Healthcare executives will have their hands full in 2018 as issues that dominated most of 2017 continue to disrupt the industry and force providers to experiment with nontraditional care delivery approaches to lower costs and improve care.
Indeed, the industry experts we talked to about the near-term future of the healthcare industry predict that regulatory changes and pressure from competitors will force healthcare leaders to rethink their investments in value-based care and align with non-traditional providers to expand their reach in the market. Meanwhile, some headaches, including how to handle unpaid medical bills, will only get worse in 2018, they said.
Here are their predictions for the next 12 months:
A refocus on investments that drive the transition to value-based care
There has been some concern that the Trump administration isn’t as committed to the move away from fee-for-service based on the federal government’s recent request for feedback on value-based payment models. But even if there are bumps in the road, industry experts say providers must (and will) continue to embrace efforts to lower costs and improve patient outcomes.
The future of value-based contracting is murky, based on the Centers for Medicare & Medicaid Services' recent cancellation of mandatory Medicare bundled payment programs and expanding participation exemptions under MACRA, admit Christopher Stanley, M.D., director of Navigant Consulting’s healthcare practice, and Richard F. Bajner, Jr., managing director at Navigant.
As a result, providers will likely reevaluate their investments in some value-based care programs, Stanley told FierceHealthcare. But that doesn’t mean they will abandon them. Far from it: Stanley said hospital executives have spent a lot of time in the last five years on value-based programs, including accountable care organizations. Health systems will want to get a return on investment on their efforts.
Joe Damore, vice president of population health management at Premier Inc., a healthcare improvement company that includes an alliance of approximately 3,900 U.S. hospitals and health systems, said providers continue to make moves toward integrated systems that deliver cost-effective, patient-centered and coordinated value-based care.
The movement began with Medicare ACOs, but now commercial and Medicare Advantage payers are also encouraging value-based care delivery and new payment models.
“Payers want to increasingly shift risk to delivery systems, leading to the creation of a more team-based approach to care with aligned incentives for value-based care models between delivery and payment,” he told FierceHealthcare.
All of these moves are in sync with value-based, alternative payment models–ACOs, bundled payment models, clinically integrated networks and shared savings programs, he added.
Damore said Premier members are investing in and seeing success with advanced primary care models, care management programs for high-risk and chronically ill patients and effective post-acute care networks to support value-based care delivery and payment models.
“Premier Medicare ACOs perform twice as well as all the other Medicare ACOs in the nation, and our bundled payment program members are performing 35% better than others in earning cost savings in the CJR program,” he said.
Bajner and Stanley also recommend that providers use their experience with value-based care as a stepping stone to transition to programs like Medicare Advantage.
Healthcare organizations should also invest in population health efforts aimed to reduce unnecessary emergency room use and hospitalizations for Medicaid patients and the uninsured because both federal government and commercial payers don’t provide adequate reimbursement for these populations.
They also suggest healthcare organizations develop community-based partnerships and work with primary care providers to identify patients at-risk for certain conditions.
More non-traditional partnerships among healthcare providers
Value-based care and efforts to improve population health have also driven new collaborations between former competitors, and payers and providers.
High-profile mega-mergers are in the works between Catholic Health Initiatives and Dignity Health, Providence St. Joseph Health and Ascension, Advocate Health Care and Aurora Health Care, and UnitedHealth’s Optum unit and the DaVita Medical Group.
But one of the biggest deals to shake up the industry is the $69 billion merger of CVS and Aetna that promises to revolutionize the consumer healthcare experience. The expansion of CVS retail clinics into “community-based health hubs” is a threat to big U.S. hospital operators and primary care practices.
Health economist Paul Keckley, Ph.D., said in his most recent issue of The Keckley Report that there is much speculation about the impact of how these types of acquisition might change the healthcare landscape as more corporations engage directly in care delivery.
“In every sector, gaining scale while broadening scope seems necessary to follow the puck as healthcare transitions from a facility-dependent, acute centric model to population health and chronic care management.” he wrote.
“Independence and specialization might be too risky for many.”
Indeed, 2018 will likely bring more of these partnerships, according to a Deloitte report (PDF) that analyzed merger and acquisitions trends for the upcoming year. Regulatory changes, competition and pricing pressures are driving much of the consolidations, including mergers among healthcare plans, providers and telecommunication companies, the report found.
Kevin Hollaran, a healthcare analyst for Fitch Ratings who specializes in nonprofits, said he also expects more mega-mergers and growing interest from well-capitalized, non-traditional competitors to enter the healthcare market.
Meanwhile, Stanley said hospitals must do a better job of managing their acquisitions of physician practices and giving key physician leaders the power to make necessary changes.
The Navigant 2018 trend report noted that hospitals that have purchased physician practices in recent years have not seen a return on their investments. The acquisitions have proven to be costly, with systems standing to lose on average $185,000 per employed physician.
Stanley and Bajner recommend that providers prune back their portfolio of employed doctors and tailor compensation to the organization’s volume and value reimbursement mix to make sure physician compensation drives productivity.
A rise in unpaid medical bills
Stanley and Bajner also predict a “perfect storm” of colliding issues that will derail improvements made in recent years in uncompensated care revenue.
Those issues include uncertainty over the repeal of the Affordable Care Act, a potential for an economic downturn and more consumers having high-deductible health plans.
As a result, they say hospitals can expect to see a rise in the number of consumers who will be responsible for a larger portion of their medical bills. And this means more Americans will have problems paying their medical bills and hospitals, in turn, will have trouble collecting payments.
In response, they said, hospital leaders must tighten their revenue cycle processes to improve patient collections.
Among their suggestions: Communicate upfront with patients so they understand how much they will owe after a procedure or hospitalization; develop payment plans to make it easier for consumers to pay bills in full, improve coding, tracking and management of denied claims for insured patients; and enhance clinical IT systems to reduce duplicative documentation requests.