“Skin in the game” doesn’t work

https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2018.05018?stream=top&utm_campaign=newsletter_axiosvitals&utm_medium=email&utm_source=newsletter&journalCode=hlthaff

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Making people pay more of their health care bill out of pocket does not make them smarter shoppers, according to a new study published in Health Affairs, which corroborates earlier research.

The big picture: Part of the idea behind those ever-increasing insurance deductibles is that patients who have to put more of their own money on the line will become better consumers, comparison-shopping for the highest-quality, lowest-cost services.

  • But it doesn’t seem to work that way in the real world.

What they’re saying: In the Health Affairs survey of people with high-deductible plans …

  • Just 25% had talked to their provider about how much something would cost.
  • 14% had compared prices at multiple facilities.
  • 14% had compared quality metrics for multiple facilities.
  • 7% had tried to negotiate a price.

Between the lines: People don’t do these things because they don’t even think of it, or assume it won’t work. Or, to borrow some truly glorious academic-speak: “Perceptions of futility were common impediments to engagement.”

  • separate study, also published in Health Affairs, did find one effect of high deductibles: They seem to make women more likely to delay treatment for breast cancer.

Yes, but: There’s some evidence that if patients try to avail themselves of comparison-shopping tools, they can achieve real savings, at least for MRIs and other imaging procedures.

 

The Biggest Growth Opportunities in Healthcare

https://www.managedhealthcareexecutive.com/healthcare-leadership/biggest-growth-opportunities-healthcare?rememberme=1&elq_mid=5658&elq_cid=876742&GUID=A13E56ED-9529-4BD1-98E9-318F5373C18F

Healthcare growth opportunities for 2019 should pivot around the three big themes: digital transformation, value-based care, and patient-centricity, according to a new report.

According to Frost & Sullivan’s report, “Global Healthcare Market Outlook, 2019,” digitization of products, services, and commerce models are democratizing current healthcare systems, manifesting a new era of healthcare consumerism.

“Now the new vision for healthcare is not just about access, quality, and affordability but also about predictive, preventive, and outcomes-based care models promoting social and financial inclusion,” says Kamaljit Behera, transformational health industry analyst at Frost & Sullivan, and author of the report. “This makes digital transformation and realization of long-pending policies reform a key growth priority for healthcare executives and major health systems during 2019 globally.”

According to Behera, increasing pricing pressure and shifting the focus of the healthcare industry from a volume- to value-based care model demands that drug and device manufacturers elevate their business models beyond products to customer-centric intelligent platforms and solutions.

“In 2019, the healthcare market will continue to transit and stick into the value-based model,” Behera says. “More sophisticated outcomes-based models will get deployed in developed markets, and emerging nations will start following the best practices suited to their local needs.”

Despite the promise of digital transformation, the potential promise and actual commercial application still remain the poles apart from some of the most touted technologies like AI and blockchain, according to Behera.

“Current technology is often perceived to increase the barriers between patient and providers,” he says. “In order to bridge these gaps, healthcare executives need to change the debate around digital transformation and start look beyond the mirage of technology novelty and really focus on the outcomes.”

Behera predicts that these five areas will be the biggest areas of growth for healthcare in 2019:

1. Meaningful small data

Healthcare data analytics focus will shift from ‘big data’ to ‘meaningful small data’ by hospital specialty, according to Behera. “Increasing digitization of healthcare workflows is leading us to a data explosion along the care cycle, globally,” he says. “This makes insights generation from existing healthcare data for targeted use cases a relatively low-hanging opportunity relative to other emerging technologies. Additionally, health data being the ‘holy grail,’ the analytics solutions are considered the first foundational step to catalyze complementing technology promises leveraging healthcare data (e.g., artificial intelligence, cloud computing, and blockchain).”

Entailing this, Frost & Sullivan research projects the healthcare analytics market revenue to cross $7.4 billion in the United States by the end of 2020.

 “The key pivotal theme driving this growth opportunity includes population health management, financial performance improvement, and operational automation by patients, payers, physicians, and procedures,” Behera says. “Also, the rise of value-based care and outcomes-based reimbursement programs will continue to boost the demand for specialized analytics solutions.”

In 2019, payers and providers will continue to prioritize and leverage the potential of specialty-specific analytics solutions to investigate drug utilization, treatment variability, clinical trial eligibility, billing discrepancy, and self-care program attribution specific to major chronic conditions, according to Beherea.

2. Digital health coming of age with increased focus on individual care

“During 2019, we project application of digital health will continue to go far beyond the traditional systems and empower individuals to be able to manage their own health,” Behera says.

Favorable reimbursement policies (e.g., toward clinically relevant digital health applications) will expand care delivery models beyond physical medicine to include behavioral health, digital wellness therapies, dentistry, nutrition, and prescription management, according to Behera.

“For example, major insurance bodies are already using digital health services to communicate with patients,” he says. “Traditionally, lack of formal reimbursement processes is actually a deterrent to the uptake of these—wearables, telehealth etc. The next 12 months will see a relaxation of reimbursement rules for digital health solutions.”

The global aging population and an expanding middle class are major contributors to the chronic disease epidemic and surging healthcare costs, Behera says. “This year will be a pivotal year for defining value for healthcare innovation and technology for digital health solutions catering to aged care and chronic conditions management to bending healthcare cost curve,” he says.

