a result, lower-cost alternatives will have a competitive advantage. Because payer rate increases will be in the low single digits (if at all), any upside will require participation in some value-based payment, such as shared savings or pay-for-performance. In addition, thanks to the new budget bill, new provider-based clinics will not be reimbursed any more than physician practices. These pressures will continue to force more efficiencies across the continuum related to patient throughput and require operating cost reductions, moving from cost-per-unit to cost-per-episode basis.
  • The Variety Show: Value-Based Payments. Value-based initiatives may radically change referral patterns and the need for effective population health management. For an example, consider the 2015 introduction of the Comprehensive Care for Joint Replacement (CJR) model for Medicare -- with a roll-out in 2016. There is no way to predict how quickly new similar initiatives could strike your market. In addition, as employers introduce narrow networks to better control costs, some markets will experience acceleration of employer direct contracting. Further, the "foot in two canoes" analogy will have to change to recognize the proliferation of payment models beyond a strict definition of fee-for-service vs. fee-for-value. The cacophony of models ranging from strictly fee-for-service to pay-for-performance, care management/patient-centered medical home, bundled payment, shared savings/ACO, full or partial risk/capitation, and beyond will continue to add administrative, strategic, operational, and financial complexity to most organizations. Trying to make sense of this blend of payment structures from both a financial and care model perspective will cause more confusion before the fog clears.
  • Increased Focus on Post-Acute Care. The spotlight will shine on post-acute care, thanks to population health management models and bundled payment. We'll see the emergence of "preferred" networks of providers providing these services, as well as repurposing acute care facilities to meet the needs of post-acute patients. More transactions involving post-acute providers -- home health, skilled nursing, rehabilitation, hospice ­-- will create increased upheaval in this realm of healthcare.

Inside the Walls

  • Patient Volume: The Seesaw Effect. Changing dynamics in the healthcare system will have a give-and-take impact on patient volume. While new payment models will decrease acute hospital utilization, the continued expansion of Medicaid and the insured population through the public exchanges will push additional patients through the doors. Additional factors feeding demand across the spectrum include an aging population and the ongoing rise of obesity and chronic disease. Although urgent care, better care management and redesigned primary care models will eventually deflect patients from the emergency department, the ultimate impact of these initiatives will take a while, requiring these areas of hospital to operate at (or over) capacity.
  • The People Factor. Change cannot occur without effective leadership, leading to an increased demand for clinical leaders who can help drive transformation. Participation in population health management will increase competition, as well as cost, for these capabilities. At the same time, there will be leadership turnover as mergers/consolidations occur and as systems evolve from "holding company" to "operating company" models (and sometimes back again). Finally, be on the lookout for union activity, which may be sparked in some regions due to cost pressures and reductions in force.
  • The Makeover. As administrators "rationalize" clinical service lines, they will strive to reduce variation in quality and cost across health systems. Physician alignment with these moves will be crucial. Simultaneously, consolidations and mergers will spawn a new wave of facility planning to repurpose or enhance the efficiency of existing structures.
  • The Rise of IT and Turf Wars. One area where capital will continue to flow: IT tools and resources. The need for new structures for data governance within health systems will be driven by the proliferation of population health tools and analytical systems. And in a related development, watch for a tug-of-war between CIOs and business unit leaders. Turf battles may ensue on selection of systems and data management.

Topics: Trends, Post-Acute Care, Value-Based Payments

Looking Ahead in 2016: Top 10 Trends in Healthcare

Posted by Matthew Smith on Jan 6, 2016 3:56:21 PM

By Laura P. Jacobs, M.P.H., President, GE Healthcare Camden Group

While some current trends will continue into 2016, keeping pace with local market changes will require foresight and nimble leadership. Watch for these potential change “accelerators” for 2016.

Consolidation The major payer consolidations likely will get ironed out during 2016. The degree to which your payer market is already highly concentrated will affect your payer strategy, but watch for additional consolidation and its potential effect. Furthermore, the Federal Trade Commission will continue to scrutinize provider consolidations, including hospital as well as medical group acquisitions. The degree to which any anticipated affiliations or acquisitions truly achieve consumer benefit in terms of efficiency, access and quality must be clearly demonstrated both pre- and post-merger.

Government, commercial payer and employer move to value-based payment  As illustrated by the Centers for Medicare & Medicaid Services' introduction of the Comprehensive Care for Joint Replacement model for Medicare, there is no predicting how quickly certain initiatives could strike your market. Also, employer direct contracting will pick up in some markets as employers introduce narrow networks to control costs better. These initiatives can radically change referral patterns and the need for effective population health management.

