WELCOME to D+WC’s website and our inaugural “CLIFT Notes” blog.
This blog is the first installment of many to follow that promise new insights into disability prevention, disability management, disability forensics and physical rehabilitation. We launch this blog during one of the most epoch periods in health care history. We live in a time when a confluence of powerful forces are challenging traditional health care delivery and finance systems. Perhaps, most importantly we are witnessing profound paradigm shifts most notably, the transfer (long overdue) of one’s health management to the “patient” and away from the medical provider. Put another way, we are teaching our patients/consumers to fish instead of simply providing the fish. This is a dramatic shift over the fish buffet we have been serving for the past century. Striking the balance in responsibility between providers (teachers, mentors) and consumers (patients, injured workers) will be the ultimate challenge. A second major challenge will be collaboration amongst a diversity of stakeholders including visionaries from non-healthcare sectors (e.g. data analytics). These disruptive forces are driving transformative solutions that extend beyond the comfort zone for many. Transformations always involve some degree of pain especially for those who resist versus embrace change. However, change is typically the external force whereas transition is the individual’s response to change.
For this first blog we have chosen to provide a 60,000 foot view of current and emerging health care trends. There is certainly room for healthy debate as to what constitutes a “trend” versus a “fad”, but for the sake of this discussion, “trends” last more than ten years and permeate entire sectors wherein “fads” have shorter half-lives and less impact. Trends are not listed in any rank order.
One cautionary note; it is virtually impossible to examine these trends in splendid isolation as they are embedded in a complex matrix. Please read on.
1. Value-Based Reimbursement & Transparency:
Federal health care programs are increasingly focused on improved care coordination, disease state management, preventive care and performance-based reimbursement, e.g. PQRS-physician quality reporting system. Medicare currently has over 3,500 hospitals enrolled in a value based purchasing (VBP) initiative and depending upon the program; 6%-25% of all reimbursement decisions. Accountable Care Organizations (ACOs) drive “bundled payments” also known as “evidence-based case rates”, “episode-of-care payment”, “global bundle payment” and “package pricing” will displace fee-for-service across many settings. The Centers for Medicare & Medicaid (CMS) developed forty-eight “Bundled Payment for Care Improvement Initiatives” or BPCII episodes of care under study, e.g. heart surgery and hip replacements (Johns Hopkins & Cleveland Clinic respectively). The “Acute Care Episode Demonstration” or ACE focuses on the reduction in hip and knee replacement episode cost variations ($16,500-$33,000). In 2014, Blue Cross/Blue Shield plans nationwide collectively spent $71 billion dollars on value-based programs, which represented a 9% increase over 2013. This is very significant given that the Blues cover one in three Americans or approximately 106 million. UnitedHealthcare spent more than $37 billion on value-based payments to providers over the past several years. United covers roughly 45 million worldwide and maintains a provider network of nearly one million. Eleven million individuals receive value-based care through their ACOs. Becker’s Hospital Review reports that Aetna plans to make 75% of their claims payments for VBC by 2020. Aetna is already over one-third of the way to this target.
The days of a “black box” approach to reimbursement under fee-for-service models (FFS) are waning (although it may return with “Big Data”), e.g. release of physician procedure charges across the nation by Medicare “Provider Star Rating” website for physicians, skilled nursing facilities/SNFs, home health care/HHC, and dialysis. Future rules for reimbursement will be transparent, more clearly understood and available to multiple stakeholders. Increased financial risk sharing in the form of higher deductibles, premiums, copays, coinsurance and reduced benefits will continue to motivate many consumers to ask questions and more of them! The current mantra in healthcare is “In God We Trust, All Others Bring Data”; a future mantra may be “In God We Trust, All Others Bring and Share Valid Data!”
2.”Big Data”: Predictive and Population-based
A major shift is occurring from retrospective data to predictive or prospective applications. Population-based data applications are also displacing individual case-based data especially, in chronic disease states.
Unlike fee-for-service (FFS) where costs are often unknown until after the delivery of services, tomorrow’s providers and consumers will know upfront which service will be delivered and at what cost. Those providers who fail to adapt to this new paradigm will face a continued squeeze on operational expenses and perhaps extinction. We are still predominantly in the “cost is king” phase of health care evolution despite frequent use of the “Q” and “V” words…quality/value. For many, quality equals low cost however market forces have been shifting away from cost with great acceleration towards value propositions. In the meantime, there is an increased use of care “extenders” or inexperienced providers, e.g. PTA vs. PTs, NPs vs. PAs, and PAs vs. physicians. In physical therapy one can recognize an employment pattern of selecting 1-3 yr. PT grads over seasoned veterans. Additionally, the scope of practice particularly for NPs and PAs has been expanding on a market-driven basis. Generally, immediate cost (via reduced labor costs-only) savings are evident in this trend, but clinical and long term financial and clinical outcomes are still under study. With all due respect afforded to these valuable extenders, questions remain; “Does the use of extenders of care result in greater value?” “Do bundled payment models result in value?
