As the health care industry moves toward value-based care from the fee-for-service model, health care organizations are focused on boosting their existing services and capabilities and operating them more effectively.
Not to be overlooked, streamlining operating costs and improving privacy practices are also primary business concerns for health care executives, according to Proskauer’s recent survey of 100 health care executives.
What’s driving these concerns? Namely, organizations’ desires to achieve The Triple Aim objectives: reducing health care costs, improving the patient experience and improving the health of populations.
As we head into 2020—exactly a decade since the passage of the Affordable Care Act—here’s a look at how far the industry has come, and where we still have to go in our collective journey to value-based care.
Back to the Future to Control Costs
In the past decade, M&A health care deals have spiked significantly—both in terms of deal volume and value. This activity has predominately been led by industry thinking that quality and efficiency is driven by size. In other words, bigger is better when it comes to delivering health care.
As we head into 2020, our study found that health care executives are going back to M&A basics. Rather than scaling further, they are investing in technology that will boost existing services and capabilities, and operate them more effectively and efficiently. When asked about their top M&A targets over the next two years, the plurality of survey respondents cited acquiring AI assets (31%). An additional 19% are also prioritizing acquisitions in technology companies to help streamline non-R&D business operations.
For health care executives, efficiency means better utilization of existing services, which can curb operating costs. As providers continue to search for ways to control costs in 2020, expect a subsequent upswing in technology-related deals.
Finding the Right Rx is Based on Delivering Good CX
Looking back on the past decade in health care, a defining theme has been the uptake of technology among providers. At the core of this has been the adoption of electronic health records (EHRs).
While the near universal adoption of EHRs has facilitated improvement in provider collaboration and information sharing, ultimately improving outcomes, it has introduced new challenges to care delivery. For instance, many doctors now report spending more time “clicking” than interacting with patients.
Put simply, if the last decade was focused on technology adoption, the next decade will be defined by how well health care companies are able to leverage said technology to improve the patient experience. In the next year, based on survey results, anticipate health care companies to prioritize employee training as a way to better promote a coordinated, innovative and value-based care approach. Additionally, and particularly among clinical organizations, keep an eye out for new incentives to promote participation in existing information sharing groups.
From Foe to Friend
The implementation of the ACA didn’t just introduce changes to the health care industry, it launched an intense (and ongoing) political battle over insurance coverage, cost and reimbursements. Debates unfolded at the national level, but also at the state and local level—leaving health care companies to navigate a dizzying array of often conflicting guidelines. As a result, many health care organizations treated regulatory bodies, including CMS and state heath departments, as an obstacle in their path to achieving value-based care.
But that’s changing. Looking ahead to the next year, health care companies are increasingly seeing these same regulatory bodies as partners that can help them innovate and test new models, subsequently allowing them to better manage their patient populations. When asked to rank CMS on a scale of 1 to 10 (10 being highly effectively) when it comes to fostering innovation, more than half (52%) of executives gave a score of 8 or higher. In many cases, this shift is driven by regulatory agencies and innovation hubs like the Center for Medicare and Medicaid Innovation offering grants and funding sources to support forward-thinking providers and risk-based pricing models. As more providers seek to capitalize on these grants in 2020, anticipate a continued improvement in regulator-health care company relations, resulting in enhanced collaboration, innovation and subsequently, improved population health.
Want to learn more about what’s ahead in 2020 for health care companies? Full survey results are available here and Rick Zall is at email@example.com.