By Steve Liu, MD, Founder & CMO, and Jim Hall, Chief Revenue Officer
As we look ahead to a new decade and a year whose very number – 2020 – reflects the need for excellent vision and foresight, it’s relevant to consider the key factors driving change in the year ahead.
Our top five predictions for 2020 all concern the need to contain costs by making healthcare delivery more efficient and effective. It requires a shift from formulating strategies at the upper levels of healthcare management to executing on those strategies at the “last mile” of patient care – the places where physicians put plans into practice. If organizations want to achieve their goals, it’s critical they align employed and affiliated physicians and other front-line teams to support their strategies. Technology plays a key role in making that happen.
1.) Cost containment pressures will accelerate
Healthcare technology will be shaped by this year’s election. Whether Medicare for All proves to be a winning strategy remains to be seen; but with opposition on multiple fronts, a complete overhaul of healthcare reimbursement models would prove challenging.
However, even in the absence of national election-related policy changes, we’re at a tipping point given that healthcare will likely consume 20 percent of GDP. That means we should be primed for deliberate, continued evolution of healthcare reimbursement models in the years ahead. Many providers have been preparing by accumulating assets to deliver more care outside the hospital, yet still within their networks. They’ve been employing physicians, acquiring or partnering with lower-cost post-acute facilities, establishing urgent care centers, etc. They’ve also engaged in a frenzy of mergers and acquisitions to align and prepare for value-based care models.
In addition to the continued focus on top-line revenue-cycle enhancement (with an emphasis on proactively capturing revenue correctly at the point of care), providers will emphasize managing their cost basis to improve operating margins. Organizations may not succeed if they do not evolve their internal processes and structure to better perform under the coming value-based reimbursement models. Nothing moves fast in healthcare; change may be incremental, but it must happen at some level starting now.
What does this mean for healthcare tech companies? Practices are accelerating the demand for more automation to improve resource-intensive, costly tasks and processes – and they’re willing to spend money on it. It may not be cutting-edge, but it’s the essential building block for turning strategy into action. To coordinate care, practices must better exchange data between IT vendors across the care continuum. Automating manual processes will help providers focus their resources on the more important task of high-quality patient care.
Due to the successful efforts of Meaningful Use, most health systems now have an EHR infrastructure in place. Their focus is now on optimizing their new EHRs and recognizing and filling in the gaps that exist between their strategic needs and what EHRs can actually deliver. Interoperability remains a significant challenge and burnout has skyrocketed with more technology in the hands of physicians. There’s a growing need for technology solutions that can complement the EHR, improve productivity and align physicians on improving revenue and quality.
Part of improving margins and reducing cost footprints is shifting care from hospitals to less expensive sites where it can be managed just as effectively. Likewise, now that the pace of physician group acquisitions has slowed, health systems will need to reach across the table and begin aligning more closely with their affiliated physicians if they are to effectively take on value-based care.
Technology needs to bridge the gap to providers in these other settings, which typically have fewer tools and automation than inpatient settings. Mobile tools enable physicians to improve care coordination and documentation regardless of the care setting.
2.) Value-based care models, including Medicare Advantage, will grow
After a period of slower-than-expected growth, we believe that value-based models are poised to take off again in 2020. Medicare Advantage likely will lead the charge; L.E.K. Consulting predicts that enrollment will grow from about 20 million (35 percent) in 2017 to 38 million (50 percent) of all Medicare enrollees by 2025.
Many of our customers have undergone monumental infrastructure changes as they take on value. This has resulted in turmoil and power struggles for some, but there are signs of progress. In previous years, we mostly heard about health system struggles. Now, health systems were better positioned because they had completed consolidation activities and become more efficient, preparing themselves for a value-based environment. And we’re starting to see the shift from CEOs talking about value-based care in presentations to execution by clinicians at the care delivery level.
Still, there are lingering issues. The spiraling cost of medications, for example, is becoming an ever-increasing drag on value, and it’s unclear that Congress will take action. Regardless of future payment models, we need to overhaul how we approve drugs, make them available to consumers and manage costs.
Tech companies will need to provide tools that help providers and health systems optimize their work, track and benchmark their performance and manage their cost of care, whether they are operating in a fee-for-service or value-based environment.
3.) Disruption from non-traditional competitors will accelerate
Disruption from non-traditional competitors is coming from numerous directions – including major employers, retailers and tech giants – with significant crossover between them. On the employer side, Haven (the joint venture between JPMorgan Chase, Amazon and Berkshire Hathaway launched in 2018) now has a name, website and CEO. Their initial focus is on lowering costs and better meeting the healthcare needs of their 1.2 million combined employees; their long-term sights are likely to have a far-reaching impact on healthcare delivery costs. Cisco Systems is an example of a large employer that is bypassing insurers to contract directly with health systems.
CVS Health’s purchase of Aetna (approved in 2019) is the first time a massive pharmaceutical retailer has combined with a major insurer. Some predict that this merger could increase premiums and drug prices. Private equity firm KKR has approached Walgreens with the goal of taking it private. While these moves may result in more consumer-friendly care, their impact on costs remains to be seen. Regardless, they represent an important shift in pharmacy and ambulatory care delivery.
4.) Behavioral health will continue to become a key part of care delivery/coordination
Behavioral health has been gaining more traction as a key component of overall health. One of our goals is helping providers create an ecosystem that better coordinates care. Our care coordination tools can be used by primary care physicians, oncologists, behavioral health clinicians, care navigators and population health leaders to improve care and reduce costs.
Getting all of these players to work together within a health system involves many moving parts. It also requires building teams that can coordinate care seamlessly from hospital admission to discharge to post-acute care and back to the ambulatory setting.
5.) Health systems will have to do more to reduce physician burnout
This issue received a lot of attention in 2019, but we have long way to go in addressing it. To free up physicians’ time, tech solutions must deliver workflow automation and user-friendly interfaces. Improving the revenue capture and coding compliance workflow, for example, eases physician burden while enabling health systems to capture more revenue and enables physicians to better focus on quality patient care. We’ve heard loud and clear from customers that good point-of-care tools are critical to reducing burnout.
Perhaps a less obvious use of technology is something one of our customers is doing – using analytics to help identify physicians whose productivity levels are so high that they are at risk of burnout. Administrators can then work with that physician to adjust their workload accordingly.
Bridging the last mile to execute on the ground
As value-based care takes hold, healthcare organizations must translate higher level strategies into execution on the ground. In the coming years, health systems that have effective tools to align clinicians at the last mile will be more successful regardless of the exact payment model. With value-based payment here to stay, organizations need to influence clinician behavior by making it easy to measure and influence productivity, utilization, quality and other variables.
Credible, timely and standardized data at the point of care will help you translate strategy into action. Making that data easy to access and interpret so that end users can track their revenue and care will give you the biggest return on your investment.