Mary Mosquera, writing in Healthcare Finance News, outlines five broad challenges facing healthcare systems:
Among the biggest challenges that healthcare executives are confronted with this year are:
1. Pacing the shift to value-based models. Healthcare leaders continue to put infrastructure and governance practices in place to support value-based models even as providers still have significant fee-for-service revenue. However, many providers are concerned that they may be reaching a point at which the cost of building and maintaining their value-based organization is not supported by their fee-for-service reimbursement model.
2. Responding effectively to the economic dynamics of local markets. Health organizations that are migrating to value-based models must contend with the realities and limits of their local economies, the strategies of large employers for reducing their healthcare costs, concentration of the payer market and physician practice alignment.
3. Securing and growing market share. Gaining market share remains a big concern regardless of the pace of the payment model change. Providers must weigh market strategies, including consolidation and traditional and non-traditional partnership and strategic relationships, even as volume continues to drive a large share of revenue.
4. Developing alternative revenue streams. Health systems with cash reserves and strong margins are better positioned to make investments that are related to, but not necessarily directly in support of, their core patient care business. Investments that can supplement declining revenue from payers can include ambulatory care centers, telemedicine, business software development and pharmaceutical research.
5. Containing core operating costs. Health executives continue to seek approaches to rein in the costs of their core operations, reduce utilization through standardization, and manage care variations. Even high-performing organizations can obtain additional cost containment by taking a systems approach that is rigorous and transparent.
What are the implications for pathologists, especially those of us still in fee-for-service based groups? Since we are faced with these same challenges, how will we respond?
Speaking from my own recent experiences in both community hospital and academic medical center settings, pathologists are being increasingly asked to commit significant time and effort to intensively participate in reducing waste and improving appropriateness of care as it relates particularly to lab test utilization and blood utilization.
However, there is currently a disconnection between direct and specific compensation this involvement and the work involved. Hospitals improve their financial performance (more $$$) but these doesn't seem to be any simoleans coming our ways for the effort. As Ms. Mosquera reported in an article last year, only about 10% of payments to hospitals and providers are "value-based." Moreover, of these payments, less than half (43%) give providers financial incentives without risk by offering a potential bonus or added payment to support higher quality care, while 57% put providers at financial risk for their performance if they do not meet certain quality and cost goals. I wonder, "what's in it for me?" when we bill for clinical pathology professional component--and yet the hospitals are asking me to "lend" my expertise and support to help their bottom line and put my bottom out there to tell clinicans they can't have a certain expensive test or a (probably unnecessary) blood product. Oh yes, I'm also supposed to educate my clinical colleagues on appropriate test and blood utilization. I guess we're supposed to be happy that we get the measly "Part A" payment from the hospital? or just have a job?
Pathology groups also need to closely look at #2 through 5 and work through these just as the hospitals are. Unfortunately, the local markets and opportunities for growing market share have been distorted and hurt by condo labs carved out by GI, urology and dermatology groups, national labs hoovering up local groups' AP work below cost, and national-based specialty-based AP companies. With recent dramatic cuts to 88305 and 88342, there is some hope of getting some of this work back into the community but it may take awhile to play out. Meanwhile, baby needs a new pair of shoes.
Alternative revenue streams are a more realistic possibility but will require creativity on the part of leaders and managers of pathology groups. A few will grasp these opportunities. Most seems to have a deer in headlights look and hope to hang on until retirement.
Containing costs means reducing personnel for groups to me since most of our other costs are more-or-less fixed, unless groups stop offering a range of benefits and shift that onto employees and partners (probably without a compensatory change in salary).
In the words of George Bailey, "Potter's not selling! Potter's buying!"