Scanning the federal healthcare policy landscape, with all its complexities, policy and political shifts, and timetables, can often be a daunting exercise for healthcare executives and leaders. But one thing seems exceptionally clear already: policymakers and purchasers are inevitably, over time, chipping away at the fee-for-service foundation of provider reimbursement, and replacing it with an increasingly complex system of incentive-based payment programs and tracks that, over the next 10 years, has the potential to make some hospitals, physicians, medical groups, and health systems eminently successful, and to shutter the doors of others.
As is evident in my interview last month with Jane Metzger of the Waltham, Mass.-based Global Institute for Emerging Healthcare Practices, a division of the Falls Church, Va.-based CSC, the future is already here now with respect to some of the data collection and data reporting requirements emerging out of healthcare reform. Medicare’s value-based purchasing, hospital readmissions reduction, and healthcare-acquired conditions programs are all getting underway now, and hospitals were required to begin collecting chart-abstracted quality outcomes measures for the first year of value-based purchasing on July 1 of this year. The other two mandatory programs have similarly speed-infused implementational timetables; and all three programs will be handing out carrots and sticks quite soon.
Potentially, the plus-or-minus variation in Medicare payments under these three programs could amount to several percentage points of overall Medicare reimbursement for hospitals, enough to significantly boost a hospital-based organization or to potentially close it. What’s more, not only do those percentages not take into account any payment variations related to either the accountable care organization shared savings program or the bundled-payments program (both of them voluntary), neither do they take into account additional potential payment cuts from not fulfilling the requirements of meaningful use under the HITECH Act (not voluntary).
What’s more, with the deficit-reduction “super-committee” beginning its deliberations in the U.S. Congress right now, the chances of across-the-board provider payment cuts are very high, as the Medicare program has been cited by the White House and both parties in Congress as an area for potential budget cuts in order to reduce the federal budget deficit. And since changes to beneficiary access and benefits are inherently risky for politicians, the prospect of provider reimbursement cuts becomes stronger than ever going into the final months of 2011.
And here’s another thing: because of the super-committee/debt-reduction situation in Congress, the chances of “re-patching” the SGR (sustainable growth rate) physician payment gap under Medicare are looking increasingly remote. So physicians in practice will also be under increasing pressures if the “patch” dies permanently.
And it goes without saying that private health insurers will be mimicking Medicare’s moves under healthcare reform; indeed, many of them already have incentive-based programs of their own, and most have some sorts of plans in the works.
All of this, of course, means that healthcare IT leaders will be under rapidly accelerating pressures to deliver data, analytics, and decision support at increasingly intensified levels. Without robust data warehouses, nimble performance dashboards, highly useful clinical decision support at the point of care, and every other tool that makes sense, clinicians will never be able to improve clinical performance to the levels all these programs will be requiring. To say that the next few years will be challenging would be the understatement of the century. But the smart leaders of the smart organizations in healthcare are already pushing ahead, in a data-charged, evidence-based, collaborative way, to move the healthcare system to new levels of performance, as policymakers and purchasers are demanding. The only question remaining is this: will your organization be one of those that thrives—or even survives—the transition to the new healthcare?