What’s Ahead in 2014: Healthcare Trends to Watch
By Debra Wood, RN, contributor
January 8, 2014 - The coming year will bring more change to an evolving healthcare system, with people and hospitals coming together in new alliances and integrated networks and technology and clinical advances taking off.
Robert Wah, MD, predicted significant changes in healthcare delivery in 2014.
“We’re going to see some significant changes in delivery in 2014, with all of the legislation coming to fruition,” said Robert Wah, MD, chief medical officer at CSC, headquartered in Falls Church, Va., and president-elect of the American Medical Association. “Things like accountable care organizations and other changes will, hopefully, deliver more effective care and more cost-efficient care. A number of technologies will support those delivery changes.”
Ron Seifert, vice president and executive compensation practice leader for Hay Group’s healthcare practice in Philadelphia, added, “Healthcare is going to continue to be challenged financially and operationally. On the delivery side, you will see more build-out of healthcare systems creating care continuum models to cover the full patient experience.”
Donna Fraiche cautioned that smaller hospitals and systems will become more vulnerable in the year ahead.
Donna Fraiche, an attorney with Baker Donelson in Louisiana, predicted more consolidation will occur in the healthcare delivery system, due to costs. Hospitals are being forced to reduce expenditures, while at the same time payment will be based on quality outcomes.
“It’s a fascinating time to be involved in healthcare public policy,” said Fraiche, explaining that regulations regarding tax policy and fraud and abuse anti-kickback laws present challenges to collaboration, and smaller hospitals with small networks will be placed at a disadvantage and vulnerable.
To achieve the scale necessary for success, healthcare organizations will need to be big enough to take risks, said Steve Messinger, managing partner of ECG Management Consultants in Washington, D.C. He said many smaller systems are banding together, without the oppressive nature of a merger. Some hospitals are spending so much time integrating two organizations that they do not have the depth to focus on population management.
“Organizations that take their eye off the ball now, as it relates to clinical integration, and spend more time on implementation of a merger, will wake up a year or two from and now find themselves behind their competitors,” said Messinger, who predicts the industry will see more joint ventures for health plan contracting.
Andy Cowherd anticipated more hospital alliances, rather than mergers, in 2014.
Andy Cowherd, managing director of investment banking, including healthcare, for Mesirow Financial in Chicago, reported merger activity declined in 2013 and that may continue into 2014, particularly among nonprofit hospitals. But alliances will continue.
“It’s easier to get a large group of hospitals into an alliance than it is to worry about merging them and dealing with ownership and management issues, and the capital involved is different,” Cowherd said.
Jeff Hoffman, senior partner in the healthcare practice for Kurt Salmon, a global management consultancy company, said he anticipates a continued growth in clinically integrated networks, due to the changes in healthcare, with large health systems taking the lead.
“The biggest reason is the capitalization,” Hoffman explained. “We've seen physicians start them, but to be successful you have to capitalize some level of infrastructure, expertise and skills, data analytics.”
Health systems have the capital to do that and to assume the associated risks inherent in operating such networks, he said.
“Everyone realizes the financial structure of our healthcare model is broken,” Hoffman said. “Organizations are taking a holistic view and realize this is how they will earn revenue--manage people with chronic conditions, and do it well.”
Due to the consolidation and need to practice as teams, Hoffman predicted more physician employment by group practices or hospitals.
“In primary care, the business model that supports the solo or two-person practice is done,” said Hoffman, adding that older physicians nearing retirement may continue their practices in 2014, but physicians coming out of residency want to become employed by a group or hospital.
Salary models completely align incentives and goals of the patient and physician, Messinger said, but the organizations often see physician productivity fall off. He anticipated organizations will create a direct link between value-based measures and compensation, with the current system being unsustainable.
“Hospital and healthcare systems have to be very careful about how they render healthcare, how they document, and their relationship with the medical staff in how they affect change,” said Fraiche, adding that the challenges are great.
Seifert added that not only are hospital acquisitions of practices occurring, but the industry is also seeing an alignment of practices.
“The big push is in the healthcare network and the patient pool,” Seifert said. “It’s all about a population of people.”
The goal is to keep these patients healthy but to have the capabilities within the network to provide acute services, Seifert added. More pay will be delivered with performance-based dimensions.
Other healthcare employment
Healthcare organizations are not fairing as well financially as in the past, and demand for acute-care facilities is down and will likely remain that way. Even so, Seifert said he does not see mass reductions in force but rather surgical cuts.