“Big Data” may very well be synonymous with “proprietary data” and presents a great risk of a return to the ‘black box” approach wherein the keeper of the box is the only entity that knows the rules of reimbursement, e.g. payers and/or their utilization management vendors. Proprietary data claims represent a counter-trend to the transparency trend. Even the most well intended data management approach will need to overcome the yeoman challenge of intra-exchangeability between treatment settings and inter-exchangeability between providers and payers. Physical Therapy (medically necessary/evidence-based) is a true value proposition when compared to more costly alternatives, e.g. surgery, hospitalization, and protracted medication use (e.g. morphine, narcotics).
The prospects of “big data” have generated a great deal of enthusiasm for now. However, much has been written about the potential pitfalls and catastrophic results if “big data” fails to live up to the hype and is not better, accurate, secure, complete, transparent and unbiased.
Because medicine remains an art grounded in science, the clinicians’ notes are one of the richest sources of data that have largely remained unmined.
A prophet of the obvious would point out that corrupt data or even valid data which are misapplied may result in treatment and reimbursement decisions that may be seriously flawed. For some patients, this could be the difference between life and death or between disability and ability.
3. Chronicity: A Critical Need for Improving the Health Care System(s)
In 1996, nearly twenty years ago Hoffman and Rice opined (JAMA and Robert Wood Johnson Foundation “Chronic Care in America: A 21st Century Challenge”) that, “The United States does not have a coherent approach to caring for people with disabling chronic conditions”.
In 2004, I devoted an entire chapter: “Chronicity: Rehabilitation’s New Horizon?” (In Physical Rehabilitation’s Role in Disability Management, Elsevier) in which five observations were described.
- Chronic conditions have unpredictable treatment courses and uncertain prognoses relative to acute conditions.
- Chronic conditions usually require a protracted course of care.
- The U.S. healthcare delivery system is fundamentally geared towards acute not chronic care management.
- Acute care is predominantly generalist-driven while chronic conditions involve specialists, e.g. endocrinologists, orthopedists, neurologists.
- Chronic conditions also tend to involve multiple body systems and co-morbidities hence, persons with disabilities are confronted with more obstacles to recovery.
There is a saying that the more things change, the less things change. This appears to describe how chronic care has been handled fifteen years into the 21st century.
It took 70 million baby boomers to rattle the cage along with thousands of PCPs who were strict gatekeepers rewarded for non-referral of patients to practitioners like physical therapists who are experts in function. Our health care system has strongly evolved away from an acute care model with hospital bed capacity being the supply side measurement standard. There will be a time and not in the distant future where so-called “routine” visits to the PCP will not be routine. Hospitals continue to migrate beyond inpatient services and have embraced widely diverse revenue streams including accelerated acquisition of physician practices. Physical therapists are well positioned to increase their visibility (and hopefully market share) as chronic illness/conditions escalate, “treaters” become educators and mentors to the boomers and millennials who are demanding more and more information, are motivated (e.g. financial risk sharing, reduced benefits) to self-treat and prevent the onset and severity of chronic conditions like osteoarthritis, asthma, cardiovascular conditions and diabetes. Therapists are generally effective educators and because of their downstream position have often been the providers who educate their patient-client. Physical therapy and rehabilitation can be described as the unfinished business of medicine.
4. Physical Therapy continues to be considered a commodity by payers and consumers and, will very likely become bundled into episodes of care especially, in post-op orthopedic cases. Orthopedic and cardiovascular practices are on the leading edge of reorganization that incorporates physical therapy into an integrated delivery model that is competitive on a number of levels most notably, increases in internal capture rates for physical therapy referrals. Rehabilitation providers who are not partnered with other services may struggle for market share. It should be noted that there has never been a more important time for physical therapists to produce value-driven propositions and to brand themselves as “providers of choice” especially, in elder care and workers’ compensation. This is a daunting challenge for a highly fragmented industry with enormous variation in practice patterns.
