The November Election – Window of Opportunity?By Alexandru Visan, MD, MBA Dec 9, 2016
Alexandru Visan, MD, MBA
A well-designed, long-term strategy should limit the impact of political uncertainty on the sustainability of a company. This statement is relevant to many industry segments and health care should not be an exception. The historical challenges that the health care industry has faced are complex; however, an essential component has always been the ferociously reactive nature of our business. Successful companies lead through innovation, in-depth understanding of all force factors influencing their domain, and brilliant forecasting of market conditions. Companies that only react to changes often will lose their market share or even fail.
Obamacare was passed during a window of opportunity that existed within the political landscape between 2009 and 2010. It allowed President Obama to completely restructure the reimbursement model known in our health care environment, as well as to accelerate the value proposition and pay-for-performance trend. This November’s election results brought another two-year window of opportunity to redesign health care insurance, reimbursement, and care delivery models. It is important to acknowledge that while there are differences in the approach to reform health care, both parties have agreed that health care costs need to be controlled and, if at all possible, lowered due to the massive spending in the U.S. health care. One legislative example is the passage of the Medicare Access and CHIP Reauthorization Act (MACRA) in April 2015 that received significant bipartisan support – an impressive achievement given the political environment at that time. MACRA is not a stand-alone piece of legislation. It is anchored within a decade of legislative efforts designed to transition providers and insurers toward more accountability, efficiency, and effectiveness within the health care system.
Our role as providers in the health care structure is drastically changing. We have to continuously ask ourselves if and why anybody will be willing to pay for our services.
The reality of limited resources and an increased portion of our GDP consumed by health care spending does not become less important with changes in the Oval Office or in the political balance in our Congress and Senate. It is essential for providers in all specialties to understand that the path toward reforming the payment structure in health care will continue and might even be accelerated over the next couple of years. The concepts of value, pay-for-performance, population health management, and consumer-centricity are here to stay and are forceful drivers for rapid innovation. The shift in financial support from procedure-based specialties toward preventative care is only in its beginning phase. Our role as providers in the health care structure is drastically changing. We have to continuously ask ourselves if and why anybody will be willing to pay for our services. There are a variety of stakeholders interested in our services: insurers, hospital systems, individual proceduralists, and patients. They all have different goals, different concepts of value, and a different approach to measuring performance.
Value within the health care service continuum is defined by essential components such as costs, revenue, inputs, and outputs. The biggest uncertainty anticipated within the next couple of years is related to the revenue component. Any changes to the current legislation will have a large-scale domino effect. Insurers will be forced to redesign their products, and potential decreases in their subsidies will markedly impact premiums, deductibles, and co-insurance. As recent trends have confirmed, these changes will place more pressure on health care systems and providers to lower costs and prove their value to insurers in order to avoid financial or contractual consequences.
To mitigate the influence of these changes and proactively setup for success, providers and health care systems need to have an excellent understanding of the costs required to deliver care and be prepared to deliver a compelling argument why our services are valuable to all stakeholders. They should also strive to be highly confident in the outcomes of care delivered in order to participate in two-sided risk sharing agreements that will be the hallmark of new payment models. To be successful leaders in the health care industry, we must become a significant player in defining and promoting valuable metrics and valid outcomes for our specialty.
Alexandru Visan, MD, MBA, is the CEO of Executive Cortex Consulting in Miami, FL. He is also one of the faculty leads for ASRA's Practice Management Portfolio program, which will be offered in conjunction with the 42nd Annual Regional Anesthesiology and Acute Pain Medicine Meeting April 6-8, 2017, in San Francisco, CA.