At the start of a year, it’s useful for executives to take some time to consider the macro forces that can affect their organizations and the decisions they will need to make. Managed Healthcare Executive undertook its annual survey of hundreds of executives “at health systems, health plans, pharmacy benefit organizations, and more,” asking what they thought were the biggest challenges they faced. Here are some of the answers.
Transitioning to value-based payment
Although pressure to shift away from a services-based fee model isn’t new – HMOs, for example, have used capitation and other approaches for decades – it has taken on increased force under regulation and fiscal pressures. A full 20 percent of the organizations represented in the survey said they had not even started moving to value-based payment systems that are already on their way to dominate the industry. Only 23 percent said that most of their operations focused on value. Many organizations will have to ramp up their activity on this front.
Turning data into action
It can be difficult for any type of business to move toward a data-driven approach to management. A proper analysis of data can help a healthcare provider achieve cost reductions and service improvement. Data can aid the transition to value-based payment, as an example. But organizations have to learn how to collect and use data.
Managing rising pharmaceutical costs
Pharmaceuticals have become instrumental in modern healthcare. However, the U.S. is unusual in its lack of price controls. Costs continue to rise far more than in many other parts of the world. New types of drugs in the development pipeline will only aggravate the situation. However, there is a lot of disagreement among healthcare executives about the best way to handle the situation. Organizations may have to consider multiple responses, including utilization management, changes in pharmacy plans, and even a push for government action.
Consumers are increasingly better informed about their health options and potential treatments. Providers will have to take different approaches to patient expectations and to customer segmentation. Some of the actions executives are taking include providing more financial counseling, increasing cost transparency, expanding consumer relationship management, and increasing outreach initiatives. Those who do not become more sophisticated in dealing with consumers may find that people turn to other providers.
Every industry deals with the issue of consolidation. In healthcare it may have taken longer, but it is having its effect. About 54 percent of executives thought that the process would lead to higher overall costs while a third thought that costs would drop and the remainder said there would be no impact. In the favor of consolidation is the argument for greater buying power and scale of operations. But economy solely from bulk is harder to achieve that it sounds, particularly as growth comes through merger and acquisition activity. Those involved with consolidation need to consider what is actually necessary to improve efficiency, while those outside the sphere have to look at how they can and will compete with much larger entities.
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