According to Deloitte’s recently-published 2017 Outlook on US Health Care Providers, 2017 will be “full of both struggling and opportune transformations for health providers as they begin to feel the Medicare Access and CHIP Reauthorization Act of 2015’s (MACRA’s) reverberating impact and as technological innovation in healthcare evolves from reactionary to predictive.” U.S./Global Health Care Providers Leader, Mitch Morris, M.D., said, following the release of the outlook, “[Healthcare providers] are struggling with decreasing reimbursement, increasing costs, and a weak capital outlook…And at the same time, they see things ahead of them that are exciting, great opportunities to transform their business, but require investment.”
Morris, formerly senior vice president of health systems and CIO at Houston-based MD Anderson Cancer Center, where he was also a professor in gynecologic oncology and in health services research, has more than 30 years of healthcare experience in consulting, healthcare administration, research, technology, education, and clinical care. He recently spoke with Healthcare Informatics Managing Editor Rajiv Leventhal about the Deloitte report’s biggest takeaways, the post-election healthcare landscape, and how the future of value-based care looks with the new administration at the helm. Below are excerpts of that interview.
What were some of your biggest takeaways from Deloitte’s healthcare outlook?
We started working on this prior to the election and completed it after. Some things are up in air and other things we are confident will move forward. One of the things we expect to see during this period of uncertainty, with questions regarding in which direction CMS [the Centers for Medicare & Medicaid Services] will go; the role of innovation; the [future of] the Centers for Medicare and Medicaid Innovation (CMMI); and insurance enrollment, is that If you are a health system, healthcare provider or large medical group, right now people are saying they better conserve their cash, not make major investments, and not take on debt. We do think that federal funding will diminish. We know that it will not go up, so it can only go down for Medicaid and for the subsidies on the insurance exchanges. The net impact of that can be additional slow pay, no pay, bad debt, and financial challenges for providers. I do think many health systems and others in the provider ecosystem are figuring out that they need to execute flawlessly have a cost structure that is as tight as can be while still providing high-quality care. As the Republican Congress moves forward with the repeal of the Affordable Care Act (ACA), the industry will begin to sense a direction and be successful in whatever direction that is.
Mitch Morris, M.D.
Since the post-election landscape leaves key regulatory areas facing significant uncertainty, as you mention, how do you see the future of value-based care playing out?
There are two big areas; one is MACRA legislation, which will push us in the direction of alternative payment models (APMs). And MACRA was thoroughly bipartisan. What we hear in the media is about opinions for or against the ACA, but what Congress is thinking about are the unsustainable [healthcare] costs. What can we agree on? MACRA was something we agreed on. So it should move forward. Tom Price [just-confirmed HHS Secretary] said back when he was Rep. Tom Price, that regulatory reporting is burdensome to physicians. His mindset, as publicly stated, is that nothing should come in between the doctor-patient relationship, as it’s not the role of the government. He has also come out against payment bundles for joint replacement despite studies showing that they lower cost and improve quality. Where will he stand on these issues now that he’s the guy on the line for the budget? No one really knows. If they dilute the reporting requirements for MACRA, that will also dilute the ability to stratify based on MIPS [Merit-Based Incentive Payment System] for example, and that might slow the rate of adoption of APMs. The MACRA legislation passing was transformational when you talk about how our health system functions. If the ACA is primarily about affordable access, MACRA is about measuring on quality, paying on quality and encouraging new payment models.
Regarding CMMI, we have heard differing reports about the likely trajectory of what this piece of the agency will be. Price has spoken in favor of innovation, but he has also expressed concerns about the path CMMI has taken. His comments referred to things that have come out of CMMI as being mandatory. From the Deloitte perspective, those health systems already invested in new payment models, bundles and ACOs [accountable care organizations] are still doing it, but the momentum has slowed down a little, and because people are uncertain, there is a reluctance to make new investments.
Get the latest information on Health IT and attend other valuable sessions at this two-day Summit providing healthcare leaders with educational content, insightful debate and dialogue on the future of healthcare and technology.