Aging beneficiaries under managed care models and newly insured individuals under the AHA offer more opportunity for physical therapists to flex their muscles. Earlier or upstream referrals for physical therapy will be critical to success and an achievable goal for those who produce value propositions that are transparent. Physical therapy relative to other interventions offers one of the best value propositions in terms of benefit over cost. Unfortunately, therapy is often considered after other strategies have failed and an individual has entered the “chronic disability” stage. The literature is abundantly clear that “to delay rehabilitation is to compromise rehabilitation”. Rehabilitation must brand itself as a provider of first choice if it is to overcome its image as the unfinished business of medicine. Of course, the responsibility resides with physical therapists to demonstrate their value in functional measures and fi$cal therapy.
5. “Consumerism” and Patient Engagement
Coughlin, Wordham and Jonash of Deloitte succinctly describe the potential power wielded by consumers who are at increasing financial risk.
“An active and engaged consumer is implicit at the core of the health industry of the future---a value-oriented market-like system”. (Deloitte 2012)
It is well established that a FFS reimbursement model leads to overutilization of services by service recipients, but at the cost to employers and American taxpayers under federal and state programs. In a slumping economy this is an unsustainable pattern that is giving way to “value purchasing”. The “baby boomers” are the most affluent educated generation to date and are actively seeking information on how to prevent and manage their health especially chronic disease and disability.
The nexus of educated consumers and explosive growth in technology will surely transform health care as we know it today, but only if it motivates and strikes an emotional cord with consumers. Those providers who continue to furnish “treatment” only (especially of a passive or palliative nature) will be replaced by providers who are effective educators, mentors, case and disability managers. Again, people drive technology not, the other way around as many would have us believe. As Kyra Bobinet, a physician presenter at the San Diego HIMSS “Patient Engagement Summit” (Healthcare IT News, Oct 20, 2015) points out, live patient engagements cannot be fully understood through technology especially as providers are overloaded with data. Bobinet correctly points out that “behavior always dominates technology”. Readers are encouraged to secure a copy of Richard Wurman’s 1989 prophetic book “Informational Anxiety” for a great read. Perception drives people in terms of what they value. Some shop at Walmart others at Neiman Marcus, both customer bases perceive some degree of value whether it be cost-based or quality-based.
The boomers and millennials who score high in health literacy are purchasing mobile apps, smart phones, telehealth and wearable high-tech fitness/wellness devices. The Deloitte Center for Health Solutions through a 2012 consumer survey provide an excellent template for providers who wish to understand consumers who are “online and onboard” with online tools and mobile applications. Providers are also advised to bone up on their understanding of emotional intelligence and consumer decision making processes if they are to thrive in the unfolding health care world. Just for the record, in my biased view physical, occupational and speech therapists are among the best when it comes to empathy, mentoring and education of patients/consumers. However, these strengths are not enough and must be coupled with business acumen in order to face the confounding obstacles in maintaining one’s relevancy in new service delivery paradigms. Glowing “patient satisfaction” surveys and friendly staff will not have utility if the consumer is short of cash with limited medical benefits.
6. Partnering to win
Partnering used to mean leaving one’s silo and collaborating with others within the so-called “medical family”. Much of the focus of this partnering was along care management lines. Partnering continued to evolve into business arrangements in order for individual providers to gain critical mass, marketing and operational efficiencies through the formation of specialty networks. The first wave of hospital and physician alignment involved hospital acquisitions of physician practices that allowed the previous physician owner to practice independently. Now these alliances treat physicians as “employees” not “independent” providers. This arrangement places the locus of control in the hospitals or health system’s hands in terms of evidence-based practice applications and other elements that previously resided in the medical not, business domain.
Partnering now means medical plus non-medical collaboration especially pertaining to medical informatics and data management. Today’s partners represent every possible combination of insurance companies, employers, providers, data management firms and others. The days’ of going it alone and practicing in isolation from others are long over although, one could argue that the counter trend to partnering is maintaining a boutique practice because big is not always better.
7. Telehealth services rendered in 2014 represented a leap of 125% from 2013 and are expected to continue its exponential ascension namely, due to chronic conditions such as diabetes, heart disease, and asthma. Telehealth is used with increasing frequency for specialist services and with the current and increasingly short supply of primary care physicians continued growth is ensured especially in rural settings. The U.S. Health & Human Services/HHS projects a shortage of 20,400 family and general practice physicians driven principally by an aging population. The Affordable Care Plan/ACA contains incentives to address this shortage. Becker’s IT report notes that North America represents 40% of the current global market for telehealth with a market valuation of more than $30 billion. Telehealth has been identified as a priority issue among insurers and employers. In 2014, $6.5 billion was pumped into digital health an increase of 125% over 2013. According to many experts, this trend will continue to develop despite mixed results in terms of cost savings and clinical outcomes. There are evolving billing codes (CPT 99490) for telemedicine as demonstrated by CMS which pays physicians for remote chronic care management. This appears to partially solve the health care access problem, a key concern of the ACA. Medicaid is following Medicare’s lead by adding telemedicine reimbursement. It is simply a matter of time before commercial insurers align with Medicare policy & procedure. Even the California Department of Corrections & Rehabilitation is aggressively using telemedicine to reduce medical costs and assure access to some form of health care. This is notable given that CDCR has been under federal receivership for over a decade due to a tainted history and failure to provide a level of care consistent with the 8th Amendment mandate against “cruel and unusual punishment”.