“Telemedicine in emerging markets will become more mainstream and will aim to become a managed services provider [rather] than being just a telemedicine platform,” he says. “Telemedicine will move into the public health space as well, with countries like Singapore is testing the platforms in a regulatory sandbox. Finally, as the lines between retail, IT, and healthcare continue to blur, non-traditional players such as Amazon, Apple, Google, Ali Health, Microsoft, and IBM, among others, will continue to make further headway into the individual care space— providing the required impetus to public health systems to ensure accessibility and affordability of care-leveraging, patient-centric digital health tools and solutions.”

Healthcare executives should prioritize their roadmap for growing IoMT and connected health ecosystems (device-, wearables-, and mHealth-generated individual health data) in order to monetize these new sources of innovation and service-oriented future revenue streams, according to Behera. “The future focus should shift from drug and device mind-set to intelligent solutions/services, demonstrating outcomes-based health benefits to individuals and their caregivers,” he says.

3. AI

In next 12 to 18 months, the priority will be to bring AI/cognitive platform technology use cases closer to clinical care to augment the physicians and even patients with actionable decision-making ability, according to Behera. “In next two to three years, AI will become a common theme across all digital initiative and platforms.”

AI-based work flow optimization use cases will represent more than 80% of the workflow market contribution. These include:

  • The elimination of unnecessary procedures and costs
  • In-patient care and hospital management
  • Patient data and risk analytics
  • Claim processing
  • Optimizing the drug discovery process

“For example, Google is already at work to use machine learning for predicting patients’ deaths, and the results boast a flattering figure of 95% accuracy, which is better than hospitals’ in-house warning systems,” says Behera. “AI application across clinical and non-clinical use cases will continue to show hard results and further bolster the growth in the healthcare space in 2019.”

AI-powered IT tools that manage payers’ and providers’ business risks (including clinical, operational, financial, and regulatory) continue to be important for the market, according to Behera. “Across all regions in the world, AI-based cognitive technologies are proving to be the most useful for medical imaging and clinical diagnostics—as a decision-support tool—followed by AI application to derive intelligence on remote patient monitoring data to promote outcomes-based personalized care.”

4. Regenerative medicine

Cell-gene therapy combinations are rapidly gaining momentum, which make use of gene-editing tools and vector delivery systems to devise innovative curative therapies, according to Behera.

“There is also a pipeline of induced pluripotent stem cells (IPSCs), mesenchymal stem cells (MSCs), and adipose-derived stem cells (ADSCs) for novel therapeutic treatments for neurological, musculoskeletal, and dermatological conditions, among others,” he says.

These are poised for growth because rising pressures to decrease healthcare cost globally, the emergence of value-based reimbursement models, and healthcare digitization trends are transitioning the treatment model from “one-size-fits-all” to stratified and outcomes-based targeted therapies, according to Behera.

“Many factors determine the rate at which the stem cell therapy market advances,” he says. “It is driven by the success of stem cell treatments in curing life-threatening diseases such as cancer, heart diseases and neuromuscular diseases in the world’s aging populations. Emerging gene-editing techniques such as CRISPR/Cas9 that offer high precision, accessibility, and scalability, compared to other genome editing methods, such as ZFNs and TALENs for cell and gene therapy applications will continue to attract high investment both from venture capital and pharma companies.”

As regenerative medicine is redefining medical technology synergies by combining stem cell technology with tissue engineering, market participants should be investing in innovative models such as risk sharing, in-licensing/out-licensing deals, fast-to-market models, and in-house expansions, according to Behera.

“With cell-therapy manufacturing being time sensitive, biopharma companies should implement IT-based solutions for improved manufacturing capabilities,” he says. “Despite the promises with novel cell and gene therapies such as CRISPR/Cas9, questions around ethical application challenge its future potential. This makes it necessary for the life science research executives to work closely with regulators in developing guidelines and regulations [that will] guide ethical and real-word unmet needs of the healthcare industry.”

5. Digital therapeutics

“Digital therapeutics are about to become a true medical alternative that will utilize communication-based technologies, apps, and software to improve patient outcomes and help to lower the cost of healthcare,” Behera says. “Digital therapeutics offer the benefit to improve patient outcomes and reduce treatment cost by replacing the need for a drug or augmenting a standard of care, but they are not endorsed by a regulatory body, such as the FDA.”

Frost & Sullivan projects that the overall digital therapeutics market is to grow at a CAGR of 30.7% from 2017 to 2023.

“Digital therapeutics will become an exciting healthcare option that adds a curative dimension to technology,” he says. “As care for these chronic diseases expands in scope, prevention and recovery are becoming the new focus areas—apart from diagnosis and treatment. This demands a holistic view of individual health, lifestyle, and environmental data beyond the clinical health records to efficiently stratify at-risk patients for a preventive and targeted treatment paradigm.” 

Defining digital therapeutics appears at first glance to be a simple task, but challenges develop when attempting to define digital therapeutics as a market opportunity, according to Behera.

