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Healthcare Trends and Implications2010–2015

Futurescan

FuturescanCo-sponsored by:• Society for Healthcare Strategy and Market

Development of the American Hospital Association • American College of Healthcare Executives• With Support From Thomson Reuters and VHA Inc.

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American College of Healthcare Executives

• Professional society of more than 30,000 healthcare executives—Leaders Who Care

• Board certification in healthcare management as ACHE Fellows (FACHE®)

• Foremost continuing educator for the field• Leading healthcare management publications:

– Health Administration Press books– Journal of Healthcare Management, Frontiers of Health

Services Management and Healthcare Executive• Fulfilling our vision to be the premier professional

society for healthcare executives dedicated to improving healthcare delivery

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Society for Healthcare Strategy and Market Development

• Personal membership group of the American Hospital Association

• Serves more than 4,400 healthcare planning, marketing, and public relations/communications professionals

• Committed to helping members meet the future with more knowledge and opportunity as their organizations work to improve health status and quality of life in their communities

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Futurescan Contributing Authors• Donald W. Seymour, Executive Editor• Paul J. Feldstein, The Economy: For Hospitals, an Uncertain Outlook• Stuart H. Altman, Christopher P. Tompkins, Stanley Wallack and Michael

Doonan, Payment: New Approaches for Paying Providers Will Change the Organization of Healthcare Services

• Stephen M. Shortell, Delivery System Reform: Accountable Care Organizations and Patient-Centered Medical Homes

• William F. Jessee, Physicians: Transitioning from Alignment to Integration• Eric J. Topol, Genomic Medicine: Opening the Door to Individualized Care• Jeff Goldsmith, Healthcare IT’s Unfulfilled Promise: What We’ve Got Here is

Failure to Communicate• Lynn Unruh, Nursing: Toward a Sustainable Nursing Workforce• Bob Eisenman, The Environment: The Greening of Healthcare and Hospitals

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“Even small healthcare institutions are complex, barely manageable places. . . Large healthcare institutions may be the most complex organizations in human history.”

Peter Drucker

Post-Capitalist Society. New York, Harper and Row, 1993

Futurescan in Context

• These trends can transform the future

• Healthcare reform legislation introduces uncertainty and opportunity

• Individual organizations must determine relevance, timing and context

(c) 2010 – Society for Healthcare Strategy and Market Development (SHSMD) of the American Hospital Association

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Using Futurescan

• Assess local trends, review assumptions, project implications

• Distinguish operational from strategic implications

• Determine key strategic Issues

• Consider timing

• Exercise common sense and discipline

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(c) 2010 – SHSMD

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The Economy: For Hospitals, an Uncertain Outlook

The Economy: Skyrocketing Costs

Even with reform, healthcare costs will continue to outpace inflation, threatening hospital margins.• Adopt strategic initiatives such as LEAN that are

designed to reduce costs and improve efficiency.• Incentivize employees at all levels to identify cost-

saving measures and strategies.• Intensify fundraising efforts.

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(c) 2010 – SHSMD

The Economy: Medicare Challenges

Deficits in the Medicare Hospital Insurance Trust Fund will intensify as the Baby Boomers begin to qualify for Medicare.

• Look for new ways to cut costs and reduce unnecessary care.• Migrate care to less costly outpatient settings.• Advocate for reasonable and fair Medicare reimbursement rates.

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(c) 2010 – SHSMD

The Economy: Fewer Private Pay Patients With or without reform, the number of privately insured

patients will decline.• Aggressively market to private pay patients in your service area.• Develop and promote centers of excellence that meet community needs.• Be an active political advocate for fair and reasonable updates for

Medicare and Medicaid coverage.

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(c) 2010 – SHSMD

The Economy: More Bad Debt

Bad debt will increase as private insurers increase co-pays and deductibles in order to soften premium increases.• Negotiate contracts with insurers carefully, as they will

be attempting to aggressively cut costs.• Anticipate increased pressures for price and cost

transparency.

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(c) 2010 – SHSMD

The Economy: Physician Competition Physicians will continue to shift lucrative

services to outpatient settings or facilities in which they have an ownership stake.• Look for ways to engage physicians with your

organization and build their loyalty.• Develop strategies that financially integrate physician

and hospital services.• When appropriate, joint venture with local physicians

to develop specialized services.

