In our 2016 health care trends article, we anticipated trends that would influence the trajectory of health care and the implications for hospitals and health care providers. Those trends included health insurance, cost containment, the rise of new payment methodologies, technology, analytics, investment, and industry consolidation. These trends certainly gathered momentum throughout the year, and we expect that momentum to continue into 2017 and beyond, with some qualifiers.
2017 will usher in a new president and congressional majorities. More than anything, this has led to significant speculation and uncertainty regarding the future of the Affordable Care Act (ACA). While potential changes in federal policy would undoubtedly create change and market shifts in the industry, they are not likely to alter the underlying trends that we anticipate to continue into 2017.
MACRA, Medicaid, and the Search for Lower Costs and Greater Value
With the uncertainty of the ACA, we still expect the march to lower costs and increase value to continue:
- MACRA and Value-Based Payments: Both MACRA and bundled payments have historically maintained bipartisan support. Even if these initiatives are abandoned, they are likely to be replaced with similar programs with the intention of reducing cost and incentivizing value.
- Medicaid and Self-Pay: The ACA saw the expansion of Medicaid to over 12 million low-income adults and children. This expansion resulted in a surge in demand for health care services in a number of health care markets. Rolling back these programs will be challenging; however, if such a rollback occurs, we are likely to face challenges in access to care, a more rapid rise in self-pay patients, and a rise in bad debt for hospitals and providers. We will also continue to see a rise in high-deductible health plans with large out-of-pocket costs.
- Continue the course of cost reduction and value enhancement. Maintain and improve performance initiatives and other cost reduction strategies.
- Continue MACRA implementation efforts and explore other qualifying value-based payment models. Invest in enterprise-level technology to maintain and track data on quality and other health care metrics.
- Prepare for higher self-pay. Invest in revenue cycle improvement initiatives such as pre-registration efforts, payment and collection policies, and streamline payment systems.
Access to Health Care, and Changing Consumer Demands
How patients are consuming health care is evolving. Families are getting busier and have less time available to take care of episodic and low-acuity health needs during the day.
- Unscheduled Care and Better Access: Patients are clamoring for unscheduled access to low-acuity primary and urgent care settings. They want convenient care for their busy lives and don’t want to make an appointment. If this care setting is not readily available in their geography, they may drive out of town to access care.
- Emergency Room: Many patients will still use the emergency room if there are no better options in the community. Emergency room volumes continue to rise nationally despite market efforts to provide alternative options for care and the fact that a significant portion of emergency room cases could be seen in an urgent care center or primary care clinic setting.
- Explore opportunities to expand primary care hours of operation. Evenings and Saturday appointments are popular for patients who want to walk-in and be seen without an appointment.
- Track emergency room volume over time to gauge the peak busy periods and patient acuity levels. This information will shed light on potential primary care access issues.
- Track primary care access and wait times for patients to see providers. Longer wait times can indicate access issues.
- If access is a concern within the community, investigate the demand for urgent care and after-hours and weekend walk-in clinic access. There may be opportunity to optimize reimbursement for urgent care or enhanced primary care services either in a hospital, rural health clinic, or other community setting.
Big Data and the Threat of Cyber Attacks
The need to track data for population health management and related quality and utilization reporting has led to significant investment in enterprise-level data warehousing and management. With greater access to data at the organizational level, the threat of cyber-attacks increases for hospitals of all sizes.
- Thirst for Data: Clinicians and administrative leaders are eager for data as a means to make more informed clinical, strategic, and financial decisions. Investments in enterprise data warehouses and business intelligence tools will put financial pressure on organizations, regardless of their size or market presence. There is also a growing need for a skill set to manipulate this data into meaningful actionable information.
- Cyber Security: In the past two years, approximately 90% of health care organizations have been cyber attacked. A data breach can be expensive and also a resource and time-consuming issue for an organization.
- Explore the clinical, patient, and financial data needs and capabilities within the organization. Identify areas where greater data capture and reporting is required and develop a data collection plan.
- Data is only valuable if an organization has the ability to accurately extract, understand, and interpret it. Assess data interpretation and visualization capabilities either through the electronic health records system or with other business intelligence tools. Develop a strategic technology and decision support plan.
- Conduct a cyber security checkup to assess the organization’s risk for a data breach and invest in the necessary changes to minimize or prevent the likelihood of such an occurrence.