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Beyond reform: Health care's game changers

02/28/2014  |  By: Andrew McDonald, FACHE, Shareholder, Practice Leader Physician Business Solutions, LLC and Healthcare Consulting

As featured in the Nashville Business Journal.

Every day, nearly 10,000 baby boomers are turning 65, reaching a stage of life where hospital visits and health concerns become more frequent.

At the same time, if the Affordable Care Act works as designed, the Congressional Budget Office estimates 29 million people could gain new insurance coverage and access to health care by 2019.

All this is happening at a time when the health care industry is coping with a shortage of primary care doctors and rising external pressures to keep costs down — a tough proposition when more and more services are needed.

Taken together, these trends seem likely to force dramatic transformation in the industry, beyond the pressures of the 2008 Patient Protection and Affordable Care Act.

The time to stop care


In an attempt to get a handle on what the future of health care might look like, we posed the following question to key players from a variety of segments of Nashville’s health care world: What do you think is the No. 1 issue facing the health care industry in the next five years? We asked them to think beyond the Affordable Care Act, or, if it was impossible to talk about the future of health care without mentioning the reform, what specific part of the law they saw having the biggest impact on the industry in the next five years.

It’s a broad question, but one that draws a variety of specific answers. Here’s what we heard.

Lower prices, More patients

Health care accountant, investor and consultant

For Mike Collins, a 40-year Nashville health care veteran and CEO of 2nd Generation Capital, the biggest issue facing health care providers in the next five or so years is fairly straightforward.

“It doesn’t matter whether you’re talking about affordable care or reimbursement trends or any of that,” Collins said. “It’s simply a case of lower unit price and higher volume.”

More people are going to be getting insurance coverage in the next few years, Collins said, either through the Affordable Care Act or thanks to Medicare as the baby boomer generation ages.

At the same time, market forces are trying to drive down prices by encouraging price transparency, educating consumers and putting pressure on providers to curb costs.

Combined, it means doctors must find ways to serve the booming population while still turning a profit and likely will drive a continued trend of consolidation, physician practice groups and other cost-cutting combinations, Collins said.

Every “day, week or month,” medical care leaps forward, said Dr. Corey Slovis of Vanderbilt University Medical Center.

While those advances have great potential to improve care, Slovis said they carry a great challenge as well.

“The biggest conundrum that we are going to face in medicine is how much for whom. … What I mean by that is it seems like every day, week or month a new health care breakthrough in prolonging life unfolds,” Slovis said. “We are keeping more and more people alive who in the past would have succumbed to their illness.”

That makes the question more difficult of when to stop care. Slovis emphasized he’s not talking about a “death panel,” but rather doctors providing patients’ families “objective, clear medical advice.”

“That’s not a death panel; that’s quality care,” Clovis said.

It’s hard for people to consider at what point the best decision may be to end treatment, but once it’s their own family member, Clovis said, their perspective often changes.

“Too few people are willing to discuss that until it involves their own family.”

Not enough doctors

Insurance provider

A shortage of primary care physicians in the United States has long been a hot topic in discussions of health care’s future challenges.

But now, as more and more people gain coverage through the Affordable Care Act, Austin Madison, vice president at The Crichton Group, one of Middle Tennessee’s largest independent insurance agencies, said the squeeze is only going to get tighter.

That means that at the same time more people are getting insured and seeking access to physicians, “there’s just going to be the same pool of physicians to be seen.”

“Mind-blowing” tech


Primary care physicians aren’t the only ones coping with a transforming industry. Dr. Daron Clark of Downtown Dental says the biggest change is new technology now making its way from hospitals to specialties like his.

“The biggest thing that’s going to change dentistry in the next five to 10 years is the technology that’s coming on the market … is just mind-blowing at this point,” Clark said. “The technology is allowing us to provide better treatment more efficiently.”

The new drawing board

Hospital designer

What does Andrew Quirk, senior vice president for Skanska USA Building’s health care group, see when he looks into the future of health care? A totally new environment for its delivery.

“It’s almost impossible to think that the buildings that we have been utilizing to deliver health care for … centuries … are the spaces that can provide the changing needs [for how] health care is delivered,” Quirk said.

Not only is technology going to change the design of hospitals’ physical environment, Quirk said, large hospital companies are going to more carefully evaluate the return on investment for every square foot they own.

Outpatient services are growing in popularity, Quirk said, and hospitals likely won’t use their existing space in the same way.

“There’s a huge push for everyone to kind of get their head around what is it that [they] own … and is it being utilized in the best possible manner,” Quirk said.

Joining forces

Health care consultant

When it comes to the future of health care, Andrew McDonald, partner at LBMC, says the key word is “structure.”

“We’re going from kind of a cottage industry, especially on the physician side, to a structure industry,” McDonald said, explaining that especially for small, independent physicians, some sort of organizational support will be necessary to mitigate increased costs.

The “single-shingle doctor” is on the way out, McDonald said, if it’s not already gone.

Most doctors will need to join hospitals, physician practice management groups or other organizations that can handle the business side — IT, billing, etc. — while they focus on practicing medicine.

Consumerism vs. aging patients

Hospital management

When Capella Healthcare CEO Mike Wiechart talks about the future of health care, he crosses his arms diagonally.

One arm, pointed downward, represents a decline in consumption of health care driven by an increase in the role of consumerism in the industry. With more health savings accounts and high-deductible plans taking over the employer-sponsored insurance market, Wiechart said consumers are being encouraged to think about health costs more critically — and will likely choose not to get as many elective procedures that carry a high price tag.

Meanwhile, the arm pointed upward represents an aging demographic, reaching the age where they can both take advantage of Medicare and will likely need additional services.

Taken together, Wiechart said, these two trends are likely “to transform what the average acute care hospital looks like in terms of the services it provides.”

Data driving decisions

Health IT

Within an “overarching climate of reduced spending,” Medalogix CEO Dan Hogan said health care providers are under increased pressure to find ways to use data to drive more efficient care.

Because of that pressure, Hogan said, providers are investing more of their money in technology to help clinicians make better decisions.

For example, Hogan said, systems are being developed and sold that identify which genetic makeup will respond best to which drug, or how a patient history can determine what care choice will do them the most good.

Providers are looking for ways “to amend their care plans and policies to produce better outcomes,” Hogan said.

The graying of America

Post-acute and senior care

Since its inception in the early 1970s, National HealthCare Corp. has been in the business of caring for the elderly.

Looking into the future, business is poised to be good, thanks to what Gerald Collins, the company’s vice president of ancillary services and corporate relations, called “the graying of America.”

But while an influx of older patients will fill NHC’s facilities, Coggins said more preparation is needed. He said the vast aging population is the biggest challenge facing the health care industry. The Affordable Care Act has driven reform of acute care, he said, but post-acute care — not just senior care but rehabilitative services, skilled nursing, home health care, etc. — has yet to get the attention it deserves.

“It appears to me that the country, our state, are not really looking forward with as much diligence or as much concern that’s necessary.”

Beyond reform: Health care's game changers



Nashville Business Journal