What Will 2012 Bring for the Healthcare Industry?

By Debra Wood, RN, contributor

January 9, 2012 - A bastion of stability and generator of jobs, healthcare now has reached a critical crossroads--with increasing demand for services yet limited reimbursement to pay for that care-- and is entering a volatile period. Industry experts predict a number of changes in 2012 and over the next few years.

“I cannot imagine a more exciting place to be working than healthcare,” said Andrew Nygard, senior manager at consulting firm Kalypso in Beachwood, Ohio. “It’s going to be the wild, wild, West during the next decade, figuring out how to address these issues.”

With policymakers seeking to stem rising healthcare costs and improve quality of care, Erica Drazen, managing director of the Global Institute for Emerging Healthcare Practices at CSC in Waltham, Mass., predicts more efforts to improve accountability including paying for quality, bundled payments and penalties for readmissions. She said the impact of these changes will sink in as payment reductions become a reality to those that don’t perform. Also all of these practices will spread to include Medicare, Medicaid and private payers.

Albert Santalo, CEO of CareCloud in Miami, added, “Physicians will be facing an increase in data reporting requirements in 2012, and those who haven’t already adopted EHR [electronic health records] will have to choose one.”

As smaller hospitals and practices try to keep up with regulatory changes and the need for electronic systems, Drazen expects to see more mergers and acquisitions.

Dena Kitchens, director of product management at Provista in Irving, Texas, on the other hand, projects that the “pace of physician practice and ambulatory provider acquisitions by health systems will slow down in 2012, as health systems try to integrate their past purchases, and as the most desirable targets have already been acquired.”

Health reform

Regulatory uncertainty is the biggest issue facing healthcare, Nygard said.

A decision by the U.S. Supreme Court about the constitutionality of the individual mandate in the Affordable Care Act could remove some of that. But if the court reverses the mandate, Drazen said, the expansion of coverage will not be viable.

Kitchens said providers should prepare for the probability that major components of healthcare reform will go into effect on schedule.

“The administration believes that the Supreme Court will come down in favor of the mandate,” Kitchens said. “Also, to overturn the law with repeal legislation, the Republicans would need to retake the White House and achieve majorities in both houses of Congress, or achieve enough of a supermajority in Congress to overturn a veto if President Obama is reelected. Those scenarios seem unlikely.”

Nygard expects accountable care organizations (ACOs), part of the reform act, will move forward, regardless.

“Right now, there are no options on the table but to look at costs, and ACOs look like the single biggest concept on the table,” Nygard said.

Jeremy Coote, CEO of InterComponentWare in Wayne, Pa., expects providers to begin using technologies to create efficient, cost-effective care coordination, an essential element of ACOs.

“These initiatives require robust data analytics to do things like predictive modeling and care alerts,” Coote said. “The key to adapting quickly to these new outcomes-based models will be for health systems to make smart choices in new technologies that also allow them to leverage existing technologies and IT infrastructures.”

Accountable care and payment reform will require unprecedented provider focus on coordinating care, streamlining workflow and improving critical-care throughput, said Merrie Wallace, RN, MN, BSN, executive vice president of Product Solutions of Awarepoint Corp. in San Diego, Calif.

“To enhance care quality, optimize RN resources, obtain the information they need to identify and reengineer workflow bottlenecks and succeed in an ACO and pay-for-performance environment, facilities will increasing deploy real-time location systems in 2012,” Wallace said.

People power

All of the changes in healthcare will affect people working in the industry. Nursing care is becoming increasingly focused on clinical practice standards, evidence-based information and improved patient care outcomes, said Judith A. McCann, RN, nursing officer for Nursing Drug Handbook and Lippincott's Nursing Solutions at Wolters Kluwer Health, a provider of information, business intelligence and point-of-care solutions for the healthcare industry in Philadelphia.

“In 2012, I expect to see an increased interest in advanced clinical knowledge and a greater focus on online learning and reference tools in nursing,” McCann said. “Competence is part of the fabric of nursing, and its growing importance cannot be overstressed.”

More efficient deployment of human resources could help the industry, said Jason Hwang, executive director of healthcare at the not-for-profit think tank Innosight Institute, based in Mountain View, Calif.