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The Economy: The Outpatient Shift Outpatient services will continue to grow

more rapidly than inpatient or other hospital services. • Invest in outpatient treatment and diagnostic services,

creating joint ventures with physicians when appropriate.

• Design new or renovated space to accommodate a greater outpatient use.

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Payment:New Approaches for

Paying Providers

Payment: Performance and Quality

Payment based on quality and efficiency will be routine, and quality “bonuses” will be drawn from annual payment updates.• Promote a culture that focuses on quality

improvement and patient safety.• Make sure that information systems can produce valid

and reliable quality and outcome indicators.• Work with physician leadership to promote the use of

evidence-based guidelines throughout the organization.

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(c) 2010 – SHSMD

Payment: Global Payment

CMS will expand the number of demonstration projects that bundle payments for physicians and hospitals.• Dialogue with physicians about the benefits of

coordinating patient care under this system.• Work with physician leadership to develop methods of

sharing reimbursement for all types of patients.• Be prepared to assume the majority of the financial

risk until global payment mechanisms become routine.

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Payment: Renewed Importance for Primary Care

New payment and delivery models will be based on a constellation of care that will be coordinated by primary care physicians.• Develop relationships with primary care physicians

and groups.• Be an advocate for payment reform that provides

greater incentives for primary care physicians.

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Payment: The End of Fee for Service? Reimbursement will increasingly rely on

payment mechanisms that promote coordinated, cost-effective care and less on FFS payments.• Strengthen relationships with physicians and develop

partnerships for providing key services.• Educate the medical staff on the implications of the

new reimbursement systems.• Design information systems that are flexible and can

adequately capture cost and quality information.

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Delivery System Reform:

Accountable Care Organizations and

Medical Homes

Reform:EHRs Are Not an Option EHRs will become a necessary

component for a delivery system that can provide coordinated, cost-effective care.• Have a strategy for EHR implementation, expansion

or update.• Make sure your organization receives its share of

stimulus funds for EHR adoption and implementation.• Select or adopt an EHR that is interoperable with

physician practices and other components of the delivery system.

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Reform: More Sophisticated Measures With advances in performance

measurement, organizations will need to be transparent and accountable.• Invest in data systems that provide valid and reliable

measures of performance.• Use performance data to foster quality improvement

efforts.• In the interest of transparency, share select

information with key stakeholders and the general public.

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Reform: Medical Homes Federal funding will promote the development

of patient-centered medical homes as a reform strategy. • Establish partnerships with primary care physicians who are key

to medical homes.• Use the Physician Practice Connections-Patient-Centered

Medical Home standards promoted by the National Center for Quality Assurance to guide the development of medical homes.

• Emphasize interdisciplinary teamwork throughout the organization, providing team training if appropriate.

• Incorporate disease management and prevention efforts into community outreach activities.

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Reform: Accountable Care Organizations Accountable Care Organizations (ACOs)

will develop in response to real and anticipated reimbursement changes.

• Strengthen relationships with physicians.• Modify or invest in information systems that will

accurately measure performance and predict future costs.

• Work with physician leaders to promote evidence-based practices and reduce overuse.

• Focus on measurements that relate to the organization’s strategic priorities.

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Reform: Effectiveness Research Care standards based on comparative

effectiveness research will be promoted as the “gold standard.”• Continuously monitor clinical and health services

research literature for new trends and findings.• Monitor the political environment for proposed

changes in reimbursement based on research findings.

• Share new standards with medical staff and members of the governing board.

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Physicians: Transitioning From

Alignment to Integration

Physicians: New Lifestyle Expectations A younger physician work force,

comprised of significantly more women, will demand flexible scheduling for more personal time.• Create more full-time employment opportunities, with

regular hours, for physicians.• Create flexible opportunities for physicians who do not

want full-time employment due to family responsibilities.

• When recruiting physicians, emphasize social as well as professional opportunities.

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Physicians: The End of Solo Practice? Physicians are leaving solo and two-

person practices to join groups or seek full-time salaried positions.• Establish medical leadership positions that will

promote efficiency and quality.• Offer management services that will benefit small

practices and develop loyalty to the institution.• Develop programs and services targeting new and

growing physician groups and IPAs.

