National Healthcare Reform & Political Influences
When the new Presidential administration takes office in 2017, the entire healthcare industry is likely to be in a state of transition once again. The Patient Protection and Affordable Care Act of 2010 (HHS, Healthcare, PPACA, 2010) is likely to be modified, if not repealed.
Whichever occurs, the nation will have a front row seat to national healthcare reform in the making once again. The goal of course is to actually make healthcare affordable and accessible for everyone, so we will likely not see small incremental changes, but rather major sweeping changes intended to tackle the 800 pound gorilla in the room known as rising healthcare costs.
Not only will this be the prevailing future trend of healthcare in 2017, but it will likely be the healthcare trend for the next decade. Healthcare managers need to embrace this phenomenon and make it work for their organizations, which ultimately will help their patients.
- Recruiting Expands - New Senior Healthcare Managers
As baby-boomers continue to retire in droves, there are many different types of healthcare providers that fall into this demographic, expect to see more healthcare manager positions opening up as those retirements require some succession planning. The American College of Healthcare Executives (ACHE) White Paper on “What Healthcare Leaders Should Know About Recruiting Senior Executives: Lessons from Executive Search Firms”, says that an increased demand for physician leadership is the number one recruiting problem for executive search firms (ACHE, White Paper, 2016).
- More Cultural Diversity Evident
According to a report by the ACHE (ACHE, White Paper, 2015), healthcare leaders need to take a look at diversity in their organizations. This pertains to leadership at all levels within the organization. Actively recruiting a more diverse culture into healthcare management positions will enhance the organizations ability to more effectively support and communicate their demographic service area.
- Increased Emphasis on Population Health
Population health management is being aware of the determinants of health, and how those determinants evolve into chronic health conditions. Chronic diseases are responsible for 7 of 10 deaths each year, and treating people with chronic diseases accounts for 86% of our nation’s health care costs (CDC, 2016). As such, managing your populations health gives the healthcare manager insight into what costs are around the bend, and how to best prepare for it. Of course, all of this is related to identifying and controlling costs just like any other healthcare initiative, but the concept of placing more emphasis on population health continues to come to the forefront as an important red flag that bears keeping an eye on.
- Continuance of Mergers and Acquisitions
Another healthcare trend to watch is Healthcare organizations will continue to try to capitalize on economies of scale by merging and acquiring into one organization. As an example of a merger and/or resulting acquisition can be an Integrated Healthcare System and/or also sometimes referred to as an Accountable Healthcare Organization (ACO). By definition, an ACO is a group of doctors, hospitals, or other healthcare providers who join together as one, to deliver coordinated high quality healthcare at an affordable price (CMS, 2016).
- Transitioning to Value Based Health Care
Regardless of the many drivers of healthcare related costs, and there are many opinions as to what those might be, one thing is for certain. Fee-for-service reimbursement is on its way out and reimbursement for providing healthcare that is value based will be the major deciding criteria as decided upon by the Centers for Medicare and Medicaid Services (CMS), (CMS, 2016). If we are to survive as a nation, this next iteration of healthcare reform should start the discussion with one salient point that seems to always be missing in the rising costs equation. That point is “what does health care really cost”? When and until we can come to an agreement as to a standardized price point for every product, good, and service provided to our patients, we will not succeed in getting costs under control. There is no reason that a drug or procedure should be one price in one part of the country, and be a completely different price elsewhere. Even with the proper use of coding with DRG’s and other well intentioned methodologies, we have not yet been able to get a solid grasp on costs. They continue to rise, because they can, and we let them. Even value based reimbursement will not be successful without leveling the playing field. Every healthcare related product line, good, and service must cost the same nationwide, otherwise we will continue down the same path of failure, despite our best efforts.
- New Healthcare Business Models
The U.S. healthcare system is becoming more consumer oriented, thus the need to achieve better quality outcomes for our patients. Patients are demanding improvement, willing to challenge the system when they don’t get it, and vote with their feet when they become dissatisfied. Thus, healthcare managers need to examine their organizational business model, assessing its ability to respond to this new environment, while enabling themselves to still realize a positive return on their investment (PWC, HRI, 2016).