“Healthcare executives exploring the growth opportunities should prioritize their market positioning, which is often dictated by focused use cases (e.g., condition management vs. behavior management) rather than the technology novelty,” he says. “At present, many companies are either claiming to be or cited in the media as digital therapeutics, but only a small number of early-stage participants are seeking FDA certification based on randomized clinical trials. They make it critical for healthcare executives to keep a close watch on progressing regulatory developments, such as the FDA precertification program.”

 

 

 

Here come the Millennials!

We spend an awful lot of time in healthcare talking about the Baby Boomers. No surprise, America has spent decades—six-and-a-half of them, to be exact—contending with the impact of this historically large generation on nearly every aspect of our national life. From politics to economics to culture, the Baby Boom reshaped almost every facet of our society, and healthcare has been no exception. The fact that over 10,000 Boomers join the Medicare ranks every day means they’ll have a transformative effect on how healthcare is delivered and paid for—up to and including the sustainability of the Medicare program itself. So it may come as a shock to Boomers to learn that, starting in 2019, it’s no longer All About Them. This year America passes a new milestone: Baby Boomers are now outnumbered by Millennials. As the chart below shows, Boomers (whose average age is now 63), will be surpassed this year by America’s new Largest Generation. Born between 1981 and 1996, the Millennials are now 30 years old on average, and there are 72.5M of them, compared to 72.0M Boomers—a gap that will continue to widen. (Thanks to immigration, we have another 14 years until we hit “peak” Millennial, according to Census Bureau projections.)

This demographic achievement alone ought to earn Millennials a participation trophy—obviously, not their first. (Forgive the sarcasm…we’re Gen X-ers, it’s what we do.) But this changing demographic landscape brings big implications for healthcare. Boomers are just entering their peak “senior care” consumption years now, and we’ll have a quarter-century or more of very expensive care to fund for a generation that is by all indications more riven with chronic disease but more likely to live into very old age than previous cohorts. That creates the imperative for population health approaches that allow care for seniors to be delivered in lower-acuity settings. At the same time, however, Millennials are really just entering the healthcare system. For the next several years, most of their care needs will be driven by having babies and caring for growing families. But just as the last of the Boomers get their Medicare cards in 2029, the Millennials will begin to enter their “upkeep” years—demanding a variety of diagnostics, surgeries, and procedures to keep them thriving. Who will pay for all of that specialty care, and where will it be delivered? Today’s health system planners would do well to begin to look ahead to future capacity needs, and economic models.

The Millennials bring dramatically different service expectations as well. This is a generation raised in the era of Amazon. One-click purchases, same-day delivery, frictionless transactions, personalized offerings, low institutional loyalty—all of that will shape the way this generation thinks about consuming healthcare, with huge implications for providers. This is a high-information generation, whose adult years have seen a pervasive shift from physical to digital commerce, and they’ll expect healthcare to follow that trend. Ask today’s pediatric providers how different the Millennials are as parent-consumers—you’ll quickly get the picture. Even as physicians, hospitals and others scramble to retool care delivery to more efficiently manage the swelling ranks of seniors, they’ll need to keep a close eye on the preferences of Millennials, upon whom their future fortunes will rely, and who won’t tolerate the hurry-up-and-wait ethos that still pervades American medicine.

(Spoiler alert: waiting in the wings is Gen Z, digital natives born in 1997 and after. Guess what? There’s even more of them!)

 

Patient Financial Experience the New Focus for Revenue Cycle Tech

https://revcycleintelligence.com/features/patient-financial-experience-the-new-focus-for-revenue-cycle-tech?eid=CXTEL000000093912&elqCampaignId=8479&elqTrackId=be91ef7e45814e448e63f5f449863c07&elq=c0883462d36f46f1919e194284b0fcd0&elqaid=8937&elqat=1&elqCampaignId=8479

Facing healthcare consumerism and high deductibles, providers are seeking revenue cycle technology to deliver a high-quality patient financial experience.

Hospitals and practices have traditionally relied on public and private payers to cover the bulk of patient charges and costs for their services. Everything from their revenue cycle technologies to billing workflows has been tailored to create cleaner claims, reduce denials, and collect payer reimbursement.

But in an environment of record spending and changing attitudes towards purchasing and payment, payers are starting to shift more financial responsibility to their consumers. Nearly 21 million Americans had a high-deductible health plan or health savings account in 2017, and AHIP experts anticipate enrollment in high-deductible plans to continue climbing.

Increases in patient out-of-pocket spending are driving individuals to become more discerning healthcare consumers who demand more value for the medical services they receive. Plans and policymakers argue that the rise in healthcare consumerism will ultimately result in lower cost, higher quality care.

In the meantime, however, high-deductible health plans and other increases in out-of-pocket spending are presenting challenges to providers who are not used to this new player: the patient as a payer.

Three-quarters of providers report that they are seeing a noticeable upward trend in what patients must pay out of pocket.   At hospitals, total revenue attributable to patient balances after insurance rose 88 percent from 2012 to 2017.

While payers have been steadily shifting the financial responsibility to consumers, providers have yet to adapt their workflows and systems to collect revenue from this new source while delivering a satisfactory experience to consumers.

For example, nearly all 900 healthcare financial executives recently surveyed by HIMSS Analytics said their organizations still use paper-based billing and collection strategies – despite the fact that the same survey revealed more than half of patients prefer electronic billing methods.

