Presentation on theme: "Healthcare Trends and Implications 2012–2017"— Presentation transcript:
1Healthcare Trends and Implications 2012–2017 FuturescanHealthcare Trends and Implications 2012–2017
2Futurescan Co-sponsored by: Society for Healthcare Strategy and Market Development of the American Hospital AssociationAmerican College of Healthcare ExecutivesWith Support From VHA Inc.
3American College of Healthcare Executives Professional society of more than 40,000 healthcare executives—Leaders Who CareBoard certification in healthcare management as ACHE Fellows (FACHE®)Foremost continuing educator for the fieldLeading healthcare management publications:Health Administration Press booksJournal of Healthcare Management, Frontiers of Health Services Management and Healthcare ExecutiveFulfilling our vision to be the premier professional society for healthcare executives dedicated to improving healthcare delivery
4Society for Healthcare Strategy and Market Development Personal membership group of the American Hospital AssociationServes more than 4,400 healthcare planning, marketing and public relations/communications professionalsCommitted to helping members meet the future with more knowledge and opportunity as their organizations work to improve health status and quality of life in their communities
5Futurescan 2012–2017Healthcare Reform: The Transformation of America’s Hospitals—Economics Drives a New Business ModelHealthcare Reform: States Grapple With Health Insurance ExchangesAccess to Capital: The Gold Rush Is OnDemographics: Will the Baby Boom Be a Boon to Hospitals? Don’t Count on ItCommunity Connections: An Expanding Hospital Role Includes Community Well-BeingBending the Cost Curve: Hospitals Challenged to Lead With Quality to Reduce CostsClinical Integration: Déjà Vu All Over AgainPhysician Strategies: Employing Physicians—The Future Is Now
6“The hospital—altogether the most complex human organization ever devised …” Peter DruckerDrucker, Peter F. (2002). Managing in the Next Society. New York, New York: St. Martin’s Griffin.
7Start, Stop and/or Continue Actions We ShouldStart, Stop and/or ContinueWe should start.....We should continue.....We should stop.....
8FutureScanning Trend Implications of this Trend? At least 1 positive, and 1 negative.Implications of this Trend?
9Healthcare ReformThe Transformation of America’s Hospitals: Economics Drives a New Business ModelKenneth KaufmanMark E. Grube
10Transforming America’s Hospitals: A New Business Model The Economics of the 21st century will force healthcare delivery to be value based.Don’t wait for change to come from federal or state governments.Focus on outcomes, quality and access rather than volume.Move from physician-centric to team-based care.Emphasize teamwork, discipline and humility as organizational values.
11Transforming America’s Hospitals: Downward Trends Reimbursement and utilization will decline over time on either a relative or absolute basis.Breaking even on Medicare patients will be key. Aggressively pursue this goal.Rethink service offerings and examine care processes in order to achieve efficiencies.Adopt a team-based approach that focuses on population health rather than just individual patient care.
12Transforming America’s Hospitals: Technological Innovation The rapid emergence of new technologies that improve health outcomes and reduce costs will disrupt clinical practice and competitive strategy.Invest in disease management systems that monitor patients in their homes in order to promote health and reduce readmissions.Develop hospital-branded “apps” for smartphones that provide health information to consumers and best-practice information to clinicians.Make technological innovation and adaptation an essential part of your management strategy.
13Transforming America’s Hospitals: Boundaries Blur The traditional hard lines between various types of healthcare providers and participants will begin to break down.Carefully monitor the trends in your community regarding employed physicians, integrated services and ACO development.Consider participating in joint ventures between for-profit and nonprofit providers.Look for opportunities for collaboration between health insurers and provider organizations.
14Transforming America’s Hospitals: Consolidation Price and quality competition from large organizations will be intense, and it will be increasingly difficult for small independent organizations to survive.Look for ways to achieve economies of scale by partnering with other community or regional organizations.Use group purchasing alliances to reduce costs.Educate the board and medical staff on the realities of the new healthcare landscape so that they are prepared for change.
15States Grapple With Health Insurance Exchanges Healthcare ReformStates Grapple With Health Insurance ExchangesWilliam W. Sneed
16Health Insurance Exchanges: Sooner Rather Than Later It is very likely that the ACA will be judged constitutional and that all states will be expected to implement exchanges by January 2014.Monitor the federal regulations closely as they evolve in response to comments from the field.Be thoroughly familiar with your state’s intentions and progress regarding exchange development.Project how an operational exchange will impact your facility in terms of both patient volume and cash flow.Be prepared to act quickly.