8. BOOMERS living longer are more active and educated about healthcare of any generation to date. This demographic is collectively concerned about patients’ rights and have high expectations of service providers. They are more tech savvy than any previous generation. Ninety percent of boomers have at least one chronic condition and eighty percent has two or more chronic conditions. They ask more questions, want more self-help and self-control, and have more skin in the game ($$$) due to financial risk sharing in the form of healthcare premiums, co-pays, escalating deductibles and reduced medical benefits.
Boomers rely on providers for information more than treatment and represent the fastest growing telemedicine demographic.
A hugh market has developed for consumer education/training modules and self-help devices. One simply has to stay up after midnight to view the epidemic of infomercials targeting those who wish to take more control of their health.
9. Employers have finally awakened from a long winter’s slumber
The United States aside from its federal & state programs has relied heavily upon an employer-based health care system in which many employers abdicated control of healthcare delivery while still financing it. Managed care organizations exploited this willingness for employers to hand them the keys to the kingdom. This is not to say that MCOs were the villains in this scenario, for employers were willing participants in this scheme and in many cases zealous about it because they could focus on “their” core business. Once providers were aggregated into accountable units and financial risk was shifted to them in the form of capitation and its penalty for overutilization; provider costs were wrung out like a dishrag. Provider networks began to flourish and employers dipped one toe into the healthcare delivery pot through self-insurance. However, many of these employers soon learned that third party administrators were not saving them adequate dollars because they were reimbursed on a commission expressed as a percentage of case value. In other words, it was an incentive to keep cases open and grow them like a bathtub sponge animal. Courageous (and/or desperate) employers dipped their entire body into the healthcare pot through both self-insurance and self-administration of health care thereby, cutting out the so-called “middleman”. Insightful employers continued to shift from defined benefit plans to defined contribution plans, requiring consumers to share financial risk. Workers are now working longer careers due to increases in Social Security age among other factors. As just described, “baby boomers” likewise have assumed more responsibility for their own healthcare. The intersection of employer and employee enlightenment should lead to greater focus and expenditure on injury prevention, employee fitness and wellness programs that may prevent and delay the onset of disability and, even save a little money as well.
10. Millenials: Closing the gap
Technology is escalating principally due to the next and brightest generation, the millennials. As with any inter-generational discussion there tend to be stereotypes. Just ask any product of the 60s. Perhaps, the most common statement that I’ve heard is that baby boomers prefer traditional inter-personal communication while millennials prefer social media. I personally do not subscribe to strict dichotomies.
However, there is one thing for certain; millennials are more comfortable with technology because many of them grew up with it. My two-year old grandson is already adept at using his “puda” and my one year-old grandson uses the scroll feature to view pictures on my cell phone. All organizations may find it critical for success to close the generational gap as many mid-to-upper management positions are filled by baby boomers on the verge of retirement. Millennials occupy many of the vital roles in organizations and will be the future leaders, if they are not already!
In my personal experience (especially in San Diego), millennials as a group thrive in multicultural settings, are very open-minded, multi-taskers who appreciate rapid feedback. Is this not a formula for success as health care continues its rapid transformation through technology?
There is significant evidence that both the provider and payer communities are ramping up their social media capabilities from recruitment to continued education applications. Health care has historically been in its infancy relative to financial and social media advances. Those who adapt quickly carve-out disproportionate market share. My bet is on the adaptability of the millennials, just ask Mark Zuckerman.
Exponential growth in technological advances will be realized when the economy rebounds and bright tech-savvy college graduates enter the marketplace. Hierarchal healthcare organizations will be the losers along with those who do not value the collaboration strengths of millennials especially as health care migrates beyond bricks and mortar. Boomers are just the warm-up act for the millennials who will create and demand a vast array of unconventional interventions. In time, will “healthcare” become “healthtech”, “caretech” or simply “health”?
I for one hope that a balance is struck between high tech and high touch, between hands-on (treatment) and hands-off (consumer education) approaches and between an individual (patient) versus population-based (predictive analytics) applications in clinical decision making.
To paraphrase Winston Churchill, you can always count on Americans to do the right thing, after they’ve done all of the wrong things. Thanks for reading and good luck!