The Demands of Healthcare Reform

by Scott Mosley

Re-form (/ ri-fawrm) noun - The improvement or amendment of what is wrong, corrupt, unsatisfactory. Anything about that definition strike you as applicable to the current state of healthcare in America?  As we stand in the shadow of the most sweeping overhaul of US healthcare policy in decades, some of its demands are just now being recognized. We have long understood that modest impact of incremental adjustments to the payment system would eventually be overwhelmed by the rising costs of doing business much as it’s always been done.  But, the yet-unrealized consequences of the recession, the crisis on Wall Street and the federal response on both fronts raised the ante considerably. The American consumer is in the midst of a rude awakening.  The real costs of handing social problems over to the federal government, to be addressed in Washington’s blender of partisan politics, are becoming more apparent by the day.  For all the huffing-and-puffing of political process, when it comes right down to it, where the rubber meets the road, it’s up to individual healthcare organizations and providers to find and implement real solutions.  Effective care coordination, patient safety and the continuous quality improvement can’t be legislated. So, if those who manage the day-to-day delivery of healthcare services are in the proverbial hot seat, what are the imperatives facing them?  First and foremost, increased operating efficiency.  But, tweaking systems and managing down controllable costs won’t yield necessary efficiencies.  The answers have and will continue to come in the form of significant and lasting overhauls of core operating models and delivery systems. While recent reform legislation promises to somewhat curtail growth in the adverse affects of the nation’s uninsured, this is likely to be accompanied by increased pressure on the federal government to constrain reimbursement and additional burdens on device and drug manufactures which can be expected to trickle down in the form of increasingly pressured margins for providers.  Forward-looking hospitals are starting to work more closely with physician groups in anticipation of a global payment system. Successful hospital/physician integration involves making fundamental changes focused on delivering better value through new delivery structures, such as accountable care organizations.  New models of care (patient-centered medical home) are emerging in the quest for efficiency.  But these new approaches to care delivery require substantial investments in information technology, necessary to more openly share vital data across the scope of a diverse and wide-ranging enterprise. Demands, in the form of capital investments, are likely to rise.  This promises to substantially challenge many hospitals which have limited access to capital or which have put planning into a “wait-and-see” mode as reform legislation bounced its way through the House and Senate.  Expect a spike in mergers and acquisitions as the day of the independent healthcare provider rapidly comes to an end. Reality is that true reform begins within the healthcare organization and has been underway for some time, fueled by responsible, visionary leadership.  The value associated with creating a learning environment that challenges the status quo and rewards innovation has never been greater.  Today, more than ever before, decisive action and well-reasoned assertiveness in re-envisioning healthcare and how it’s delivered promises positive results.  The faint-of-heart need not apply.