- Retail Medicine Will Continue to Flourish
With the advent and success of retail medicine such as Doc in the Box clinics on every street corner, urgent care clinics, and outpatient surgery centers, healthcare managers must recognize that to stay in business and make a profit, one must expand their horizons. Convenience is the driver in these instances, but that convenience has added more cost due to over utilization of such services. Using these models with revised costs controls might be the answer. To be more financially viable, healthcare managers will have to consider using more of a team approach to patient care, using nurse practitioners and physician assistants as their primary care providers. According to a survey conducted by Price, Waterhouse, and Cooper in 2014, 26% of American adults said they had contacted different doctors and health systems about prices. By 2015, that number had climbed to 30%. Almost 40% said they had asked ahead of time for the price of a prescription or procedure (PWC, HRI, 2016).
- Cost of Prescription Drugs will Continue to Rise
A battle still looms on the horizon regarding the cost of prescription drugs. We are just starting to see the battle lines being drawn as to what these drugs should cost versus what we are being charged. The belief that someone has to pay for the research and development of new drugs, no longer seems to hold any water, as healthcare constituencies become savvier and less willing to pay the price that pharmaceutical companies demand. The national healthcare reform debate that will be taking place in 2017 will surely include this as an important part of that discussion (PWC, HRI, 2016).
- More Healthcare Mobile Devices
A healthcare trend that can be expected is that more mobile devices will be seen in use throughout our healthcare system as many patients embrace the convenience and proliferation of many more mobile phone applications used for tracking appointments or sending/receiving information, and wearable devices that help one monitor vital signs, fitness stats, and even calorie counting, to mention a few. You will likely see more providers carrying electronic note pads as they move about. Hopefully, we will see paper begin to disappear from the healthcare landscape, as healthcare organizations large and small begin to invest in health informatics for every use (PWC, HRI, 2016).
Summary of Healthcare Trends and Predictions
One really does need a crystal ball to accurately portray what the future holds for the U.S. Healthcare System. However, looking back into the past provides us with many opportunities to recognize our shortfalls and correct our course. Whether you are new to healthcare management or are a seasoned veteran, one thing is for sure- there are exciting times ahead for the industry. Join us for the ride and your healthcare management master’s degree from American University will serve you well!
American College of Healthcare Executives (ACHE) (2016). What Healthcare Leaders Should Know About Recruiting Senior Executives: Lesson from Executive Search Firms, retrieved from https://www.ache.org/pubs/research/pdf/Executive_Search_Firm_White_Paper_2016.pdf
American College of Healthcare Executives (ACHE) (2015). Why Healthcare Leaders Need to Take a New Look at Diversity in Their Organizations, retrieved from https://www.ache.org/pubs/research/pdf/CEO-White-Paper-2015.pdf
Centers for Disease Control and Prevention (CDC), Division of Population Health Website (2016), retrieved at http://www.cdc.gov/nccdphp/dph/
Price, Waterhouse, Cooper, Health Research Institute (2016). Behind the Numbers: Medical Cost Trend Website, retrieved at http://www.pwc.com/us/en/health-industries/health-research-institute/behind-the-numbers.html
Price Waterhouse Cooper, Health Research Institute (2016). Top Health Industry Issues of 2016. http://www.pwc.com/us/en/health-industries/top-health-industry-issues.html
U.S. Department of Health & Human Services (HHS), Centers for Medicare & Medicaid Services (CMS), Accountable Care Organization (ACO) Website, retrieved from https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ACO/index.html?redirect=/aco/
About Jack Nemecek, Ph.D.
Dr. Jack Nemecek, Ph.D. is a full time university Professor who has completed two careers, one in healthcare administration and one in public health. Dr. Nemecek began his career in military medicine as an Independent Duty Hospital Corpsman in the United States Navy. After 12 years as an Enlisted man, he was Commissioned an Ensign in the U.S. Navy Medical Service Corps, as a healthcare administrator. He served on active duty for 22 years, serving in numerous capacities as a senior level healthcare administrator, to include Director of Human Resources, Director of Education/Training, Director of Operations, Director of Administration, and Director of U. S. Navy Healthcare Construction West Coast Operations. Upon his retirement from the U. S. Navy, Dr. Nemecek began another career as a Public Health Advisor with the Centers for Disease Control and Prevention. For another 20 years, he served in numerous capacities including grants management and as Deputy Branch Manager for the Education, Information, and Partnership Branch of the National Immunization Program. He holds a Ph.D. in Public Health from Walden University, an MBA and BBA in healthcare administration from National University, and an AS in Allied Health from George Washington University.
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