17Health Insurance Exchanges: Expanding Access Exchanges will enroll individuals without prior access to employer-sponsored insurance as well as employees of small companies.Get involved in your state’s exchange development. Have a voice in determining its policies and implementation.Monitor the local workforce environment so you can anticipate the exchange’s clients and their health status.Serve as a resource to local small businesses as they consider dropping their health coverage in favor of an exchange.
18Health Insurance Exchanges: Provider Risks Operating exchanges will create financial risks for provider organizations.Run projections to determine the individuals most likely to join exchanges in your area, and their likely health status and health needs.Be prepared for the competition that exchanges will create based on cost.Be vigilant about pricing services below cost in an effort to maintain market share.
19Health Insurance Exchanges: The Benefit Package The federal government will allow individual states to define essential benefits for its exchange.Monitor the federal and state policy and legislation closely.Closely monitor state agency-vendor relationships.Actively advocate for a benefit package that maximizes quality at a reasonable cost.
20Health Insurance Exchanges: Transparency Health insurance exchanges will promote transparency in an attempt to lower costs.Begin making cost and quality information available now.Use social media (website, Facebook and more) as a means to promote transparency of services and quality.Devise strategies to help consumers understand what an exchange is and the various products that will be offered by the exchange.Be an active participant in the design of the exchange.
21Access to CapitalThe Gold Rush Is OnMarian C. Jennings
22Access to Capital: Unstable Markets Volatility in the credit market will likely continue, making access to timely, affordable debt challenging and uncertain.Attend to key balance sheet and liquidity ratios NOW. Don’t wait until you need access to capital.Cultivate relationships with local and traditional lenders.Monitor competitors’ situations regularly. Don’t assume weak organizations will always be strapped for capital.
23Access to Capital: A Widening Resource Gap The gap between the haves and the have-nots in terms of access to capital will increase.Develop a five-year strategic financial plan that incorporates capital needs and links them to continued competitiveness.Consider a variety of “what if” scenarios to best position your organization for the inevitable changes that will occur over the next five years.Smaller facilities should consider partnerships with larger or regional systems.
24Access to Capital: Competitive Advantage For-profit systems will use their ability to access capital as a competitive advantage and continue their aggressive acquisition mode.When appropriate, look for a for-profit partner for new or existing projects.All facilities—for-profit or nonprofit—should make planning for capital needs under various scenarios a key part of management.In order to maintain your competitiveness, find ways to break even on Medicare reimbursement.
25Access to Capital: More Demand Than Capacity Capital demand will outstrip capacity, even in the strongest and largest nonprofit systems.Carefully examine criteria for capital projects or improvements.Consider divesting underperforming assets sooner rather than later.Be cognizant that bond holders expect a return on their investment.Be sure to demonstrate your organization’s continued value to the community.
26Access to Capital: An Urge to Merge The need for access to capital will result in more hospitals and regional systems merging with larger organizations.While access to capital may drive a merger, other benefits of affiliation can be obtained without ceding control.Be aware that merging with a smaller, struggling hospital could result in a credit downgrade or divert limited system resources.Carefully monitor proposed federal legislation that would make newly issued municipal bonds taxable.
27Will the Baby Boom Be a Boon to Hospitals? Don’t Count on It DemographicsWill the Baby Boom Be a Boon to Hospitals? Don’t Count on ItJeff Goldsmith
28Demographics: The 21st Century Retiree Many baby boomers will postpone retirement or look for new ways to make a meaningful contribution post-retirement. They will expect to maintain healthy and active lifestyles.Offer programs that will help seniors remain healthy and active well past the traditional retirement age.Develop expertise in orthopedic services, particularly joint replacement.Provide volunteer or part-time consulting opportunities for talented seniors in your community.Focus on patient satisfaction, as boomers will demand high-quality services.
29Demographics: Cost-Sensitive Seniors Because of the economic downturn, Medicare-eligible boomers are more likely to opt for the cost-savings offered by Advantage programs.Anticipate reductions in the use of hospital services by future—as compared to past—Medicare recipients.Develop programs that help patients and their families manage and coordinate post-hospital care.Engage Medicare Advantage programs in experimenting with new care models.
30Demographics: Anticipate Needs The greatest needs of the boomer generation will be joint replacement surgery, diabetes-related care and cancer services.Develop ambulatory centers for cancer treatment and imaging.Develop specialized services for diabetes treatment and management.Develop expertise in joint replacement and rehabilitation following surgery.Carefully monitor the health and social needs of seniors in your community to identify opportunities for additional services.