To continue reading this article in its entirety, please click the button below to immediately access the article on the Hospitals & Health Networks website.

2016 Healthcare Trends, GE Healthcare Camden Group

Topics: Trends, Laura Jacobs, Care Model Redesign, Value-Based Payments

Top 10 Trends and Implications for Medical Groups in 2015

Posted by Matthew Smith on Jan 27, 2015 2:23:00 PM
By Mary Witt, MSW
Senior Vice President, The Camden Group

016_healthcare_consultant.juSuccess in 2015 requires clear thinking and decisive action. Whether independent or hospital/system-owned, medical groups cannot continue to do business as usual and expect to succeed in 2015. Increasing financial pressures, the move to fee-for-value, and increased expectations for quality require new ways of doing business. Here are the top 10 trends for 2015 that can provide direction and focus as medical groups plan for the year ahead.

1. A focus on performance optimization is necessary for success. Medical groups can no longer be satisfied with median performance. Medical groups that are not pushing themselves to excel will find themselves left behind as top performers emerge and gain market dominance. Also, as financial pressures increase for hospitals and health systems, they will no longer be able to sustain the high losses experienced by many hospital-owned medical groups. It is critical that medical groups assess their performance as compared to industry best practices and implement a performance improvement plan to address any deficits. To sustain forward momentum, medical groups should establish clear accountabilities for performance throughout the medical group by creating measurable performance standards, continually measuring performance against targets through the use of dashboard reports, developing action plans to address variances, and incorporating performance expectations into job descriptions.

2. Patient collections cannot be ignored. With the increase in high deductible plans and patient copays, medical groups are seeing a significant increase in the dollars owed by patients. Therefore, an effective patient collection process that starts when the appointment is scheduled is critical to ensuring that all revenue owed is collected. When the appointment is scheduled, patients should be informed of copay and deductible amounts as well as outstanding balances, and the expectation that payment is due at the time of the visit should be established. Time of service collections should include collection of all monies owed for the services provided that day as well as any outstanding balances.

3. 2015 brings increasing competition from nontraditional organizations. New, non-traditional competitors are entering the outpatient medical care market. Retail firms such as WalMart, Walgreen’s, CVS, and RiteAid have created primary care clinics; while some have partnered with local providers, more often they have created their own clinics or partnered with national firms. Target and Kaiser Permanente have developed a partnership to provide primary and specialty care in clinics in Target stores that will be open to nonKaiser enrollees. Payers such as Anthem California are marketing e-visits directly to their enrollees bypassing the traditional in person physicianpatient relationship. Partnering with non-traditional organizations is an option that should be assessed as well as considering non-traditional practice locations. It is important to understand what patients want and expect of the practice to retain them. Regularly survey patients about their experience with the practice; consider the use of focus groups to gather more in-depth data on what is important to them.

4. Physician compensation models require redesign. As medical groups prepare for fee-for-value payment, increasing competition, and a focus on quality, there is likely a need to redesign their compensation model to better align incentives with the new environmental realities. What worked in the past is unlikely to work in the future. It is important to understand how quickly the market is shifting from fee-for-service to value-based payment in order to determine what needs to be changed and how quickly it needs to happen. Medical groups will want to develop a road map to broaden compensation incentives to prepare for fee-for-value payments. Consider adding incentives for care coordination, quality, and efficiency in addition to productivity. Initially, it may make sense to devote a small percentage of compensation to these new metrics to prepare for the future if the market is not demanding immediate change.

5. Transparency is becoming increasingly important. The era of transparency in cost and quality is here. Payers are publishing provider charges by Current Procedural Terminology (“CPT”) code; CMS has published Medicare payments made to physicians. Employers are demanding price transparency, especially as they move to high deductible plans and pass more cost on to their employees. States are creating multipayer pricing databases based on payer claims data and providing access to consumers. Many new websites enable consumers to shop price and quality. Quality is being tracked more vigilantly, and quality scores are readily available to the consumer through a variety of websites. With all of this data available, it is important that medical groups understand how their pricing and quality compare to their competitors and take action to ensure that high prices and poor quality do not cost them patients.

6. Mastery of technology cannot be ignored. Medicare demands that medical groups report on quality or face penalties, and payers increasingly link payments to quality reporting or results. Therefore, medical practices need to be able to collect, analyze, and exchange data. Also, as expenses increase, and operational demands become increasingly complex, the ability to automate work is critical to improving efficiency. New care models increasingly rely on real-time access to patient clinical data as well as access to tools such as telemedicine or health monitoring devices. Effective use of technology to improve results is a necessary element for future success. Evaluating current work flows and looking for inefficiencies (e.g., duplicate data entry, multiple handoffs) can lead to identifying opportunities for automation. Explore the use of telephone technology to automate tasks such as appointment and payment balance reminders. Participate in a health information exchange that provides two-way communication and clinical results with hospitals, referring physicians, and other health providers. Use an electronic health record to assist clinicians in the care of their patients; the use of real-time prompts assists physicians in performing preventive services and informs them when test results are outside of normal.

