The healthcare policy turmoil that has defined 2017 is enough to give anyone whiplash, political affiliation and occupation aside. Since President Donald Trump took office in January 2017, the healthcare industry has observed the coming — and in many cases, going — of proposals such as the American Health Care Act, the Better Care Reconciliation Act, the straight repeal, the skinny repeal and the individual mandate repeal, to name a few.
Yet aside from a handful of regulatory changes, such as the rollback of some bundled payment initiatives, federal healthcare policy has not actually changed in the past year. The ACA is still in place; Medicaid expansion lives.
"In a micro view, from Washington and cable stations every day, you would think healthcare was a mess. It's unpredictable, but I actually don't think it's changed all that much," said Howard Dean, MD, former governor of Vermont and former chair of the Democratic National Committee, during a Nov. 14 panel discussion at the Becker's 6th Annual CEO+CFO Roundtable in Chicago.
For now, it is business as usual — and business as usual is still undergoing change, driven by forces outside of politics. Therefore, hospital and health system leaders should stay focused on their strategic mission, while monitoring politics on the periphery.
"My job is looking at strategy and making sure that we execute effectively on the strategic plan of the organization — but we can't be absent of dealing with both state and federal issues," said Maureen Kahn, RN, MSN, president and CEO of Blessing Health System in Quincy, Ill.
The private sector is leading the way in healthcare reform
While federal legislators tread water on healthcare policy, the private sector is chipping away at healthcare transformation.
"The private sector has a remarkable opportunity … to change the healthcare system without much government influence," Dr. Dean said. He believes private sector thinking will continue to carry the industry shift away from fee-for-service medicine and toward value-based care. As hospitals fight cost pressures and vie for consumer-oriented patients, Dr. Dean believes they will naturally move to vertically integrated delivery systems that couple insurance and care, aligning financial interests.
"Once you have a healthcare delivery system accompanied by reserves, by actuarial expertise and by reinsurance, you don't really need to pass through the insurance company," he said. "If you tie [reimbursement, medical procedures and pharmaceutical costs] all up in one big package, then you have a series of organizations that have the full picture of where the money goes and what's the biggest bang for the buck." Early signs of progress exist in larger hospitals and health systems' formation of nontraditional partnerships with organizations like home health providers, payers or housing facilities in the name of vertical integration.
Blessing Health System is working directly with the private sector to reduce costly hospitalizations in their community. The health system currently has 13 projects underway with local employers, in which the companies pay a per member per month rate to ensure employees have immediate access to care at local clinics, according to Ms. Kahn.
However, the degree and speed of change at Blessing is slowed by the lack of health insurance among many of its rural patients, who do not receive employer-sponsored coverage and cannot afford to buy individual insurance. Coupled with larger state budget and reimbursement issues, Blessing's ability to advance in healthcare reform is stunted to some degree by local politics. "I know everybody thought everybody got insurance [under the ACA]," she said. "They didn't in my community."
Ms. Kahn regularly works with state representatives to ensure they understand how their legislative policies will affect healthcare delivery for rural populations. Blessing Health System has also changed its approach to care delivery by operating school-based clinics, sending dental vans into the community and offering free or reduced-cost care.
"Three-hundred dollars a month to [people in my community] is not making a house payment, not paying bills or not feeding their family," she said. "We've tried to put some things together to keep that community well and healthy and not fill our beds. That's no longer a sign of success for my organization and my board."
Strategy on a budget
Maintaining the pace of change without policy updates may seem unrealistic to hospitals strapped for cash. Yet even with little financial leeway, hospitals can support the goals of healthcare transformation by looking for financial and operational redundancies and waste, according to Ramona Lacy, managing partner and co-founder of Prism Healthcare Partners, a Chicago-based healthcare consulting agency.
"At a high level, if your organization hasn't done a broad performance improvement effort and done multiple rounds of labor cost reduction, supply chain cost reduction, revenue cycle improvement … that could be an opportunity," she said. Streamlining labor costs, supply chain, clinical service lines and back-office operations is a particularly ripe opportunity to squeeze out costs if a health system has recently merged, grown organically or acquired hospitals or practices, she added.
For systems that have already tackled high-level efficiency initiatives, Ms. Lacy named the following more granular areas to address.
- Strengthening relationships with physician practices
- Improving clinical documentation to capture more revenue
- Streamlining pharmacy use
- Reducing IT applications to the essentials
"There is plenty to change, no matter what happens to policy," Ms. Lacy said. Taking small actions to boost clinical and operational efficiencies can not only help hospitals and health systems more easily navigate the current healthcare environment, but also make them more nimble when policy changes do come down the pipeline.
For example, Blessing Health System was able to eliminate $37 million worth of waste over the past 18 months using efficiency strategies like those discussed by Ms. Lacy, without resorting to layoffs, according to Ms. Kahn. "We have to take waste out of our system and decrease cost because the day will come when reimbursement changes significantly," Ms. Kahn said.
Maintain focus without going deaf
In the current political environment, healthcare leaders must cut through the deluge of policy proposals and look for the big picture: nonpolitical forces driving change and waste within their own systems. These trends offer a more tangible, reliable and workable way to inform long- and short-term strategy, and while policy and advocacy cannot be ignored, working with what's happening on the ground can be infinitely more powerful than policy.
"Our jobs can become so chaotic if we respond to every ball that gets thrown in the arena," Ms. Kahn said. "You need to be able to really say, 'What are the important issues we can focus on?' while making sure we don't go deaf, but are ready for the change, whether it's looking internally or preparing for shrinking margins."
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