The big are getting bigger in 2018 — here's how small and mid-sized hospitals can compete

2018 is shaping up to be a transformational year for hospital systems. The recent tax reform bill includes a potential $25 million spending cut to Medicare while raising premiums for patients. Along with major legislation, mergers between healthcare giants continue to be penned.

This double-whammy of decreased reimbursement to providers and increased competition for patient dollars will only exacerbate margin pressures most health systems are already facing. In a Feb. 20 webinar sponsored by LogicStream Health and presented by Becker's Hospital Review, Don Wegmiller, chairman and CEO of C-Suite Resources, and Brita Hansen, MD, CMO of LogicStream Health, discussed upcoming trends in 2018 and how hospitals and health systems can streamline clinical processes to meet market challenges.

Consolidation will continue escalating
"The first key issue in addition to the tax reform bill is the implications of consolidation," said Mr. Wegmiller. "Yes, we are all aware hospitals have consolidated into systems for quite a while, but now the systems are beginning to consolidate and transforming into mega-systems.".

A recent study by Deloitte suggested rapid consolidation could cause independent hospitals to drastically decrease in number, if not become extinct. Currently, the organization suggests the U.S. has 80 large health systems — systems with 10-plus hospitals in multiple regions — and 273 mid-tier health systems, meaning systems with two to nine hospitals in the same local region. However, Deloitte, anticipates consolidation to ramp up in coming years, potentially resulting in 1,346 small community health systems merging into a total of roughly 926 multihospital health systems.

It's not only health systems and hospitals that are merging. Insurers and healthcare providers are also consolidating. Most recently, CVS signed a deal to purchase Aetna, the U.S.'s third-largest health insurer. The $69 billion acquisition is setting the stage for other healthcare providers to expand vertically instead of horizontally. "We can conclude the increasing scale of systems, from both sides — provider and insurer — is being done to gain market power, which then challenges independent and community hospitals," said Mr. Wegmiller. "With academic [medical] centers witnessing this consolidation trend, they are now partnering with systems."

To remain competitive among the rapid consolidation and buying power of mega-health systems, independent hospitals and smaller health systems need to have more efficient and effective clinical processes across specialties. Mr. Wegmiller noted, "Without clinical effectiveness, you are merely just a collection of hospitals." Improving clinical processes is a step toward lowering overall costs.

Standardizing clinical process also does more than cut costs — it creates better quality of care and clinical outcomes for patients.

Clinical process improvement
"The big picture is the concept of clinical effectiveness," Dr. Hansen said. "All these added pressures from consolidation and financial burdens are requiring hospitals and health systems to prove clinical effectiveness. At the heart of all of this is the clinical process itself — the way we deliver care every day." The value of improving clinical processes is clear, yet knowing how to do so can be difficult. Taking the time to evaluate the clinical process also brings to light any waste in care delivery.

Dr. Hansen described two main areas that can be improved by effective clinical processes.

1. Failures of care delivery — "The lag between the development of best care practices and their adoption." Providers cannot deliver desired outcomes if care processes are not aligned with known clinical best practices. EHRs contain immense amounts of information intended to guide clinicians in decision making, but options for patient care, such as ordering workflows, may not always be updated to reflect the latest evidence-based practices. So, hospitals are at risk for inadvertently driving inappropriate care through outdated content, and, physicians may lose productivity or efficiency while grappling with multiple overlapping and outdated processes in a hospital's EHR system.

Dr. Hansen recommends hospitals develop an oversight process to determine not only what treatment is being provided, but also who is providing the treatment to the patient. By stepping back and recognizing where each patient is receiving care, providers can determine if there are better ways for a patient to receive the proper care from the appropriate physician. Also, by directly targeting unnecessary variation, there is no need to blame someone for the failure of care delivery; rather, the variation itself becomes the common enemy and the solution to providing the best possible care can be formulated.

2. Overtreatment — " We are delivering too much low-value or no-value care." A hospital's EHR may also contribute to overtreatment or inappropriate care. "Unfortunately, it is often common that we inadvertently make it easy for clinicians to do the wrong thing," Dr. Hansen said. For example, physicians may order an inappropriate medication, diagnostic test or procedure because an EHR system isbdriving them to do so.. . For example, Dr. Hansen notes physicians often encounter automated decision-making in an EHR system that can inadvertently push them to choose the wrong treatment. This is a big problem, because, as many hospitals are aware, one false treatment or test can lead to unnecessary spending and increased utilization costs downstream.

Conclusion
Providing patients the most up-to-date, streamlined process of care is often easier said than done. Because EHR systems contain so much information, some of which is outdated or no longer relevant, they can inadvertently cause a physician to choose a wrong treatment plan or a more expensive medication option. It is no surprise providers and insurers want to control a patient's entire path of care, from coming into a hospital to picking up a prescription on the way home, to ensure they receive the best care possible at the lowest cost. Big mergers and consolidation will be on the forefront of 2018, but all hospitals stand to gain from creating and managing efficient clinical processes.

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