Retail clinics continue to pop up, which frees up time for physicians to do more care coordination, he said. Moving forward, “practitioners will practice at the higher end of their license,” Seifert predicted.
Lars Thording, vice president at Intralign, a specialty healthcare services company in Scottsdale, Ariz. predicts an increase in the use of physician’s assistants and surgical first assistants.
Nurse practitioners may also see an increasing demand for services this year. Sheila Burke, RN, MSN, MBA, dean of Kaplan University School of Nursing, said she “believes the demand for highly educated primary care providers and consumer-readiness may finally be at the level that reduces many barriers that have previously limited nurse practitioners' scope of practice.”
More providers will network digital files with cloud computing for greater sharing of information on multiple platforms for team-based, better-coordinated care, Wah said.
“Technology will allow us to put the right information in the right place at the right time--in front of the right person to make better decisions,” Wah said. “There is also a clear direction toward care coordination.”
Additionally, Wah anticipated greater use of analytics.
Jason Rose, chief strategic development officer for Inovalon in Bowie, Md., agreed, saying, “The ACA will spark a greater demand for data-driven analytics at the point of care.” He added, “Massive data sets from traditionally disparate data sources must be integrated into a single system where predictive clinical algorithms may be applied on a continuous basis. Strong data governance, through vigorous data integrity checks, ongoing baseline assessments and timely data issue resolution are keys to success.”
Laura Kreofsky, principal advisor at Impact Advisors in Naperville, Ill., said she thinks analytics will start to take off, but not quickly.
“Maturation will happen, but slower than we’d like,” Kreofsky said. Additionally, she expects a good number of organizations “will start hitting the panic button about ICD-10.”
All this reliance on digital information will heighten concerns about security, Wah said. Organized criminals are using data to perpetuate fraud.
“The street value of a health record is 15 to 20 times the value of a credit card,” Wah said. “As health professionals, we need to up our game.”
Healthcare delivery environment
In the year ahead, organizations may seek to improve the care environment as they seek greater efficiencies.
Alan Rheault reported a greater interest on the part of hospitals for sustainable materials.
“Hospitals are looking at Lean principals,” said Alan Rheault, director of industrial design at Nurture in Grand Rapids, Mich. “The built environment is about supporting the workload.”
Rheault reports more interest by hospitals in sustainable materials and long-lasting furniture that is easy to keep clean.
“People’s awareness is heightened,” said Rheault, adding that furniture manufactures are embracing evidence-based design and helping connect individuals by positioning the patient eye-to-eye with the clinician, and helping patients learn better.
Joanne Stone, MD, director of maternal fetal medicine at The Mount Sinai Hospital in New York, said she thinks “the upcoming year will see an expansion of noninvasive prenatal screening to include women under age 35, as well as women over 35, for Down Syndrome, and also will see the expansion of the screening tests for some other selective disorders involving deletions of small parts of the chromosomes.”
Also at Mount Sinai, Kristjan T. Ragnarsson, MD, the Lucy G. Moses professor and chairman of the department of rehabilitation medicine, said, “In the year 2014, there will be growing evidence that people with paraplegia caused by spinal cord injury can recover significant walking skills with the use of electrically powered robotic exoskeletal devices.”
Mount Sinai also has created the Preventable Admissions Care Team (PACT), a program where psychosocial drivers of readmission are assessed and addressed through a 35-day social work-led intervention that begins upon discharge. Through personalized follow-up care, PACT has been successful in reducing 30-day readmissions by 56 percent and emergency department visits by 51 percent for high-risk patients, said PACT’s medical director, Jill Kalman, MD.
Wah reports greater patient engagement in personal health will continue in 2014. Patients will continue to come to appointments with research and an opinion.
Hospitals and other providers will pay more attention to the patient experience. Health systems, for instance, are investing in urgent care centers, call centers to eliminate hassles for patients, and hiring navigators to help patients find their way in complicated systems, Messinger said.
“Patient satisfaction is a growing component in physician compensation plans,” added Messinger, with healthcare looking to other industries for ways to improve customer service.
“They are interested in making sure patients have an excellent experience, so they come back,” Seifert said. He explained that ACOs cannot afford to lose patients.
“If patients leave their networks, they lose control of managing the patient in a way they need to,” Seifert said. “They know consumers have choices.”
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