Patients in the survey even said they were more likely to pay their medical bills if they had the option to do so online.

In light of these statistics, providers are facing the difficult task of transforming their manual patient collection processes to address this changing, consumer-focused trend.

“What we’ve seen historically has been that the revenue cycle has been not as well funded or not as strategically prioritized for healthcare delivery networks. A lot of the decision making has been either reactive or more short-term oriented,” Joe Polaris, Senior Vice President of Product and Technology at the health IT company R1 RCM, recently told RevCycleIntelligence.com.

“But we’re starting to see more of a long-term strategic vision coming together for their revenue cycles,” he added. “Organizations understand they need to make transformative change in light of some of the challenges that are only growing in the market, especially the need to be consumer-friendly.”

Revenue cycle technologies that cater to the patient financial experience are part of that transformative change, added Matt Hawkins, the CEO of Waystar, the newly combined revenue cycle management company formed by ZirMed and Navicure.

“Innovators are beginning, more so than ever, to treat the patient as a consumer,” he said. “A lot of health systems are demanding or embracing services or technologies that get them closer to patients from the earliest interaction point.”

The demand for technologies that cater to the patient financial experience is on the rise. And providers could face significant financial losses and patient retention problems if they fail to adapt to healthcare consumerism.

Becoming a patient-centered entity that can collect what it’s owed without alienating its consumers is a significant challenge, experts agree.  But embracing a handful of high-impact strategies could help to ensure that both patients and their providers complete the payment process feeling satisfied.

PRICE TRANSPARENCY LAYS THE FOUNDATION FOR PATIENT FINANCIAL EXPERIENCE

“Consumerism” may be a popular buzzword in the healthcare industry, but providers still have a long way to go before their patients can accurately compare their clinical journeys to their retail experiences.

For one thing, patients often agree to services or procedures with no clear idea of what they will ultimately cost.

Providers rarely offer prices or price estimates to patients prior to service delivery. In fact, the percentage of hospitals that are not able to give consumers price estimates actually increased from 14 percent in 2012 to 44 percent in 2018, a recent JAMA Internal Medicine study revealed.

With patients expecting the ability to plan their expenses, providers are looking to implement new revenue cycle technologies that can deliver accurate cost estimates and boost overall healthcare price transparency.

“How do we give patients shoppable experiences, so they can find out the cost of an MRI?” asked Christy Martin, Senior Vice President of Product Management at Optum360. “In their local care market, where is the best place to go in terms of both quality and cost? Then, if they go to a certain location, what are they expected to pay based on their insurance coverage? What would the out-of-pocket costs be at this point in the year?”

Informing consumers of their patient financial responsibility before the point-of-service is critical for providers seeking to improve the patient financial experience.

“In the immediate future, one of the things that we can unlock using technology is an understanding upfront about what the payment responsibility will be, and have that help inform all of the things that happen subsequent to presenting that to the patient,” Hawkins said.

Providing price estimates up front helped one health system in Oklahoma increase point-of-service collections by $17 million in seven years.

The Consumer Priceline tool at INTEGRIS Health is a database of charges for most procedures and services. The health system also promises to deliver written price quotes to consumers within two days if the service is not already included in the database.

INTEGRIS may be seeing significant patient collection improvements using price estimates, but providers should be aware that databases like the Consumer Priceline tool require a wealth of historical financial data.

“In the immediate future, one of the things that we can unlock using technology is an understanding upfront about what the payment responsibility will be.”

Merely posting chargemaster prices for common services and procedures is not necessarily helpful for patients. Giving consumers information about their patient financial responsibility and out-of-pocket costs is supposed to prevent sticker shock. Yet chargemaster prices are primarily used to start negotiations with payers, and the numbers can seem exorbitant to consumers.

“Chargemaster prices serve only as a starting point; adjustments to these prices are routinely made for contractual discounts that are negotiated with or set by third-party payers. Few patients actually pay the chargemaster price,” the Healthcare Financial Management Association (HMFA) explained to policymakers in May 2018.

Despite reservations about chargemaster prices, CMS recently required hospitals to publish a list of their standard charges online. And providers are scrambling to understand how to present the information in a meaningful way to consumers.

About 92 percent of providers in a recent poll said they were concerned about the new hospital price transparency requirement, and the majority also expressed concerns about how the public would perceive their standard charges.

Now more than ever, revenue cycle technologies that aggregate and analyze information on what patients actually pay will be critical for health systems.

UNIFYING THE PATIENT FINANCIAL EXPERIENCE

Healthcare is nothing like going grocery shopping. Not only do consumers not have access to prices, but the funding mechanism for medical services is also vastly different from a traditional retail experience.

Unlike what happens during a retail transaction, healthcare consumers rarely pay providers directly for services or procedures rendered. Instead, healthcare consumers use insurance plans, health savings accounts, and a wide range of other funding mechanisms to eventually pay providers after a service is delivered. They may also receive several bills and benefit documents from providers and insurers before receiving the final bill listing their financial responsibility.

As patients become more responsible for their healthcare spend, the onus is on providers to simplify the patient financial experience if they want to boost collections and save their bottom line.

