In the next phase of the healthcare reform law's implementation, providers will be the primary focus of the reform revolution.
Ariel Linden, DPH |
Healthcare payers have been bearing many of the heaviest burdens in the first phase of implementation of the Patient Protection and Affordable Care Act. Now, the heavy lifting is shifting to providers.
For payers, the PPACA has upended business models through regulatory edict, created an individual insurance market from a scratch exchange recipe, developed new payment models such as accountable care contracts, and introduced a bevy of new competitors including insurance cooperatives and technologically savvy startups.
Faster is Better When Shifting Business Models
For providers, the PPACA journey has just begun, with thousands of health systems, hospitals, and physicians struggling to keep pace with the first wave of reform. Providers have clamored for repeal, revision or delay of several key federal reform initiatives such as the two-midnight rule for determining patient admission status at hospitals, Meaningful Use requirements for information technology and price transparency for healthcare services.
In their regulatory struggle with providers, federal officials have not only the law, but also the logic of accounting on their side.
Providers are the big spenders in the healthcare industry, according to data collected for the National Health Expenditure Accounts, the country's official healthcare spending statistics tallied at the Centers for Medicare & Medicaid Services.
In 2013, NHEA data pegged healthcare spending at $2.9 trillion. Spending for hospital, physician and clinical services accounted for more than half of the total, at $1.5 trillion. When accounting for other provider services such as dentistry, home health, and long-term care facilities, the provider share of the healthcare spending pie rises to $2.1 trillion in 2013.
Big Spenders
Providers had a hand in an additional $314 billion in 2013 healthcare spending through prescription drugs and costs for prescribed durable medical devices such as eyeglasses and hearing aids.
Ariel Linden, DPH, lead author of a study published in October that cast doubt on the effectiveness of hospital readmission reduction efforts, says providers face a daunting healthcare reform odyssey. "In some areas, they're pretty far along, but in others, they're not even on first base," he told me recently, citing Meaningful Use as the poster boy for provider reform quagmires.
"Even though it's written into law, there are many organizations that are falling behind. Are they sharing the data with their partners? Most of them are not."
The reformist push for value over volume is just beginning to overturn the fee-for-service business model that providers have embraced for generations, Linden says.
"What do they need to make the right clinical decisions that generate the most value? They're in the process of just thinking about it. This industry is only in its diaper. Providers are not getting the data they need… We don't have clear evidence, as a system, where we know clearly what works and doesn't work. Providers need a clear pathway to what they need to do."
Peter Angood, MD, president and CEO of the Tampa, FL-based American Association for Physician Leadership, says the absence of rigorously established standards for clinical care is a massive hurdle for providers to clear in the value-based healthcare revolution.
Recently, he told me that providers desperately need "appropriately focused and realistically representative metrics and measures for clinical care that are accurately coordinated with public reporting."
The establishment of evidence-based clinical standards is vitally important to the effort of transforming patients into powerful economic agents, Angood says.
David Burton, MD |
Price transparency poses a similar challenge for providers in their role as one of the midwives in the birth of healthcare consumerism, Angood says. "Cost and pricing transparency remains one of the biggest obstacles for better understanding the value equation. Value equals quality divided by cost. We do not yet know how to optimally define quality as a numerator; and the denominator of cost is not easily understood because of the lack of transparency."
2 Accelerators
David Burton, MD, developed managed care health plans at Salt Lake City-based Intermountain Healthcare and has served in several top leadership roles at Health Catalyst, a data analytics firm in the Utah capital. He says there are two kinds of "accelerators" providers need to push as they weather the next wave of healthcare reform: mastery of data integration and clinical content.
Burton says providers and their vendor partners must develop data integration technology that is capable of combining information from several disparate electronic sources such as claims records, clinical records and financial records. Combining this data provides the level of granularity in patient records that is required to achieve success in major provider reform initiatives such as care coordination, cost control and quality improvement, he told me recently.
"If you have to recreate the wheel at every provider, this process isn't going to go anywhere. EHRs have sought to make clinical data 'machine readable.' The next [information technology] accelerator has to do with data integration and the creation of data warehouses. Can you get the data flowing? Can you integrate the data?"
"Clinical content accelerators" are needed to help providers establish best clinical practices and conduct a population-management-based approach to the delivery of healthcare services, Burton says. "It begins with a new mapping schema. You get a much more accurate picture of acute care than just looking at inpatient care." Effective data analytics in the clinical realm must draw data from settings beyond inpatient facilities including outpatient settings such as retail clinics, he adds.
The most potent clinical content accelerators are based on precise patient registries and are capable of tracking outcomes such as cost of care and mortality rates, Burton says. "It's not a bottomless pit, but it is a fairly ambitious undertaking."
The effort requires using data to define best practices in about a dozen primary clinical areas for hundreds of "care processes." As an example of bringing this data analytics muscle to bear on clinical content, he cites cardiology as a primary clinical area and coronary artery bypass graft surgery as a care process worthy of close scrutiny. "With the use of good analytic techniques, you can concentrate on the big processes, so it doesn't seem that you're pushing against the ocean."
Christopher Cheney is the CMO editor at HealthLeaders.