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Physicians: Shifting Practice Patterns Increasing numbers of physicians will limit

their scope of practice so they will be either hospital-based or office-based. • Segment integration strategies to account for the

differences between these two groups.• Offer billing, collection and other Management

Service Organization services to office-based physicians.

• Develop leadership roles for hospital-based physicians.

• Develop joint ventures with entrepreneurial specialists.

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Physicians: Primary Care Shortages At a time when reform initiatives

emphasize the role of primary care, most communities will experience serious shortages of primary care physicians.• Develop alignments with primary care practices.• Create leadership roles for primary care physicians.• Intensify efforts to recruit primary care physicians.• Advocate for higher federal and state reimbursements

for primary care.

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Physicians: Partners in Risk Economic and demographic trends, spiraling

costs, and expected changes in payment structure will create pressures for increased hospital-physician integration. Physicians and hospitals will share risk.• Modify information systems that allow physicians

access to patient information remotely, 24/7.• Create reward structures for physicians who have

good patient outcomes and minimize costs.• Work with medical leadership to promote evidence-

based practices within the institution.

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Genomic Medicine: Opening the Door to

Individualized Healthcare

Genomics: A Gold Rush of Discovery Genetic markers of common diseases are

being discovered at a pace never seen before in biomedical research.• Strategic planning processes should focus on the

impacts of these new discoveries.• Help staff and board members stay up-to-date on

fast-breaking genetic discoveries.• Consider adding service lines related to genetic

testing and counseling.

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Genomics: Drug Effectiveness Genetic sequencing will determine

whether an individual will be helped by drug therapies previously considered “standard.”• Assign staff to monitor current trends in

pharmacogenetic interactions.• Update the laboratory so it can perform rapid genetic

testing prior to the administration of selected drugs.• Alternatively, develop a relationship with a reputable

central lab for quick test turnaround.

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Genomics: Prediction and Prevention Genomic screening will make medicine more

predictive and preventive, and it will be possible to diagnose and treat illness in younger people.• Anticipate further shifts from inpatient to outpatient care.• Develop expertise in genetic counseling that incorporates

advice on the environmental risks associated with common diseases.

• Be prepared to respond to the ethical issues surrounding genetic screening.

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Genomics: New Competitors Private companies are marketing directly

to consumers and offering relatively low-cost genetic screening for a variety of diseases. Consumers are willing to pay out of pocket.• Be prepared to deal with patients who present with a

“genetic profile.”• Consider offering hospital-based genetic testing

programs as a part of an overall preventive/wellness strategy.

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Genomics: Individualized Healthcare If the unprecedented rate of discovery in

genomic medicine continues, diagnostic and treatment procedures tailored to individual patients are on the horizon.• Consider developing a service line based on genomic

medicine.• Prepare for an accelerated shift to outpatient

diagnosis and treatment.• Be prepared to educate the public on the benefits and

limitations of genomic medicine.

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Healthcare IT’s Unfulfilled Promise

Healthcare IT: Unfulfilled Promises To date, information systems in healthcare

have not fulfilled their promise. Instead, they have added cost and provider burden.

• Provide better education for staff.• Make more demands on vendors and outline clear

expectations for ease of use. • Pursue systems and updates that transcend silos

between departments and processes and promote interoperability.

• Develop a fully automated revenue cycle for significant cost savings.

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Healthcare IT: Horizontal Communication Instant messaging, texting and online

discussion groups are preferred methods of problem solving and communication for younger physicians and managers.• Build instant messaging and online communities into

the IT infrastructure.• Make sure the interface is “Facebook friendly.”• Provide wireless Internet access throughout the

organization.

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Healthcare IT: Move it Online Online sites will play a key role in helping

people monitor their health and in providing health education.• Maintain a Web site that is engaging and easy to

navigate.• Develop a strategy for the use of social media in

promoting your organization.• Provide links to reputable and reliable health

information sites.• Use the Web portal to provide online interventions in

nutritional planning, smoking cessation and support for other chronic conditions.

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Healthcare IT: New Communication Lines Future patients will expect to communicate

with their physicians and health providers online and in real time.• Shift appointment reminders and pre-admission

processes to the organization’s Web site. • Create instant-message systems for patient updates.• Provide wireless Internet access throughout the

organization.

