Marshall Steele, MD, a board-certified orthopedic surgeon and founder and CEO of Marshall | Steele, a physician-led healthcare firm that develops destination centers in orthopedics and spine, discusses the potential effects of healthcare reform and how healthcare providers can transform these effects into opportunities.
The impact of healthcare reform
1. Movement toward risk-based compensation. In terms of compensation, healthcare reform will shift the risk, or “accountability,” for care from the insurers to the providers, according to Dr. Steele. Rather than paying on a fee-for-service basis, providers will be compensated based on patient outcome, whether through accountable care organizations or other capitation agreements.
“Providers will be required to report their results in some fashion, but the question remains how that will be derived and the overall impact that will have on payments,” Dr. Steele says.
2. Bundled payments. In addition to encouraging the creation of ACOs, more payors are moving toward bundled payments when reimbursing for certain conditions, such as knee and hip replacements, Dr. Steele says. Currently, Medicare is conducting a demonstration project using this type of reimbursement in a limited way. Should this trend spread across all areas of healthcare, many providers would have to adjust how they care for surgical cases, he says.
“Most hospitals don’t get involved in post-acute care beyond the discharge. They leave that up to the physicians and others. However, in the future, readmissions may not be paid for. In fact the hospital may be responsible for the cost of care up to 30 days or more after surgery,” Dr. Steele says. “This would include skilled nursing, physical therapy, etc. Bundled payments mean that hospitals, physicians and other providers will have to work together to determine how best to meet this challenge and divide payment.”
3. Increased transparency. Many of the policy changes in the healthcare reform act will require more transparency from healthcare providers and hospitals, according to Dr. Steele. “Today we don’t have robust data to prove the quality of care we provide,” he says. “Most hospitals and physicians don’t track and aggregate results. What they do track are complications. Complications don’t really answer the question: Did the procedure achieve its goals? Patients have increasing access to information or, in some cases, misinformation provided by third parties. [Increased transparency requirements] will be a huge issue for hospitals going forward. “
Dr. Steele says the increased access to quality data means that patients may no longer be loyal to their local provider. “Hospitals have often relied on the power of proximity, meaning patients in their area would automatically seek care at their institution or with their physicians. When information is not available this is a huge advantage. However, with increased access to information, certainly in the case of elective procedures, more and more patients will be inclined to travel. In order to keep patients from migrating outward, hospitals and providers will need to think differently and provide not only a good outcome but a unique experience as well,” he says.
Turning barriers into opportunities
By identifying the possible barriers and challenges to success, hospitals and other healthcare providers can turn these changes into opportunities to improve care and increase profitability, according to Dr. Steele. Here are three of his suggestions.
1. Create an extraordinary patient experience. While patients may have more information and may be looking for the best quality care, a great patient experience combined with a good outcome remains incredibly important. Even in our technology-based world, word-of-mouth advertising remains a persuasive tool, if not the strongest marketing tool in healthcare, according to Dr. Steele. “However, a merely satisfied patient will not necessarily refer a friend or family member to your facility,” he notes. “For example, you would not go out of your way to recommend a movie that was just good or okay to your friends. However, if it was something special, something unique or outstanding, you would make sure you tell them to see the film. It is the same with healthcare.”
2. Collect trend data and benchmarks for patient-recorded outcomes. As part of providing an extraordinary experience, healthcare providers should ensure they track patient outcomes after surgery. “It is as simple as having a patient answer questions pre- and post-op,” Dr. Steele says. “It seems simple enough; did the surgery work? Few providers are collecting this data, so there are few benchmarks. As healthcare shifts to paying for results and not just fee for service, it will be important for providers to show not just ‘what they did’ but ‘how well they did’ and what the result was.”
3. Develop better management. “If you don’t measure, you can’t manage,” Dr. Steele notes. As healthcare reform gets underway, providers can benefit from ideas of lean manufacturing to increase value while reducing costs and waste. Although some healthcare providers have embraced these ideas, few healthcare providers are truly running their organizations efficiently and effectively. Just ask any patient how long they need to wait in a doctor’s office or how many times they are asked the same questions.
“Providers are going to be asked to do more with less, and this will be a big problem if they haven’t been schooled in creating more value and identifying and reducing waste,” Dr. Steele says. “Providers need to develop tools to improve and benchmark themselves so they can understand how to increase their value to patients.”
Learn more about Marshall | Steele.
Dr. Steele discusses the three opportunities for healthcare providers in the following articles:
1) 4 Tips for Creating an Extraordinary Patient Experience to Increase Referrals and Profitability
2) Patient-Reported Outcomes: How Collecting and Benchmarking These Data Can Prepare Your Facility for Healthcare Reform, Improve Business
