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Bette Davis Wisdom? Facing the Coming Series of Capitol Hill Cliffs with Calm

January 7, 2013
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Facing an uncertain payment environment, healthcare IT leaders must look to vision and execution


It’s so easy to go straight to quotes from classic movies, isn’t it? On the other hand, this one from Bette Davis just seems to fit perfectly, right now: “Fasten your seat belts. It’s going to be a bumpy night!” Indeed, had Margo Channing of “All About Eve” been around these days to witness the off-kilter politics in Washington, D.C., her famous line would have fit the situation perfectly.

Bette as Margo

The reality, as Premier health alliance’s Blair Childs confirmed to me last week, is that we’re all facing a year ahead of policy uncertainty and of legislative conflict on Capitol Hill, in a situation that is expected to remain tense and unpredictable for at least most of 2013. There will be the coming showdown over the next raising of the debt ceiling, which will come sometime in late February or early March; the negotiations that will have to be engaged in, in order to work out the federal spending cuts contained in the budget sequester, whose impact was forestalled on Jan. 1 when the “fiscal cliff” legislation was passed by Congress, but only delayed for two months; and the work that needs to be done on the continuing budget resolution—the core federal budget preparation that must be done every year—and whose current resolution expires on March 27.

In other words, the next three months on Capitol Hill will be ones of extreme tension and partisanship, as the two major political parties engage over what to do about taxes, spending, and federal policy priorities. (CNNMoney offers a concise summary of the three looming new “cliffs” here.)

And, as Premier’s Childs underscored in our interview last week, Medicare policy and reimbursement issues are going to become completely caught up in all the partisan warfare, which means inevitably that healthcare senior leaders are going to have to execute their operational planning for this year in an environment of exceptional policy and payment uncertainty. Historically, the vagaries around Medicare reimbursement would be such that there might be uncertainty around the margins in any given calendar year; yet this year, as Blair Childs noted, we really are facing unprecedented questions around reimbursement policy and levels. And the reality, of course, is that a potential across-the-board 2-percent Medicare cut to hospitals, on top of everything else coming out of the three mandatory healthcare reform programs (value-based purchasing, avoidable readmissions reduction, healthcare-acquired conditions reduction), really could prove devastating to many hospitals.

Blair Childs

Yet at the same time, hospitals, and physicians, simply must move forward on meaningful use under the HITECH Act, as potential pay cuts following 2015 loom for those providers who have not been successful in meeting all the MU requirements by then. So everyone will be swimming forward without a life jacket here, particularly as the bills are having to be paid for the implementation of all these core clinical information systems that simply must be put into place in the next couple of years.

For CIOs, CMIOs and other healthcare IT leaders, the bottom line in all this will be the need to walk an increasingly narrow footpath going forward. Developing accountable care organizations, signing bundled-payment contracts, creating patient-centered medical homes, engaging in population health—all of those activities will demand the implementation of analytics programs, the hiring and promoting of analysts, the expansion of data warehouses and data marts, that will facilitate success in all those areas. Yet such programs—and people!—will inevitably be expensive.

In the end, healthcare IT leaders will need, more than ever, to craft and execute strategic IT plans that absolutely meet the top organizational goals of their organizations, and that can gain the unflinching support of their c-suites, and more than ever, their boards of directors. Gone forever are the days when smaller departmental information systems could be approved at lower levels; these days, board presentations are de rigueur when it comes to explaining why a hospital, medical group, or health system needs to spend another $20 million to get to the next stage of MU or to create the foundation for an ACO or a PCMH program.

Unfortunately, the uncertainty around precise federal reimbursement levels is simply not going to go away anytime this year, and that will doubtless cause healthcare and healthcare IT leaders tremendous headaches in 2013. But what is clear is that the purchasers and payers of healthcare on the federal, state, and private levels want a newly transparent, accountable, cost-effective, highest-quality-possible healthcare system. And those healthcare IT leaders who can help to lead and guide their organizations forward on needed innovation, coming out of a core grasp of the vision of the new healthcare, will continue to be successful—despite the uncertainty of the payment environment. Sure, it’s going to be a bumpy year ahead; but the pioneer organizations in healthcare will succeed nonetheless. Bette Davis would be proud.