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Healthcare IT: PHR Evolution Future Personal Health Records will be

truly personal. They will be worn or become part of an individual.

• Keep abreast of the latest technology trends.• Build trust with patients that their health information

is confidential and secure.• Take advantage of federal dollars in the stimulus

package to upgrade or install EHRs.• Keep information systems up-to-date.

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Nursing: Toward a Sustainable Nursing Work Force

Nursing: Complacency Is Dangerous The nursing shortage is on hold, but once

recovery from the current recession is complete, it will return with a vengeance.• Partner with local nursing schools to provide clinical

placements for students and employment opportunities for graduates.

• Avoid cutbacks in the nursing staff whenever possible.• Initiate strategies to retain the current nursing staff that

focus on streamlining the work environment and reassigning non-value-added activities.

• Support legislation that expands nursing education.

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Nursing: An Aging Work Force

Despite younger nurses entering the work force, the proportion of older RNs in the work force will increase for several more years.• Improve the ergonomic design of the physical

workplace.• Use LEAN concepts to reduce unnecessary and

redundant steps on nursing units.• Accommodate flexible and part-time schedules for

experienced nurses.

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Nursing: An International Work Force The need for foreign-born nurses to

complement the native-born work force will increase, despite some concerns about communication issues.• Support research that investigates the relationship

between communication skills and patient safety.• When appropriate, provide training in communication

skills for foreign-born nurses.• Provide cultural competency training for foreign-born

nurses and the staff who work with them.

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Nursing: Fertile Ground for Labor Unions The newly-formed National Nurses Union

will intensify efforts to unionize nurses nationwide.• Educate leaders on the various tactics and strategies

employed by unions in healthcare facilities.• Engage nursing leadership in activities designed to

improve the satisfaction of the nursing staff.• Take the high ground if dealing with unions. Answer

questions directly and honestly.

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Nursing: Mandated Staffing Ratios More states will consider legislating

mandatory nurse staffing ratios.• Be prepared to articulate and justify current staffing

processes. Involve nursing leadership.• Restructure the care processes so nursing performs

fewer non-value-added activities.• In the interest of patient safety, set limits on

mandatory overtime for nurses.

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The Environment: The Greening of Healthcare

and Hospitals

Environment: Going Green Hospitals will be actively involved in

“green” initiatives in an attempt to reduce their environmental impact and carbon footprint. • Limit vendors to those with environmental programs.• Participate in organizations that promote sustainability

and safety.• Monitor legislative activity to determine if federal

funds become available for energy improvements.

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Environment: Health and Safety Hazards Hospitals will be required to disclose, to

the general public as well as employees and patients, any incidents that adversely impact the environment or impose health or safety hazards.• Give full support to safety officers and others

responsible for environmental health and safety.• Audit your organization periodically to identify and

reduce risks.• Make the health and safety of patients, staff and the

community served a strategic priority.

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Environment: Recycle Equipment

Hospitals will be expected to recycle medical equipment that is no longer used by giving it to needy countries.

• Develop partnerships with hospitals in less developed countries that will accept the equipment.

• Include equipment donations in community benefit reports and in other reports to the community.

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Environment: Construction Issues Construction or renovation projects will

use design principles that promote safety and reduce stress.• Select architects and design teams that understand

the impact of physical design on human behavior and patient safety.

• Work towards LEED accreditation for all or part of the organization.

• Establish building standards that emphasize safety and sustainability.

• Create a culture of safety within the organization.

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“‘We will do everything for everybody’ has never been a viable value proposition for any successful business model that we know of—and yet that’s the value proposition … of general hospitals.”

Clayton M. Christensen, Jerome H. Grossman, MD, and Jason Hwang, MD

The Innovator’s Prescription: A Disruptive Solution for Health Care (2009)

FuturescanThis presentation was adapted by Mary Stefl, PhD, Chair, Health Care Administration, Trinity University, from Futurescan: Healthcare Trends and Implications 2010-2015.

Futurescan 2010 is available for purchase from Health Administration Press. Single copies (order code 2155) are $45. Packages of 15 copies (order code 2155BND) are available for a discounted price of $395. Order online at ache.org/HAP or call the ACHE/HAP Order Fulfillment Center at (301) 362-6905.

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Healthcare Trends and Implications2010–2015

Futurescan