From the evolution of value-based care to regulatory change and technology-enabled solutions, there is plenty to keep healthcare leaders up at night. Here’s an overview of changes happening now and a glimpse what can be expected in the future.
New trends in people’s behavior
Our country’s healthcare system is no stranger to change. Still, the COVID-19 Pandemic severely tested healthcare delivery—as much as it tested any sector of the economy. Providers and healthcare organizations had to quickly adapt how they engage with people. It is hard to imagine a better example of building the plane while flying it.
For one, the pandemic advanced adoption of virtual care and new digital tools. COVID launched telehealth 10 or 20 years forward in a matter of months. Healthcare providers and organizations scrambled to get people on telehealth platforms. Those who resisted it had no choice but to test the waters. Payers had to accept reimbursement requirements.
Safe to say virtual care is here to stay. That’s a good thing—it opens greater access to care, enhances the personal experience, and brings us closer to true person-centered care.
During the peak of the pandemic people put off going to the doctor for medical care, preventative visits, and even routine chronic care visits. More traditional patterns in patient behavior are returning, but with important differences.
One concern: When all those people that decided to forgo preventative care, chronic illness visits, and lab tests do return, it may be at higher acuity and cost. In addition, there is still a need to diagnose, treat, and vaccinate people against COVID.
Changes to costs and encounter volumes
Year-over-year healthcare spending and utilization declined in early 2020 due to cancelled elective, preventative, and non-emergent care—the consequence of social-distancing concerns and the need to make room for much needed hospital capacity. Ambulatory settings and alternative delivery methods like telemedicine, urgent care, and retail clinics replaced traditional low-acuity hospital visits.
By the end of 2020 and early 2021, utilization and spending rebounded close to pre-pandemic levels, but uncertainty remains about how the pent-up demand for healthcare will impact premiums. Some experts anticipate as much as 7% to 10% increase in annual premiums in the year ahead.
Evolution of value-based care
Apropos to cost and care, CMS’s value-based care initiative seeks to improve outcomes and control costs over fee-for-service. It’s not surprising this initiative comes from Medicare programs where spend is high. CMS puts significant energy into programs like Medicare Shared Savings Program (MSSP) and Accountable Care Organizations (ACOs) to align quality and cost goals.
CMS’s most recent value-based care initiative is Geographic Direct Contract Modeling. Also known as the Model or Geo, this is a new payment and care delivery model being tested by the Centers for Medicare & Medicaid Services Innovation Center. Its goals are to:
- Encourage state Medicaid programs and commercial payers to tie reimbursement to outcomes
- Transform risk-sharing in Medicare fee-for-service
- Allow beneficiaries more control of how they receive healthcare
- Empower providers to meet their population’s needs more effectively
Direct Contracting Entities serve as the administrators for specific regions and will have more control over how providers are funded. The intent is to improve care coordination and delivery, leading to more favorable outcomes for beneficiaries. These efforts, in combination with other key regulatory developments brighten the picture for the future of our healthcare economy.
Key regulatory and legislative developments
2021 introduced several key developments intended to drive much-needed changes to peoples’ healthcare and rights.
E-prescribingCMS now requires electronic prescribing of controlled substances (EPCS) for Medicare Part D. People can now take advantage of more modern technology and convenient workflows for critical medications.
New medical devicesCMS will allow Medicare coverage for new medical devices considered innovative under the Medicare Coverage of Innovative Technology (MCIT) pathway, part of the 21st Century Cures Act.
Surprise billingWhen people have no reasonable alternatives available within their medical networks and turn to out-of-network providers, they may receive unexpectedly high bills without being forewarned. Recent legislation seeks to end surprise bills for out-of-network services.
Price TransparencyCMS finalized a rule to modernize the Medicare Advantage and Part D prescription drug programs, helping consumers more easily compare prices for their medications. This rule is expected to save the federal government more than $75 million over 10 years.
To understand and better prepare for the uncertain times ahead, healthcare leaders will need to establish true north. They will need to develop rich data sources and intelligent analyses to evaluate business decisions and guide strategic direction. Teams should focus on leveraging data to identify needs, opportunities and goals, prioritizing strategy over traditional budgeting practices.
Reporting requirements have changed to favor shorter-term forecasting over long-term planning. Predictive analytics will help healthcare leaders understand dynamic trends driven by unknown fluctuations amidst the pandemic. Managing cash burn rates and understanding operating costs will help organizations stay on track to achieve their required business outcomes.
Protect your mission, stay competitive
With so much change afoot, partnering with a trusted advisor and having access to carefully cultivated data is essential to protect your organization’s mission, vision, and values while staying competitive in today’s healthcare economy. A trusted healthcare revenue cycle advisor can ensure your organization is tracking towards success. Practice Management solutions can offer actionable insights through thoughtful reporting solutions such as predictive cash modeling, expected allowable analysis, encounter detail trends, telehealth utilization, and more. Savvy leaders will take advantage of technology and seek strategic partnerships to establish a clear view of what’s on the horizon.
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