“We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.” – Bill Gates
We are in the early stages of a period of change that will be significantly more disruptive and transformative than is true during the normal periods of change – but that is perhaps lost in the swirl of more immediate changes and requirements that we all confront regularly. This unique period in the history of healthcare delivery may powerfully substantiate Gates’ observation: the health care system is likely to end up looking dramatically different ten years from now than it does today.
It’s hard to dispute that the American health care system is in need of a significant overhaul. First consider the cost drivers. In his book, Reinventing American Health Care, Ezekiel Emanuel cites the fact that healthcare costs represented 8% of the GDP in 1975, but by 2014 this figure had grown to almost 18%, because the growth in healthcare costs had consistently outpaced the growth of the economy. This is unsustainable. Add to the cost picture the results of a 2014 survey of 11 developed countries that found the U.S. ranks worst in terms of “efficiency, equity and outcomes."
Making predictions can be dicey, but it’s safe to predict that the combined cost and quality trends force us to recognize that these are not just passing currents, or this week’s political fodder. Rather, they represent compelling reform drivers that will not abate unless and until there are substantial adaptive changes in the health care delivery system. That process has already begun, and I believe it is irreversible.
It’s highly unlikely that this transformation will be neat and tidy, where old ways of doing business quickly and completely give way to new adaptive imperatives and solutions. The change process will be all the more difficult to navigate as the effects of deep political and ideological divisions express themselves in the search for appropriate solutions. It’s far more probable that the provider community is unfortunately going to spend a number of years simultaneously managing the requirements and process realities of today’s healthcare environment, while being irreversibly propelled toward entirely new ways of doing business.
Some of the reform efforts, while seemingly logical, represent unproven experiments, and only time will render the verdict on whether they are sound. There will a probably be a number of course corrections along the way toward sustainable systems solutions that we hope measurably impact the core cost/quality problem metrics over the next ten years. This will likely be an unsettling time for provider organization leadership.
Six changes to watch
What changes will the delivery system have to to adapt to? Here’s a short list of the big ones:
1. Rise of “pay-for-performance or value” systems and decline of “fee-for-service” reimbursement systems.
At their core, such reform initiatives (for example, CMS value-based purchasing programs, or the Massachusetts Medicaid's hospital-based pay-for-performance program, or the more recent Delivery System Reform Incentive Payment (DSRIP) Program in New York) seek to replace traditional fee-for-service systems with payment that is more closely tied to any of several types of performance measures (e.g. process, outcome, patient experience or structure measures). These ideas are attractive to policy makers who believe that the financial incentives of fee-for-service systems are at odds with improved cost management and quality aims.
Several provisions of the Affordable Care Act (ACA) add significant momentum to these policy trends – for example, provisions for Accountable Care Organizations in which providers agree to coordinate care and to be held accountable for the quality and costs of the services they provide.
While the results of some of the early reform initiatives have been mixed, as I’ve predicted above, our current cost and quality problem metrics are so compelling that it’s hard to imagine that we’ll reverse course on significant efforts at reform such as this.
2. Incentives and requirements to provide integrated care.
This is another face of the pay-for-performance systems described above, but requires some different adaptations. The ACA provisions that support patient-centered medical homes (PCMHs) and accountable care organizations (ACOs) are centered on the idea that interdisciplinary provider teams will deliver coordinated care; for example, coordinating primary care with behavioral health care. Various models to accomplish these aims are in the early stages of experimentation.
Central to the premise of integrated care are integrated data systems, specifically, some form of interoperable client health record systems. While many hospital-based systems have moved down the road in implementation of things like electronic health record systems, this is less true in other subsectors of the healthcare provider community. And by many accounts, seamless communication amongst these systems is still a problem.
Mastering the challenges of integrated care will be required to improve our unfavorable cost and quality metrics.
3. Changing population demographics.
The US population is aging and becoming more culturally diverse.
According to the US Census Bureau, by 2030, more than 20% of U.S. residents are projected to be aged 65 and over, compared with 13% in 2010 and 9.8% in 1970. Survivorship rates have also improved over many decades. The combined effects of these trends on the provider community will fan out in many directions, among which may be the impact on Medicare payments; the demand side in the chronic, long-term care services sector, and the type and complexity of conditions seen by the primary care sector as aging baby boomers walk through the clinic door. There are also perhaps less obvious implications, such as clients in the IDD sector who may no longer be able to count on aging family caregiver resources for essential community supports.
Leaving aside the complex subject of ethnic identity versus ancestry, the US Census Bureau forecasts that the U.S. is projected to become a majority-minority nation for the first time in 2043. While the non-Hispanic white population will remain the largest single group, no group will make up a majority. Without drawing out all the implications in detail, it is safe to predict that the provider community will have to continue to retool to be responsive to ethnic-cultural needs and expectations. This shift may also have substantial implications for workforce recruitment.
4. Increased demand because of more universal insurance coverage.
The Affordable Care Act is expected to substantially decrease the number of uninsured people. Will there be a growth in demand on the provider community once more people have coverage? The consensus seems to be that the number of annual primary care visits will increase by a manageable 4%. However, the increase in demand will not be the same across all states and areas within states. In areas where people use more health care services, it may be important to expand access by making greater use of health information technologies such as telemedicine, by relying more on non-physician health professionals such as nurses and physician assistants, and by other means.
5. Demand for more effective prevention services to contain costs, especially tertiary prevention.
One way that cost drivers will express themselves is though expectations of more widespread and effective prevention efforts -- “an ounce of prevention is worth a pound of cure.” Some of the data on the cost impact of primary and secondary prevention are equivocal. But folks like Michael P. Pignone of the University of North Carolina argue that tertiary prevention has more substantial promise. Tertiary prevention aims to soften the impact of an ongoing illness or injury that has lasting effects and includes things such as disease management, post-discharge care, and case management for key chronic conditions. I believe there will be continued pressure to refine and more broadly implement effective prevention strategies to lower costs and improve long term outcomes.
6. Technology and Data.
Technology trends are likely to express themselves in at least two general ways: Through what are sometimes referred to as “technology extenders,” such as mobile telemedicine, and real-time collaborative tools and electronic monitoring systems such as a “virtual bedside” with the capacity to transmit secure data from such devices to smartphones and tablets; and secondly through more widespread use of interoperable electronic health record (EHR) systems. The adoption of these systems has been incentivized by the HITECH Act. EHR systems will directly improve immediate patient care and clinician communication, but -- perhaps less obviously -- will provide reliable data sets that make possible the analysis required to provide evaluative insights into the client population health trends, service utilization volume, and service patterns. The technology retooling required to support these needs will be very challenging for many members of the provider community.
Of course this isn’t an exhaustive list of the change drivers that will require adaptation, but these six represent substantial challenges. As with other large-scale, foundational system changes, some organizations are likely to ultimately prosper as this unfolds, while others may perish. The survivability of some organizations may well require the consolidation of some smaller providers or the formation of entirely new alliances and networks to be a strong, contributing member to a reformed system of care. The workforce training and development needs that will surface cannot be overstated, beginning perhaps with sound change management strategies and supports.
What’s your take on the long-term outlook for the healthcare environment? Do you see other drivers having a larger impact? We welcome your perspectives and comments.