4 Tectonic Shifts Shaking Up Healthcare

The changes happening in the healthcare industry are just getting started. Risk-based reimbursements, HIX, high-deductible health plans, and possible pushback against Medicare and Medicaid will transform healthcare delivery and payment.

When Andrew Croshaw, president of Leavitt Partners Consulting, spoke at the Healthcare Financial Management Association’s recent ANI conference in Las Vegas, he compared the changes currently happening in the healthcare industry to tectonic movements in the earth.

Health reform legislation is creating "tremors" that will bring massive changes to the way hospitals and health systems deliver care and receive payment for services, he says.

Healthcare executives "are taking part in and leading what could be described as the most volatile time in healthcare that we have witnessed," he says.

Croshaw, who also served as a senior executive advisor to former HHS Secretary Michael O. Leavitt and as a project leader for HHS’ Value-Driven Healthcare Initiative, identifies four forces that could lead to major changes for hospitals and health systems:

1. Risk-Based Reimbursement

One of the most significant "emerging landscapes" for its potential impact on provider organizations is population health management and the movement toward risk-based reimbursements, Croshaw says, adding that the model will have to be used on a large scale in order to be truly relevant in the long term.

"One of the ways you can measure this is to measure the number of providers entering into risk-bearing arrangements with payers," he says. "We believe until you get a substantial portion of the covered lives in the market into these arrangements, it is difficult for providers to put their heart and soul into this exercise."