31Demographics: Break Even on Medicare In the long term, successful providers will need to break even on Medicare’s current DRG and APG systems.Work with physicians, particularly intensivists and hospitalists, to reduce costs.Implement aggressive infection control processes.Develop systems that coordinate care.Work with families to reduce post-care complications and readmissions.
32Demographics: Innovations in Healthcare Delivery The CMS Innovation Center created by the ACA will promote innovations in healthcare delivery designed to control costs and ensure quality.Be active participants in any field tests or experiments in order to learn to improve care and influence emerging models.Actively involve physician leaders in any new models.Look for new ways to deliver primary care, care transitions and follow-up care.
33Community Connections An Expanding Hospital Role Includes Community Well-BeingConnie J. Evashwick, ScD, FACHEEileen L. Barsi
34Community Connections: Demonstrating Community Benefit There will be increasing pressure on hospitals to demonstrate their value to the community.Nonprofit hospitals should ensure they are in compliance with the new community benefit requirements under the ACA.Nonprofits should be prepared to respond to challenges regarding their tax exempt status.Promote the importance of your organization’s economic impact on the community.
35Community Connections: Population Health Hospitals will be expected to make good on their mission to improve the health of the community.Assess your organization’s current engagement with the community now.Have metrics in place that track your organization’s impact on the community’s health and well-being.Work with churches and other community organizations to enroll qualified individuals in state Medicaid programs.
36Community Connections: Wellness and Prevention Wellness and preventive programs will proliferate as employers and insurers look for ways to reduce healthcare costs.Partner with insurers and employers to offer wellness programs and expertise.Work with community-based clinics to expand access to preventive services.Develop expertise in disease management that can benefit community providers and reduce healthcare costs.
37Community Connections: Engagement As part of their community benefit, hospitals will need to be actively engaged with the community.Incorporate community outreach as a key function of the organization.Involve senior leaders in activities and strategies that benefit the community.Choose governing or advisory board members who reflect and are sensitive to the needs of the broader community.Communicate regularly with internal and external stakeholders.
38Community Connections: Collaboration Collaboration with other community organizations will be a critical strategy for providing coordinated care.Make sure that key leadership understands how your organization interfaces with other community agencies or providers.Provide incentives for employees to volunteer with or provide expertise to other community agencies or providers.Offer expertise to local health departments that may be seeking accreditation by the Public Health Accreditation Board.
39Bending the Cost CurveHospitals Challenged to Lead With Quality to Reduce CostsNancy M. Schlichting, FACHE
40Bending the Cost Curve: Deficit Reduction Challenges Pressures to reduce budget deficits—at both the federal and state levels—will target entitlement programs including Medicare and Medicaid.Use proven strategies like Lean and Six Sigma to reduce costs associated with Medicare and Medicaid admissions.Work with clinical staff to coordinate care in attempts to reduce costs.Set a goal to “break even” on Medicare patients by 2014.
41Bending the Cost Curve: A Demographic Tsunami The aging of the baby boom generation will create a tsunami of increased demand and high expectations for services.Since seniors will likely be paying more out of pocket for healthcare services, emphasize the value of your care.Pursue clinical integration with physicians to provide high-quality, efficient and coordinated care.Design intake and discharge processes that are efficient and sensitive to the needs of seniors.
42Bending the Cost Curve: Value-Driven Healthcare The expectations for quality and value in the delivery of healthcare services will increase. The bar will be set higher.Use quality improvement techniques like Lean and Six Sigma to improve processes.Investigate new models of care that will reduce complication and infection rates and improve efficiencies.Make sure that information systems are flexible enough to capture meaningful performance indicators.Focus on patient satisfaction.
43Bending the Cost Curve: Readmissions Public and private payors will continue to penalize hospitals for high readmission rates.Be aware that some patients may not have the financial resources for post-discharge care (e.g., home health, medications, etc.).Use a transition coach who will help patients transition from the hospital to their homes.Provide post-discharge clinics for patients at risk of readmission.
44Bending the Cost Curve: Focus on the Intersections Successful providers will coordinate care across settings with payors and community organizations.Work with community organizations to develop wellness and chronic disease management services.Develop preferred relationships with organizations to provide home care and other post-discharge services.Work with nontraditional caregivers like homeless shelters and free clinics.Explore new models for providing primary care.