Delivering a navigable and consistent financial experience is key to making the most of the newly consumer-driven environment, Polaris advised providers.

“The patient wants to have a clear and transparent journey through the healthcare system, and that’s much more challenging when they have to navigate different departments on different systems, asking for the same data over and over again, never coordinating, and never communicating a holistic end-to-end experience,” he said.

Integrated and seamless revenue cycle technologies aim to deliver a consistent patient financial experience by simplifying medical bills and bringing all providers in a practice, hospital, or health system under the same billing brand.

For example, a multi-specialty physician group in central Texas boosted patient collections by 24 percent and reduced the amount of patient cash sitting in A/R from 14 to two percent in one year by unifying the patient financial experience across their organization.

“Even though we were one clinic with 60 providers, our collection process treated every healthcare encounter separately,” explained Abilene Diagnostic Clinics CFO Andrew Kouba, CPA. “Patients were receiving bills for each physician they saw, which allowed them to pick and choose which bills to pay. When you get four statements and you think you got one experience, you’re confused as a patient.”

Consolidating all of Abilene’s providers under one billing system helped the group to deliver a consistent patient financial experience, which in turn simplified the payment process for consumers.

Revenue cycle departments are finding that end-to-end systems or interoperable bolt-on solutions are worth the investment. The integrated technologies allow healthcare organizations to guide the patient through the financial experience.

But to truly advance the patient financial experience, revenue cycle technology experts agreed that clinical and financial data integration is also vital.

“Being able to leverage the clinical and billing data to provide a better patient experience all the way around is a key capability,” Martin of Optum360 stated.

“While hospitals are certainly focused on providing high-quality care, there’s also this focus on how they can improve the overall patient financial experience to reduce the confusion, complexity, and lack of understanding around patient responsibility. Health systems are looking to provide ease of doing business to address patient responsibility and reduce patient bad debt.”

Revenue cycle technologies that can leverage both clinical and financial data are crucial to transforming the patient experience into a consumer-friendly encounter. Understanding the whole patient can help providers offer a consistent experience from the front office to the billing department.

SELF-SERVICE AS THE ULTIMATE PATIENT FINANCIAL EXPERIENCE GOAL

Price transparency tools and integrated revenue cycle technologies lay the groundwork for a consistent, intuitive patient financial experience. But revenue cycle technology vendors are also observing an increased interest in self-service portals and kiosks for the ultimate retail-like experience.

The disjointed, manual processes involved in the patient financial experience have not been convenient for consumers. Patients often have to interact with a call center or sit down with a staff member to complete basic tasks like scheduling, filling out insurance forms, or paying a medical bill, Polaris explained. In other industries, these tasks have already been replaced by mobile apps or automated systems.

“With digital self-service, we automate tasks like they do in the airline industry,” he said. “We let the patient book an appointment right on their mobile phone, get all the paperwork, fill out the forms they need, and check in at a kiosk.”

“Automation takes repetitive tasks that are frankly not patient- or consumer-friendly out of the process and makes the whole healthcare experience much more satisfying,” he stressed.

Self-service portals and kiosks have the potential to truly transform the patient financial experience into a more convenient, navigable journey. But healthcare organizations would need to invest in large amounts of revenue cycle automation to achieve this goal, Polaris acknowledged.

“Automation takes a lot of forms,” he explained. “There’s always been robotics, user emulation, and basic automation to complete individual tasks. But very few organizations have driven automation of entire processes, and that’s where we’re seeing more investment in transformative automation.”

Healthcare consumers have already voiced their support for more self-service options and more automation. A recent survey of over 500 individuals showed that in addition to offering more payment options and sending simpler bills, expanding access to self-service tools was a top suggestion for improving the patient financial experience.

“Automation takes repetitive tasks that are frankly not patient- or consumer-friendly out of the process and makes the whole healthcare experience much more satisfying.”

Providers are also expressing interest in implementing the relatively new technology in the revenue cycle space. Kouba from Abilene Diagnostic Clinic in Texas said he wanted to create a type of Disney FastPass for the patient financial experience.

“We want to simplify the process from pre-registration through bill collection and try to automate that similar to Disney’s FastPass,” Kouba stated. “Disney is one of the best experiences of all time and when you go there, they want you to interact with the people, all their products, and just enjoy yourselves. The last thing Disney wants you to think of is the terrible lines.”

“If we can remove the pain points and strive to ease that front piece, the patient will be focused on a friendly conversation when they walk in the door with the person that can answer questions, rather than being pestered to pull out their wallet.”

However, Kouba is not convinced that full automation will take over the healthcare industry any time soon.

As much as adopting retail-style approaches can improve the patient financial journey, providers must still ensure their technologies and processes work for them, too.

For example, Kouba decided that self-service technology that automates scheduling is not ideal for Abilene.

“In our group, most of our physicians like to follow their patients to the hospital, so the difficult piece with self-scheduling, especially from the provider’s side, is their schedules depend on what their rounds look like for the day. It’s very difficult to get them to commit to blocks of time,” he continued.

Self-service and automated tools may still be maturing in the revenue cycle technology space. But providers still have the option to improve the patient financial experience through systems that estimate patient financial responsibility and unify the billing experience.

