Value Not Volume
America’s shifting payer mix. Medicare /Medicaid continue to grow and will be 75% of the sector in 20 years. 1/5 hospitals continue to lose money. In order to thrive, hospital systems will have to decrease operating costs by 10-18% -- this equates to their entire capital budget. We are moving to a model that distributes cost responsibility across the spectrum so we get better outcomes for our healthcare dollars. That means moving outpatient closer to the center of healthcare delivery, reducing the strain on hospitals, reducing readmissions, aggregating the care people need.
“The central challenge is how to balance evidence-based and effective health care with appropriate cost management starting at the entry point, which is where physicians counsel, diagnose and prescribe care for individual patients. We conclude that the ACA provisions that focus on physicians: 1) to drive core shifts in quality and performance measurement and reporting; 2) to drive adoption of health information technology in medical care and business practices, and, 3) to drive greater risk assumption by physicians for the economic aspects of care, will largely survive any re-making of the ACA.”
Main Frame to Local Access
Like the move from computers that took up an entire room to your laptop or handheld, medicine is moving out of the walls of acute care hospitals to faster, better, cheaper outpatient facilities that deliver care where patients live. The new world of healthcare will see most patients receiving primary care and family medicine from small retail locations and higher acuity care at aggregated outpatient complexes, including cancer and heart treatment and ASCs. We are moving from monolithic care to a new continuum.
“Rising health-care costs are at the core of the United States' long-term fiscal imbalance. The Congressional Budget Office (CBO) projects that between now and 2050, Medicare, Medicaid, and other federal spending on health care will rise from 5.5 percent of GDP to more than 12 percent. (Social Security costs, by comparison, are projected to increase from five percent of GDP to six percent over the same period.) It is no exaggeration to say that the United States' standing in the world depends on its success in constraining this health-care cost explosion; unless it does, the country will eventually face a severe fiscal crisis or a crippling inability to invest in other areas.”
Organize Pit Crews
The new look of healthcare delivery is team based not single practitioner. Chronic patients with 4 or more conditions make up 96% of healthcare spending and they see between 6 and 15 different providers. We need to promote collaboration by aligning these services. Everybody talking to each other through electronic health records, which accumulate data and benchmark quality improvements. Getting the patients on your side because you’ve created a one-stop shop.
“The epidemic of chronic illness is steadily moving toward crisis proportions, yet maintaining or enhancing quality of life for individuals living with chronic illnesses has not been given the attention it deserves by health care funders, health systems, policy makers, and public health programs and agencies. Moreover, the aging of the population will only increase coming challenges.”
In the 1970s, each patient was assigned an average of two clinicians; today, its 15 providers per patient. As we move from fee-for service and siloed care to bundled payments which use lump sums to drive integration through shared accountability, we need everybody working on the same team. Providers now share the financial risk with insurers. In this increasingly complex world, service distribution is key so pre-acute, acute and post-acute care all need to be connected.
“The nation’s quality and cost problems are rooted in the dominant fee-for-service payment system, which has created a health care ìproductionî model driven by volume and based on incentives to do more, rather than to do better. At the same time, incentives reward bad outcomes, as “curing” the harm from a medical error or a preventable readmission earns additional payment. One of the most promising strategies for improvement is the creation of accountable care organizations (ACOs), in which providers take responsibility for a defined population, coordinate care across settings, and are held to benchmark levels of quality and cost. Unlike some previous delivery system reforms, ACOs seek to balance cost control with efforts to improve outcomes and enhance peopleís satisfaction.”