7. Managing a population of patients requires new care delivery models. Managing a population of patients requires a change in how care is delivered. The focus is no longer on episodic care, but instead focuses on managing the total healthcare needs of a population of patients. The emphasis shifts to “providing the right care at the right time in the right place.” Redesigning care involves transforming both how care is delivered and who delivers the care. Re-examine roles within the practice to ensure that everyone is working to the top of their license/expertise. Successful management of a population of patients requires an expanded team approach to care. New care team members can include advanced practice clinicians, care managers, social workers, pharmacists, nutritionists, and health coaches with leadership and direction provided by the physician. Reexamine the workflow in the office to assure that as the care model evolves, the work flow is adapted to facilitate efficient use of space and staff. Explore the feasibility of using e-visits, tele-health, and group visits to improve access, responsiveness, and maximize patient engagement. Consider the operational and financial feasibility of implementing Medicare’s newly reimbursed chronic care management.

8. Patient engagement leads to better outcomes. Patients actively engaged in their care have better outcomes and utilize fewer health resources. In order to maximize patient engagement, medical practices must move from telling patients what to do to assisting them to develop the knowledge, skills, and confidence necessary to be an active partner in their care. Train physicians and staff on communication skills and motivational interviewing and integrate expectations into physician and staff performance expectations. Ensure that patients are actively engaged in discussing their health and developing their care plan. The use of patient portals can be an effective means of maintaining communication with patients and monitoring their adherence to care plans.

9. Patient demand for access is not going away. Thus, ensuring timely patient access has to be a medical group priority if the practice is to have satisfied patients. To understand patient access, routinely monitor third next appointment availability. Calculate the practice’s patient demand versus practice capacity, and implement strategies to increase capacity as needed. Consider allowing patients to schedule their own visits through a patient portal, providing evening and weekend hours, offering e-visits, and communicating by email and text. Practices should also employ strategies to facilitate regular communication with their patients through e-mail blasts, texting, and social media.

10. Physicians will continue to move toward the employment model. As the complexity of medical practice and economic pressures increases, and the demand for capital for practice infrastructure (e.g., electronic health record, care team staffing) grows, more physicians are choosing to become employed, and that trend is likely to accelerate over the next few years. This provides opportunities for existing medical groups and hospitals/health systems to add physicians to their practices as they seek to capture a greater population. To ensure a successful employment relationship, medical groups and physicians both need to clearly define their goals and expected outcomes and then develop a set of criteria to guide decisions as opportunities are considered.

As medical groups grapple with the many challenges of 2015, it is important to focus on optimizing performance and preparing for value-based reimbursement by meeting the needs of patients efficiently and effectively. Concentrate on how to create a strategic advantage by establishing capabilities or attributes that will distinguish your group from competitors. In difficult times like these, superior, nimble, focused performance will lead to success.

Mary Witt, The Camden Group, Physician ServicesMs. Witt is a senior vice president with The Camden Group and has over 25 years of healthcare experience. She has held management positions in hospitals, health systems, and management services organizations (MSOs). She has extensive experience in medical group and integrated delivery system development and management. This includes developing patient-centered medical homes, practice management, performance improvement, physician compensation, managed care, strategic planning, healthcare marketing, and physician recruitment. She may be reached at mwitt@thecamdengroup.com or 424-201-3971.


Topics: Clinical Integration, Population Health, HIT, HealthIT, Mary Witt, Medical Group, Medical Groups, Clinically Integrated Networks, Physician Compensation, Patient Engagement, The Camden Group, Trends

Infographic: Trends in Healthcare Payments

Posted by Matthew Smith on Nov 20, 2014 2:55:00 PM

Healthcare Cost, Revenue Cycle, PaymentsThe healthcare payments industry is changing rapidly due to consumerism and regulatory mandates, according to the fourth annual Trends in Healthcare Payments Report by InstaMed. Patient payments to providers have increased 72% since 2011 due to these market forces.

InstaMed's new infographic based on the report looks at how patient provider payments are changing administrative requirements by providers, the need for payment plans and how credit card and mobile will impact provider payments in the future.

To view a full-size version of the image, below, please click here.

Payment Trends, Health Directions

Topics: Infographic, Revenue Cycle, Healthcare Payments, Trends

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