And providers should be looking to the revenue cycle technology market for help. The rise of patient financial responsibility has been steady. Deductibles and out-of-pocket costs have been growing, particularly since healthcare spending growth rates rapidly accelerate.

Implementing the right tools for their patients and their providers will be key to empowering patients to choose the highest value care while ensuring providers get paid for it.

 

 

 

 

Top Six Healthcare Executive Challenges in 2019

http://www.managedhealthcareexecutive.com/executive-express/top-six-healthcare-executive-challenges-2019

The pace of change in healthcare is not slowing down; in fact, it is accelerating. Healthcare organizations that are most successful in 2019 will know what challenges and changes are coming down the pipeline, and they will prepare accordingly.

To help ensure you don’t get left behind, we’ve assembled the top six challenges the industry will face in 2019.

1. Shifting the focus from payment reform to delivery reform. For the past few years, C-suite leaders at healthcare organizations have been focused on navigating healthcare payment reform—attempting to preserve, improve, and maintain revenue. Amidst those efforts, delivery reform has sometimes taken a back seat.

That will need to change in 2019. Organizations that are the most successful will focus more on patient care than revenue, and they will see improved outcomes and reduced costs as a result.

Many organizations are already exploring delivery reform with initiatives that focus on:

  • Remote health monitoring and telemedicine;
  • Population health management;
  • Patient engagement;
  • Social determinants of health; and
  • Primary care.

In 2019, however, they will need to bring all of these initiatives together to implement sustainable improvements in how healthcare is delivered.

An added bonus? Organizations that accomplish this will see enhanced revenue streams as value-based reimbursement accelerates.

2. Wrestling with the evolving healthcare consumer. Healthcare consumers are demanding more convenient and more affordable care options. They expect the same level of customer service they receive from other retailers—from cost-estimation tools and online appointment booking to personalized interactions and fast and easy communication options such as text messaging and live chats.

Organizations that don’t deliver on these expectations will have a difficult time retaining patients and attracting new ones.

That’s not the only consumer-related challenge healthcare organizations will face. In 2019, millennials (between the ages of 23 and 38), will make up nearly a quarter of the U.S. population.

This generation doesn’t value physician-patient relationships as highly as previous generations. In fact, nearly half of them  do not have a personal relationship with their physician, according to a 2015 report by Salesforce.

Finding ways to maintain or increase the level of humanity and interaction with millennials will be a key challenge in 2019. Patient navigator solutions and other engagement tools will be critical to an organization’s success.

3. Clinician shortages. Physician and nurse shortages will continue to intensify in 2019, creating significant operational and financial challenges for healthcare organizations.

The most recent numbers from the Association of American Medical Colleges predict a shortage of up to 120,000 physicians by 2030. On the nursing side, the Bureau of Labor Statistics projects a need for 649,100 replacement nurses by 2024.

The implications of the shortages, combined with the fact that healthcare organizations face a number of new challenges in the coming years, are many. Fewer clinicians can lead to burnout, medical errors, poorer quality, and lower patient satisfaction.

Healthcare organizations that thrive amidst the shortages will find new ways to scale and leverage technology to streamline work flows and improve efficiencies.

4. Living with EHR choices. Despite the hype and hopes surrounding EHRs, many organizations have found that they are failing to deliver on their expectations.

recent Sage Growth Partners survey found that 64 percent of healthcare executives say EHRs have failed to deliver better population health management tools, and a large majority of providers are seeking third-party solutions outside their EHR for value-based care.

The survey of 100 executives also found that less than 25% believe their EHRs can deliver on core KLAS criteria for value.

As we recently told Managed Healthcare Executive, that statistic is striking, considering how important value-based care is and will continue to be to the industry.

Despite the dissatisfaction surrounding EHRs, switching EHRs may be a big mistake for healthcare organizations. A recent Black Book survey found 47% of all health systems who replaced their EHRs are in the red over their replacements. A whopping 95% said they regret the decision to change systems.

Hospitals and physician may not be entirely happy with their EHR choices, but the best course may be to stick with their system. Highly successful hospitals and health systems will find ways to optimize workflow and patient care which may involve additional IT investments and best of breed investment approaches, rather than keeping all of the proverbial eggs in the EHR basket.

5. Dealing with nontraditional entrants and disruptors. In 2018, several new entrants entered and/or broadened their reach into healthcare.

Amazon acquired online pharmacy retailer PillPack, and partnered with JPMorgan Chase and Berkshire Hathaway to create a new healthcare partnership for their employees. Early in 2018, Apple announced it was integrating EHRs onto the iPhone and Apple watch, and recently, Google hired Geisinger Health CEO David Feinberg for a newly created role, head of the company’s many healthcare initiatives.

New partnerships have also arisen between traditional healthcare entities that could result in significant healthcare delivery changes. Cigna and Express Scripts received the go-ahead from the DOJ for their merger in September, and CVS and Aetna formally announced the completion of their $70 billion merger November 28.

Read more about the top two ways the CVS-Aetna merger could change healthcare.

All of these new industry disruptors and mergers will impact healthcare organizations, likely creating new competition, disrupting traditional healthcare delivery mechanisms, creating price transparency and pressures, and fostering higher expectations from consumers in 2019. Keeping an eye on these potential disrupters will be important to ensuring sustained success in the long term.