45Clinical IntegrationDéjà Vu All Over AgainNathan S. Kaufman
46Clinical Integration: Back to the Future Despite the failures of the 1990s, providers will look for ways to achieve clinical integration as the ACA is phased in.Make sure that any strategies are compliant with FTC guidelines.Early on, determine whether your organization possesses the infrastructure for clinical integration.Exercise caution and carefully evaluate the organization’s readiness to form an ACO or vertically integrated system.Pilot test any new network with health system employees and their beneficiaries before expanding to a larger patient base.
47Clinical Integration: Rewards and Consequences In clinically integrated systems, performance-based rewards will be used to improve quality and efficiency.Engage physician partners in determining which metrics will be monitored and used to reward performance.Regularly review these indicators to determine their usefulness and validity.Be sure information systems can track these indicators reliably and in real time.Be prepared to deal with poor performers.
48Clinical Integration: Core Competencies ACOs and other integrated organizations will only be successful if they master “2nd generation competencies.”Adopt a common EHR that incorporates point-of-care protocols.Create sufficient primary care capacity.Implement evidence-based inpatient and outpatient care plans.Incorporate proactive disease management programs.Develop physician leadership and engagement.
49Clinical Integration: More Than Physicians Clinical integration under a reformed health system will extend to all types and levels of healthcare providers.Work with local health departments and community clinics for follow-up care and wellness services.Develop relationships with organizations providing specialized post-acute care.Partner with social services organizations that provide services that maintain individuals’ health and well-being.Include behavioral health services in the network.
50Clinical Integration: Failures Are Inevitable Many organizations will assume risk for integrated care without possessing 2nd generation competencies. They will likely fail.Carefully evaluate your organization’s readiness before assuming risk associated with an ACO or integrated network.Cultivate physician leadership and buy-in for reducing cost and improving quality.Recognize that watchful waiting and learning from others’ experiences may be the best strategy for many organizations.
51Employing Physicians: Nick A. Fabrizio, PhD, FACHE Physician StrategiesEmploying Physicians:The Future Is NowNick A. Fabrizio, PhD, FACHE
52Physician Strategies: The New Employees Individual physicians and group practices will continue to look to hospitals for employment and the economic security it offers.Be judicious and strategic in offering employment opportunities to physicians and physician groups.Anticipate cultural clashes between physicians and hospitals and plan for a transition period.Be sensitive to the varying needs of different generations of physicians.
53Physician Strategies: Learning From the Past Hospitals will benefit from the mistakes of the 1990s and achieve strategic advantages by employing physicians.Emphasize the economic security of affiliating with a large and stable organization.Make sure that your organization has sufficient human resources to manage physicians and physician practices.Link incentives to productivity and make sure that your IT system reliably measures key indicators.Allow physician leaders to participate in decision-making and governance activities.
54Physician Strategies: Larger and Larger Groups The number of physicians in group practices and the size of physician groups will continue to increase.Develop affiliations with large independent groups of physicians.Monitor the growth and vitality of physician groups in your community.Monitor the competitive environment in order to identify opportune times to offer employment to select physician groups.
55Physician Strategies: Shared Governance Physician-manager leadership dyads will be necessary for success with employed physicians.Make sure your organization will accept physician leaders as an integral part of the management team.Spread physician-administrator dyads throughout the organization.Engage physicians in the selection of the physician leadership.Ensure that employed physicians have easy access to the CEO.
56Physician Strategies: Practice Management Skills Hospitals and systems will need management personnel and infrastructure to integrate physician practices.Hire individuals with experience and expertise in physician practice management.Make sure that the IT system can integrate practice management with the EHR and billing systems.Work with physician leadership to develop incentive plans that promote efficiency and quality as well as physician satisfaction.Expand physician leadership and training opportunities.
57“‘We will do everything for everybody’ has never been a viable value proposition for any successful business model that we know of—and yet that’s the value proposition … of general hospitals.”Clayton M. Christensen, Jerome H. Grossman, MD, and Jason Hwang, MDThe Innovator’s Prescription: A Disruptive Solution for Health Care (2009)
58FuturescanThis presentation was adapted by Mary Stefl, PhD, Chair, Health Care Administration, Trinity University, from Futurescan: Healthcare Trends and Implications 2012–2017. Futurescan 2012 is available for purchase from Health Administration Press. Single copies (order code 2206) are $45. Packages of 15 copies (order code 2208) are available for a discounted price of $395. Order online at ache.org/HAP or call the ACHE/HAP Order Fulfillment Center at (301)
59Healthcare Trends and Implications 2012–2017 FuturescanHealthcare Trends and Implications 2012–2017