No one can predict the future of health care under a new administration. Nor can they predict precisely if and when the American Health Care Act (AHCA), the Affordable Care Act’s (ACA) successor, will become the new law of the land or whether that will be the end of the road, as additional legislation may still be introduced. We don’t know how stakeholders—including consumers—will be affected, or how far the regulatory changes will reach. In times like this, it’s tempting to sit back and wait until the direction is clear.
But that could be a mistake. The industry should not become paralyzed in the face of uncertainty. Now is the time to focus on the things that are and will continue to be critically important. It’s the time to focus on what I like to call the four “Cs” of health care: cost, customers, clinical quality, and consolidation. Regardless of what comes down from Washington, these fundamental elements will continue to be central and perhaps even more important to health care effectiveness and efficiency at the local, regional, and national levels.
Cost. The cost of care remains a pressing concern for providers. Questions persist about reimbursements, payment structures, and investment demands. Costs can’t just be tweaked around the edges; health care organizations need creative, meaningful solutions. Fortunately, there’s no need to start from scratch; leading providers are looking to other industries for proven ideas.
Effective cost containment tools and processes are available now. Think enabling the supply chain with digital, digitizing the finance function, and employing robotic process automation where it makes sense. Solutions such as these can help rein in an organization’s fixed-costs and support scalability. Providers need to be more aggressive about deploying them in the health care space.
Customers. It’s likely a growing share of medical care and coverage costs will be borne by the individual, a trend that started under the ACA. A recent study by the Health Care Cost Institute (HCCI) showed that individuals’ 2015 annual out-of-pocket costs increased to an average of $813, a 3-percent increase. The HCCI also found that 53 percent of customer health spending can now be comparison shopped.
As people grow more price sensitive and knowledgeable, they are likely to seek out more affordable medical options and those options which meet a broader set of needs including service expectations, access, and convenience. Meeting these demands will require providers to be more nimble and attentive to customers’ growing demands and changing needs to stay competitive.
Health care providers can learn a lot by studying customer-centric industry sectors, such as retail, financial services, and travel/hospitality. These types of businesses remain relevant to consumers by gathering insights on customer behaviors and perceptions and using them forge productive relationships. These industries have engaged with customers in ways health care sectors historically have not; their lessons can be instructive.
Clinical quality. The opportunity to improve outcomes, reduce variations in care, and establish better reimbursement models is central to the push for quality-based standards and practices. Providers should scrutinize their clinical quality and care models and introduce ways to reduce duplicative procedures, hospital readmissions, and mortality and morbidity rates. Organizations should look to drive continuous performance improvement in this area by building the foundational infrastructure necessary to drive quality performance across the enterprise holistically versus too intense of a focus on specific metrics.
Consolidation. Consolidation, while more speculative, could be one answer to addressing cost, customers, and clinical quality issues. Partnerships are forming in ways we couldn’t have fully imagined a decade ago, whether provider/provider, providers developing formal agreements with health plans, retailers, or more unique collaborations with outside players. Stakeholders in the provider space should actively pursue arrangements, perhaps even unorthodox ones that advance their interests.
Challenging, complicated work lies ahead. Winning health care organizations will not wait; they will continue driving toward higher-quality, lower-cost patient care while the Trump administration and Congress discuss a replacement for the ACA.