6. Turning innovation into an opportunity. From new diagnostic tests and machines to new devices and drug therapies—the past few years in healthcare have seen exciting and lifesaving developments for many patients. But these new devices and treatment approaches come with a cost.

One of biggest 2018 developments that best exemplifies the challenge between innovation and cost is CAR T-cell therapy. This new cancer treatment is already saving lives, but it racks up to between $373,000 and $475,000 per treatment. When potential side effects and adverse events are accounted for, costs can reach more than $1 million per patient.

Finding the best way to incorporate new treatments like this one, while balancing outcomes, cost, and healthcare consumer demands, will be a top challenge for healthcare organizations in 2019.

 

 

 

Payer, provider trends to watch in 2019

https://www.healthcaredive.com/news/payer-provider-trends-to-watch-in-2019/545612/

Ripple effects from 2018 will continue well into the new year as players deal with some massive policy and business shifts.

 

 

Optum a step ahead in vertical integration frenzy

https://www.healthcaredive.com/news/optum-unitedhealth-vertical-integration-walmart/520410/

Vertical integration is all the rage in healthcare these days, with Aetna, Cigna and Humana making notable plays. 

If the proposed CVS-AetnaCigna-Express Scripts and Humana-Kindred deals are cleared by regulators, the tie-ups will have to immediately face UnitedHealth Group’s Optum, which has been ahead of the curve for years and built out a robust pharmacy benefit manager (PBM) business already along with a care services unit, employing about 30,000 physicians and counting.

UnitedHealth formed Optum by combining existing pharmacy and care delivery services within the company in 2011. Michael Weissel, Group EVP at Optum, told Healthcare Dive the company began by focusing on three core trends in the industry: data analytics, value-based care and consumerism.

Since then, the company has been on an acquisition spree to position itself as a leader in integrated services.

“For the longest time, the market assumed that they were building the Optum business [to spin it out] and what is interesting in the evolution of the industry is that that combination has now set a trend,” Dave Windley, managing director at Jefferies, told Healthcare Dive.

“United has now set the industry standard or trend … to be more vertically integrated and it seems less likely now that United would spin this out … because many of their competitors are now mimicking their strategy by trying to buy into some of the same capabilities,” he said.

Weissel said Optum will continue to push on the three identified trends in the next three to five years, with plans to invest heavily in machine learning, AI and natural language processing.

The question will be whether and how the company can keep its edge.

What Optum is

Optum is a company within UnitedHealth Group, a parent of UnitedHealthcare. Optum’s sister company UnitedHealthcare is perhaps more well known within the industry and with consumers.

However, Optum, a venture that encompasses data analytics, a PBM and doctors, has been gradually building its clout at UnitedHealth Group.

In 2017, the unit accounted for 44% of UnitedHealth Group’s profits.

In 2011, UnitedHealth Group brought together three existing service lines under one master brand. Services are delivered through three main businesses within a business within a business:

  • OptumHealth – the care delivery and ambulatory care capabilities of OptumCare, as well as the care management, behavioral health, and consumer offerings of Optum;
  • OptumInsight – the data and analytics, technology services and health care operations business; and
  • OptumRx – its pharmacy benefit service.

The company focuses on five core capabilities, including data and analytics, pharmacy care services, population health, healthcare delivery and healthcare operations. Services include but are certainly not limited to OptumLabs (research), OptumIQ (data analytics), Optum360 (revenue cycle management), OptumBank (health savings account) and OptumCare (care delivery services).

The Eden Prairie, MN-headquartered company has recently expanded its care delivery services, with much of the growth coming from acquisitions. The past two years have seen Optum expand its footprint into surgical care (Surgical Care Affiliates), urgent care (MedExpress) and primary care (DaVita Medical Group).

It’s a wide pool, but the strategy affords UnitedHealth the opportunity to grab more revenue by expanding its market presence. For example, the DaVita acquisition, which is still pending, allows OptumCare to operate in 35 of 75 local care delivery markets the company has targeted for development, Andrew Hayek, OptumHealth CEO, said on an earnings call in January.

Optum’s strategy of meeting patients where they are and deploying more ambulatory, preventative care services works in concert with its sister company UnitedHealthcare’s goal of reducing high-cost, unnecessary care services, when applicable. If Optum succeeds in creating healthier populations that use lower levels of care more often, that benefits the parent company UnitedHealth Group as UnitedHealthcare spends less money and time on claims processing/payout.

The strategy has been paying off so far.

Three charts that show UnitedHealth’s financial health as it relates to Optum

Optum’s presence has grown as it has steadily increased its percentage of profits for UnitedHealth Group.

Credit: Healthcare Dive / Jeff Byers

In 2011, the first year Optum was configured as it looks today, the company contributed 14.8% of total earnings through operations to UnitedHealth Group with $1.26 billion. That’s about 29 percentage points lower than in 2017, when Optum brought in $6.7 billion in profits on $83.6 billion in revenue.

Broken down, it’s clear that pharmacy services make up the lion’s share of the company’s revenue. In 2017, OptumRx earned $63.8 billion in revenue, fulfilling 1.3 billion prescriptions. OptumRx’s contributions to the company took off in 2015 when Optum acquired pharmacy benefit manager Catamaran.

