Many of our nation’s largest health systems He suffered A staggering financial loss last year and Attitude Especially non-profit hospitals, which have advantages Beautifully Equally worrying is their tax-exempt status. Hundreds of rural hospitals have closed their doors in recent years, and 30% of the remaining at risk Closing. All of this to say, the healthcare industry is clearly under economic stress and fear. It continues. Struggle In a post-Covid-19 world with low reimbursement pressures and other fiscal and operational challenges, leaders of these organizations must recognize that being stuck with an outdated and broken fee-for-service (FFS) model is not their way out.
I have written extensively about the fundamental problem with FFS, both in this column and in our books. In essence, the provider is—rather than patient—centered, and there is less ongoing accountability for patient outcomes. Our number and associates 2022 State of the Public Health Survey Report It also revealed two painful lessons learned when Covid tested its vulnerability and exposed the system to its failure.
The first lesson was that ignoring the Social Determinants of Health (SDOH) left millions of Americans who were most vulnerable to the ravages of the virus in serious health conditions, and we all paid a heavy price for that decision. Second, when hospitals cut off their revenue from the cancellation of elective procedures, they suddenly realized that FFS was a very risky proposition. But even before the arrival of Covid, other market places were experiencing volatile changes, which should have been an early warning that FFS was not sustainable.
Our latest book, Bringing value to health care. Hospitals face a payer mix as government share increases and payment rates decrease. And, as hospitals turn to private payers to make up for lost revenue, these payers, unable to steer the cost curve as freely as they do, are facing strong opposition from the Centers for Medicare and Medicaid Services (CMS). Now more than ever. Additionally, in an effort to contain their own costs, more and more employers are moving to high-deductible group plans, which means consumers are paying a greater share of plan premiums.
Together, these forces reflect how the days of financial management are numbered in the FFS model. To move toward a new market-based model, providers must fundamentally rethink their value proposition from the perspective of consumers, payers, and other stakeholders in a way that sustains cost and quality.
This means making an economic clinical value argument in the way they work. What does this procedure really cost? What results should I expect? And, if your total medical costs are more expensive than the competition, why should I come to you for care? These are some of the questions that are being asked now, but unfortunately, they are still unanswered. The silence proves that while healthcare is big business, it doesn’t work like other consumer-facing industries, innovation creates demand, which in turn determines price and choice.
To illustrate the point, I recently had a conversation with an executive at one of the largest and most prestigious nonprofit academic medical centers in the country—a man who understood the urgent need for his organization to get to a new outcomes-based model. In my discussion, it has been revealed that he has not yet been able to get the leadership to participate in this crucial effort.
The hospital where he works has struggled for years without success to make the economic and clinical value argument across most lines of business. With the exception of many high-risk and complex procedures—bone marrow transplants, for example—there is no evidence-based clinical outcome for more routine procedures. For this reason, these procedures are sometimes more expensive than other hospitals, and often, patient outcomes are much better. Incredibly, many health systems are still struggling to manage processes that lead to poor outcomes, and it’s happening at some of the best, internationally recognized, and highly funded academic medical centers. And these health systems have been opposed in every possible way. This started when CMS was implemented. Improvement 40 years ago to control healthcare costs while improving quality and patient safety. More recently, CMS has added accountability and price transparency to the mix.
We took this a step further and interviewed a physician CEO at another company Bringing value to health care “Most Americans…don’t understand that one-third of what we do to them is unsupported and often harmful!” But if we “flip the switch” and every doctor starts practicing evidence-based medicine tomorrow, he warns, there will be a revolution. Indeed, what we need now is a revolution. However, according to our latest public health report It explainsold fears make the journey into public health management incredibly tumultuous.
Organizations serious about managing quality and cost disparities must develop strategies to engage management leaders at the physician level, as physician decision-making is the most important driver of health care costs and critical to better outcomes. Our data shows that the number of healthcare executives who say their organizations are improving their ability to manage clinical quality variation at the physician level has increased by 15 percent since 2016, an upward trend that is not continuing across the board. For example, managing clinical cost variation at the physician level is another story: 62% rated their organization’s capabilities as “average” or “worse than average.” This shows how organizations still fail to keep up with public health needs.
Furthermore, when it comes to using other methods to support physicians’ accountability for cost and quality, our data shows that adoption has been less than stellar. This includes creating care pathways for high-cost procedures, using standardized procedures to identify cost and/or quality differences at the physician level for one or more procedures, and paying physicians based on their ability to manage cost and/or quality differences. with others. Until these loopholes are closed, fear of financial loss and the struggle to contain clinical costs will continue to hamper senior management.
Our surveys consistently show that an overwhelming majority (81%) of healthcare executives believe population health is “critical” or “very” important to future success. If that’s true, they should simply leave the group saying “break even” or “we didn’t lose much money last year.” Industry stakeholders also say they want “better health outcomes at lower costs.” If that hype is true, then it’s time to show the data—and more importantly, the relevant results. Until that happens, the retail industry’s disruptors will continue. Remove the chip In a class that continues to be given more ground per day.
Population health—broadly defined as providing the appropriate intervention for each patient at the lowest possible cost along the continuum of care—is an important component of fixing our failing FFS system. But like a sand crab trying to cross the beach to reach the ocean, instead of going toward the ocean, they are going sideways. And when the aimless drag continues, our chronic disease Infectious disease It gets worse, more and more frustrated primary care physicians and other doctors become. walking Out the door, and become patient-consumers left They sit in the emergency room helpless, confused and racking up medical bills.
Breaking old habits and embracing a new way of thinking and doing business is hard, and there is no one-size-fits-all solution. But given the dire state of US health care delivery today, the time for intervention is now.