I recently read an article in the NY Times talking about an “unexplainable” sharp and persistent slowdown in the growth of healthcare costs. It has been followed by others, such as this one from USA Today, that have begun attempting to shed light on the reasons why. Contrary to the partisanship rhetoric from our lawmakers, change is occurring and we’re heading in the right direction. Healthcare Reform (HCR) is working. I’ll talk about the “with some help” later. The challenge with HCR is that it’s very large, complex and the value the nation derives from it is the sum of all its parts, such as Accountable Care Organizations (ACOs), Meaningful Use, ICD-10, enhancements to HIPAA (not to mention giving it some teeth and putting Business Associates on notice [page 5566, column 3, first bullet]). Also to consider are changing reimbursement schemes that are moving away from the fee-for-service to bundled payments focused on quality and outcomes, Health Information Exchanges (HIEs) requiring providers to share records and avoid duplicative/unnecessary tests, upcoming Health Insurance Exchanges (HIXs) that create a more affordable way to buy health insurance, driving the provider community and EMR/EHR software houses alike to more broadly use technology that not only focuses on each encounter, but looks beyond to the continuum of care for the individual and the population. With this longitudinal view comes a focus on the quality of care, driven by both the incorporation and reporting of required quality measures, but also through having readily available information. In addition, with much of the clinical data now in a transactional system and “structured,” it can be leveraged for decision support or business intelligence, both tactically at the point of care and strategically by driving investment and improvements in care.
This positive change is catching many by surprise. Some have continued down the party path, for example, the recent decision to not participate in some aspects of HCR by North Carolina, while others, such as Gov. Rick Scott of Florida, have done an about face. The divisiveness has been around Medicaid Expansion and Health Insurance Exchanges (HIXs). For the latter, if the state will not establish an HIX, the Federal Government will and they will control the review and “publishing” of Qualified Health Plans (QHPs) to be offered to each state’s population where there isn’t a local or regional HIX. For Medicaid expansion, the Federal Government will fund the first three years, then revert to 90% for the next seven years. That’s a great deal of money for the states to leave on the table and 10 years is a long time. Again, the challenge and arguments against are looking only at the specific components and missing how they fit in with HCR in general. Each piece has a role to play. There are so many components to HCR that trying to measure the performance or impact of a specific one is not a good indicator of what’s going on overall.
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For an example of a broader, potential long-term impact of HCR is what the currently insured people pay. For example, with subsidized coverage through HIXs and Medicaid expansion, we’ve been told that healthcare spend will go up as the uninsured will now have access to insurance which will have to be paid. Well, it will, if the providers don’t adjust their pricing. What does adjust pricing mean? If you look at the cost side for providers today, all of the costs they incur to “service” the current uninsured, including salaries, supplies, insurance, facilities, etc. are built into the pricing that those with insurance are charged. If the past uninsured now have coverage, with their bills now being paid, and the providers don’t adjust down their pricing, anything the providers now receive for what used to not be paid will drop directly to the bottom-line, pure profit. Ideally, the current spend will not change, it will be redistributed.
I promised to explain my comment “with some help.” This refers to other, maybe coincidental, changes with society and the population as a whole. Prospective patients are better educated about the appropriate use of healthcare. After a decade or more of being inundated with information, people are getting smarter about how to take care of themselves, eating better, exercising, preventive care and so on. Consumer technology is playing a role here as well. Being informed means just that, better access to information on one’s self, how to measure your health against baselines or benchmarks. The huge growth of smartphones has taken information consumption to a new level. Individuals desire to have easy access to everything about themselves, tweeting and Facebooking it to family and friends, creating a heightened level of engagement. Social media and concepts such as gamification are having their impact. Whether it’s an app that tracks your route and distance, sharing it every time you walk or run, or a health wellness app that has you tracking your personal health score, much like you track your credit score, telling you what you can do to increase it. This level of consumer driven engagement or “pull” will continue to have a positive impact on people health and healthcare spending.
The “production” side, better known as Providers, is now experiencing what many in other industries did in the 90s and last decade. They’ve rolled out or are close to completing the roll out of transactional systems to support an Electronic Medical Record (EMR). With this transition from paper to electronic records (EHRs), there is now a big desire to do something with all of that structured data. Over the last year or so, the requests for assisting with Analytics and Business Intelligence (BI) efforts have grown dramatically. A good example of this trend could be seen at the HIMSS conference that just concluded. Everywhere you looked, someone had a BI offering. That’s all well and good, but there’s no short-cut to getting good BI and it requires an investment on par with what was spent deploying the EMR systems. The first steps need to be focused on Data Governance, Data Management, defining your organizational goals and strategies and the value expected to be derived. It doesn’t pay to rush in and begin grabbing and trying to use what seems like readily available data. The best approach is to tackle this huge demand by incrementally building out the organization, processes and procedures required. This ensures that the subsequent consumption is appropriate, value-adding, needed and timely. When was the last time the “big bang” approach really worked or took hold within an organization?
With any effort of great size and complexity, there can be misunderstandings and misinterpretations at the beginning. It doesn’t get any bigger than Healthcare Reform. There are a couple of analogies that come to mind, like you can’t eat an elephant in one bite, nor can you turn a super tanker on a dime. Healthcare reform is more like a herd of elephants or fleet of tankers. But have faith, it is beginning to work, and we should be looking for positive refinements as it is dependent on 300 million people continuing to take better care of themselves…