Credit: Healthcare Dive / Jeff Byers

In recent years, OptumHealth has grown due to expansion in care delivery services, including consumer engagement and behavioral and population health management. The care delivery arm served 91 million people last year, up from 60 million in 2011.

OptumInsight has grown largely due to an increase in revenue cycle management and operations services in recent years.

On Wall Street, UnitedHealth Group is performing well and has seen healthy growth since 2008. The stock peaked in January and took a dive when Amazon, J.P. Morgan and Berkshire Hathaway — industry outsiders yet financial giants — announced they would create a healthcare company.

Credit: Healthcare Dive / Jeff Byers

While these charts suggest a dominant force, the stock activity shows that investors believe there’s still more room for competition, if the new entrants play their cards right.

Where Optum could lock out and rivals could cut in on competition

UnitedHealth started down this strategic path many years ago and the rest of the industry just now seems to be catching up.

“Optum’s been the leader in showing how a managed care organization with an ambulatory care delivery platform and a pharmacy benefit manager all in house can lower or maintain and bend cost trend and then drive better market share gains in their health insurance business,” Ana Gupte, managing director of healthcare services at Leerink, told Healthcare Dive. “I think they have been the impetus in the large space for the Aetna-CVS deal.”

Because the company is multi-dimensional, Optum’s competition will be varied. If all the mergers making news — including the Walmart’s rumored buyout of Humana — close, here’s what competition could look like:

Perhaps oddly, its largest revenue contributor, OptumRx, seems to have the largest vulnerability for competition in the coming years.

Optum’s competitive advantage in the PBM space is driven largely by already realized integration. Merging data across IT systems is no easy task, and Optum has spent years harmonizing pharmacy data across platforms to assist care managers in OptumCare to see medical records for United members.

Anyone with experience implementing EHR systems can tell you such integration doesn’t happen over night.

If the Cigna-Express Scripts deal closes, the equity can compete with OptumRx, but the technology investment needed to harmonize data and embed Cigna’s service and pharmacy information into Express Scripts servers will take time, Windley said. Optum, on the other hand, has invested in the effort and integration for years.

Gupte says the encroaching organizations in the PBM space have the ability to realize the efficiencies and savings and the integrated medical that Optum has been realizing across OptumRx and the managed care organization.

Optum’s leg up in PBM space could last two to three years over the competition, she said.

On the care delivery side, OptumHealth has been purchasing large physician groups for a variety of services. There are only so many large physician groups putting themselves on the market, and Optum has been making bids for them.

There’s still a bit of white space to fill in its 75 target markets, but analysts note Optum may have the competition on lock in this space

Even if CVS-Aetna closes, OptumCare is a $12 billion business with many urgent and surgery care access points. If CVS-Aetna is finalized, the company will have about 1,100 MinuteClinics capable of realizing efficiencies with Aetna, but, as Windley notes, they likely won’t have primary care or surgery care elements.

There’s also a lot of time and capital needed for building out and retrofitting retail space to medical areas.

On the surgical care services, “I don’t see either Cigna, Aetna or Humana getting into that business,” Gupte said. “That will be one element of their footprint on care delivery that will be unique and differentiated for them.”

Urgent care has the potential for outsider competition, she added. However, Optum is using its MedExpress business to treat higher acuity conditions and have an ER doctor on staff in each center. Compared to the typical types of conditions treated in retail clinics or those that would be feasible over time, Gupte believes services that could be seen in CVS or Walmart would be lower acuity, chronic care management services.

“[Optum has] been so proactive and so strategic I don’t think there’s going to be a lot of reactive catchup they have to do,” Gupte said. “I think it’s going to be hard for the other entities to play catch up, outside of the PBM.”

One potential issue will be harmonizing the disparate businesses so patients can be effectively managed across the various organizations, Trevor Price, founder and CEO of Oxean Partners, told Healthcare Dive.

“I think the biggest challenge for Optum is operationalizing the combined platform,” Price said. “The biggest question is do they continue to operate as individual businesses or do they merge into one.”

What’s next?

Optum will continue to explore ground in the three core trends it has identified.

Out of the three, consumerism has the longest path to maturity in healthcare, Weissel said, adding he believes consumerism is going to change healthcare more than any other trend over the next decade.

“There is a wave coming, and this expectation that we will move there,” he said. “Increasingly, this aging of people who become very comfortable in a different modality is going to tip the balance with how people will want to interact with healthcare. I know there’s pent up demand already.”

That means the company is putting bets into the marketplace around consumer building and segmentation models as well as thinking about how to connect data to allow patients to schedule appointments, view health records, sign up for insurance, search for providers or renew prescriptions online.

Consumer-centric projects currently underway include digital weight loss programs — including streaming fitness classes — and maternity programs to track pregnancy. The company is also experimenting with remote patient monitoring to understand the impacts on those with heart disease or asthma and to search for service opportunities.

Optum will pursue investments as well as acquisitions to push into the consumer space.

“When it comes to acquisitions to Optum overall, we’re always in the marketplace looking to extend our capabilities, to extend our reach in the care management space to fill in holes or gaps that we have,” Weissel said. “That’s a constant process in our enterprise.”