• Moving to

    New Billing system?

  • Stuck With

    Legacy AR?

  • High / Aged

    AR Days?

2016 Healthcare Year in Review

December 14, 2016

 

The spotlight on the healthcare industry grows brighter every day.  The industry is facing immense scrutiny on every aspect of the clinical and business drivers.  Healthcare delivery is morphing from a fragmented multi-organizational industry to a more consolidated business structure where major players are merging or acquiring smaller entities.  This consolidation transition is happening within a complex, highly regulated and systematized industry.  Healthcare delivery is at a crossroads with its consumers.  Patients have more control over who provides their care, how it is paid for and the way it is administered.  Consumerism is flourishing, and patients now have new tools that provide them with more transparency and control, allowing them to be better prepared to navigate the care continuum.

 

It is encouraging that consumers have new tools, but how are providers faring in an industry turned on its head by evolving financial models that are moving reimbursement from volume to value?

 

A recent report by the American College of Healthcare Executives (ACHE), "Top Issues Confronting Hospitals 2015," reported that financial challenges ranked number one on the list of hospital Chief Executive Officers’ (CEO) top concerns.

 

In the survey, ACHE asked respondents to rank 10 issues affecting their hospitals in order of how important they are and to identify specific areas of concern within each of those issues.  Following are some key results from the survey, which was sent to 1,054-community hospital CEOs, of whom 350, or 33.2 percent, responded.

 

Financial challenges were the top concern for CEOs in 2015 and it looks like it will be the same in 2016.  The survey results below suggest that executives are closely monitoring their organization’s financial strategy and are seeking innovative approaches to bolster their organization's coffers.  The following are the results of the 2013-2015 surveys:

American College of Healthcare Executives
"Top Issues Confronting Hospitals 2015,"

 

Within each of these 10 issues, respondents identified specific concerns facing their hospitals.  The following are those concerns broken out from the financial category:

 

In 2016, the health industry has experienced a cataclysmic shift in its business model and its only constant has been change.  The industry is evolving so quickly; many organizations are struggling to keep up let alone staying ahead of the curve.  What have been the key areas of change in 2016?  In a PricewaterhouseCoopers' Health Research Institute  survey, they answered those questions by projecting the top 10 healthcare trends shaping the industry in 2016.  They are:

 

  1. 2016 is the year of merger mania.  By mid-year 2015, healthcare stakeholders closed merger and acquisition deals valued at nearly $400 billion.  In 2016, executives created unconventional partnerships across all segments of the industry. 
  2. Goldilocks comes to drug prices.  Drug pricing appears to have reached a peak in 2016.  With the rise of high-deductible healthcare plans, consumers have become increasingly frustrated with high drug prices.  Pharmaceutical companies have contemplated new pricing models where the focus is on conveying value and justifying the cost of drugs. 
  3. Care in the palm of your hand.  Consumers continue to use their smartphones and tablets for health monitoring, but they also are leveraging technology to provide anywhere, anytime diagnosis and treatment.  From "bedless" hospitals to smartphone medicine, remote care delivery is increasing.  This year, consumers have increasingly been willing to visit their physician using their mobile device.
  4. Cybersecurity concerns come to medical technology.  For the first time in 2016, medical devices such as insulin pumps may see real threats from hackers.  Device companies and healthcare providers have taken steps to secure medical equipment as well traditional data sources.  Improving network architecture and design has been a strong focus, attempting to prevent breaches that can cripple a provider.
  5. The new money managers.  Consumers have begun to manage their health spending as they manage their retirement savings.  Patients are responsible for paying more for their care directly out of their pockets.  Providers are finding new ways to solve payment problems, which include solutions such as offering innovative financing for bundled services and linking spending to rewards, similar to the way airlines offer frequent flyer miles, discounts or points.
  6. Behavioral healthcare: no longer on the backburner.  Behavioral health has become a key issue in 2016.  One in five American adults experiences a mental illness every year.  These conditions cost businesses across the nation more than $440 billion annually.  Employers and healthcare organizations are becoming more proactive in addressing behavioral health issues to keep costs down, productivity up and consumers healthy.
  7. Care moves to the community.  Reducing health costs has been part of the healthcare conversation for years.  However, with mounting budget pressures, health organizations have become more creative than ever before by pursuing lower-cost care settings such as virtual telemedicine and retail clinics.  
  8. New databases improve patient care and consumer health.  High hopes surrounding big data investments in healthcare may have been unrealistic in the past.  Converting large and diverse datasets into practical insights is a large challenge for any hospital or health system.  Nevertheless, in 2016 the emergence of non-relational databases has changed that.  Hospitals and health systems are finally able to use the large quantity of data they have collected.  Newer non-traditional databases make it easier to bypass the rigid structure and analyze many different forms of data together.
  9. Enter the biosimilars.  Biosimilars, products used in medicine that can only be generated from living organisms, have reached the U.S. market in 2016.  Four more biosimilars are poised for approval, with another 50 under review by the Food and Drug Administration.  PwC's HRI estimates these substitutes for branded biologic drugs will start to offer some counterweight to rising drug prices.
  10. The medical cost mystery.  Health systems command billions of dollars in revenue, but they often cannot identify the cost of the services they provide.  Stakeholders have pushed for creating more value while still controlling costs.  By following this new model, they have uncovered new opportunities for cost reductions, efficiency and improved care.

2017 and Beyond

 

The health industry must continue to innovate in every aspect of the business.  Those who do not demonstrate their willingness to change will likely end up going away (i.e., out of business).  Healthcare executives can learn from history, by studying a notable company, Apple Computers.  When Steve Jobs returned to Apple after his 12 years of wandering, the company needed a controversial $150 million investment from “arch rival” Microsoft to stay afloat.  Many in the banking community and some of the world’s top business executives felt it was a bad investment.  In fact, Michael Dell, the founder of Dell computers said, “I’d shut it [the company] down, and give the money back to shareholders.”  Rather than give up, Jobs was able to use these “indignities” to fuel an amazing comeback.  In a very short period, Apple has grown into the most valuable company on the planet.

 

Just like the computer industry, healthcare is advancing at a velocity never experienced in its history.  Next year promises to be another year of significant change.  Organizations that can determine the most appropriate path for their business and the right speed to adapt to change will ultimately survive.  Those organizations adverse to change that prefer operating in the status quo are destined to fail.  General Eric Shinseki, a retired United States Army general who held the position of Chief of Staff of the Army and served as the U. S. Secretary of Veterans Affairs offered his advice on the ability to change.  He was quoted as saying “If you don't like change, you will like irrelevance even less”.

2017 © MiraMed Ajuba International LLC. All Rights Reserved.