“We’re talking about empowering less-costly individuals to provide more sophisticated care,” Hwang added. He said the industry “must tap into unused elements of the healthcare workforce such as nursing assistants, physician assistants, pharmacists and patients themselves in response to the shortage of primary-care doctors.”

Greener healthcare facilities

Many healthcare systems, such as Orlando Health in Florida, are embarking on energy conservation and sustainability initiatives.

Karen Edmundson, with Business Interiors by Staples in Framingham, Mass., said she finds healthcare facilities continue to look at ways to “green” their buildings, and create healthier environments for staff, patients and visitors.

“The new Leadership in Energy and Environmental Design (LEED) for Healthcare rating, introduced by the U.S. Green Building Council (USGBC) [in 2011], further validates the need to integrate healthcare design principles with environmental stewardship,” Edmundson said.

Edmundson also predicts healthcare organizations to select more flexible furnishings, decentralized nursing stations and high-end looks on a budget.

Technology changes

Hospitals and providers will continue to work toward meaningful use of EHRs, also known as electronic medical records (EMRs).

Santalo expects, as the EHR market grows to $6.5 billion in 2012, system sophistication and user interfaces should improve to options, including cloud-based EHRs, which can reduce the cost of implementing and maintaining an EHR system.

The U.S. Department of Health and Human Services is expected to publish a plan in 2012 to minimize patient safety risks associated with health information technology, according to an Institute of Medicine report about IT needing better oversight and accountability.

Peter Witonsky, president of iSirona, Panama City, Fla., anticipates more synchronization of medical device data with EHRs.

“By synchronizing medical device integration with the go-live of their EHR, hospitals can ensure real- time data integrity,” Witonsky said. “They also will free up nurses to spend less time on administrative and data-entry tasks and more time on direct patient-care activities, improving quality of care and patient safety.”

Roy Schoenberg, CEO and co-founder of American Well in Boston, predicts that in 2012 leading electronic medical record (EMR) companies will announce the introduction of telehealth capabilities into practice management systems as the federal government, private payers, retail pharmacies and provider organizations step up telehealth activities and use it to better manage patients.

“This is heating up to be a commercial competitive playground,” Schoenberg said. Care-delivery organizations “are growing to understand there is money on the table from a variety of sources to utilize telehealth. It allows them to open their practice to a larger clientele.”

More digital mobility

Drazen does not expect any breakthrough technology innovations in the year ahead. However, she anticipates use of mobile health applications to grow in 2012.

“All signs point to 2012 as the year healthcare and mobile truly converge,” said Matthew Douglass, vice president of engineering at Practice Fusion, a free, web-based electronic health record based in San Francisco. “The creation of physician tools to manage their patient populations, apps for healthcare consumers to access their health history on-the-go, and thousands of apps in the quantified self space will allow patients to have access to more and more of their daily data than ever before.”

But with implementation of new technology comes new risks, said Amit Trivedi, healthcare programs manager at Verizon’s ICSA Labs division in Mechanicsburg, Pa.. Securing mobile clinical data will become a focus, and he expects more organizations to put policies in place to monitor and approve applications.

“Folks will want to use one device to manage as much as they can, and that one device is probably a phone,” said Trivedi, who also expects greater enforcement of HIPAA privacy breeches.

As of late 2011, there were more than 10,000 medical and healthcare apps available in Apple’s iTunes App Store, according to a study from the consulting firm Float in Morton, Ill.

More patient engagement

Many of these applications, however, require patient involvement.

Hwang called patients the “untapped resource” in healthcare. He expects patients to take more control of their own health. Online patient networks will allow people to learn from other people with the same condition about how best to manage their diseases. Hwang calls it democratizing expertise.

Stephanie Donovan, an assistant professor at Peirce College in Philadelphia, also expects more patient empowerment and use of personal health records. As a volunteer, talking with people in the community, she is finding great interest among consumers.

Gary Kolbeck, president of LodgeNet Healthcare in Sioux Falls, S.D., said 2012 will mark the healthcare system’s shift to a patient-centered focus.

“The threat of financial penalties tied to health-reform initiatives and the upside of improved outcomes are major drivers,” Kolbeck said. “Research has shown that when patients are more knowledgeable about their conditions and understand the consequences of their actions, they often start actively participating in their care.”

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