Staying Relevant in the Midst of Health Care Reform: A Primer for Healthcare Executives

Dr. John McDonough, Professor of Public Health Practice at Harvard T.H. Chan School of Public Health, discusses the Affordable Care Act, health reform, and the changing health care landscape.

The passage of the Patient Protection and Affordable Care Act (ACA) has created numerous challenges—and numerous opportunities—for health care organizations in the United States, according to Professor John McDonough, DrPH, MPA, Director of the Center for Executive and Continuing Professional Education at the Harvard T.H. Chan School of Public Health, and author of Inside National Health Reform.

“We’re in the midst of the most exciting, dynamic, and scary time for American health care that we have ever experienced,” McDonough explains. “So much change is going on every day on so many levels,” he says, making it increasingly important that people in key health care leadership positions find new ways to stay relevant within the ever-evolving landscape.

The Impact of the ACA on Health Care Today

When the ACA was signed into law in 2010, it served as a catalyst for a broad series of reforms that have forever altered the delivery and focus of the nation’s health care system. Exactly how the transformation will continue to progress is still uncertain, depending at least in part on the fate of the upcoming 2016 presidential and congressional elections. Regardless of the outcome, McDonough says that the Affordable Care Act is having a profound impact on how organizations and their leaders get down to business. This means that leaders need to stay on top of the latest developments to redefine their organization’s operations and to prepare for what lies ahead. Otherwise, they—and their organizations—run a very real risk of being left behind.

With this in mind, McDonough describes five specific ways that reform efforts are now changing the course of US health care. This information can serve as a primer for health care executives to help position themselves and their organizations for success moving forward.

  • Hospitals are increasingly expected to provide high quality care for a growing number of people while keeping costs down. Health care delivery organizations in the United States have traditionally operated under fee-for-service arrangements that pay for specific services they provide while treating individuals and individual illnesses. Today the emphasis has swung to new payment models that emphasize value, such as bundled payments, thus requiring organizations to provide high quality health care services in the most cost-effective way. This shifting focus creates new tension for clinics, hospitals, and health systems already struggling to accommodate the growing number of people seeking care.As a result, institutional leaders must embrace new business models and strategies to improve coordination among clinical staff and ensure effective communication. They must find ways to incorporate the latest technology into daily operations to enhance the sharing of information, as well as to utilize best practices and evidence-based design improvements to achieve better outcomes, reduce hospital-acquired infections, and eliminate medical errors. For the first time ever, health care executives must become knowledgeable and skillful in population health improvement. They should also explore opportunities for affiliations, partnerships, and mergers, all with the ultimate goal of increasing access to high-quality care while streamlining operations.
  • There is a growing push to create a health care system where payment is tied directly to outcomes. The framework of incentives and penalties created by the ACA has refocused the health care industry away from the traditional system in which public and private insurers paid providers for treating ill patients. Instead, insurers are embracing arrangements that reward providers for keeping people healthy and well. This shift is having a significant impact on the way hospitals and health systems approach the business of health care. Specifically, it is putting the onus on health care executives to track and review the details of their organization’s daily operations and metrics, to see patterns, strengths, and weakness, McDonough says. For instance, before the ACA, most hospital executives had no idea what their hospital readmission rates were, which in 2010 hovered around 20 percent for Medicare patients within 30 days of being discharged. McDonough points out that now, a readmission reduction program established through the ACA provides a strong financial incentive for hospitals to prevent patients from being readmitted. This requires today’s leaders to make every effort to comply with the latest guidelines and to work with their staff to find new ways to treat high-risk patients and manage their transitions from inpatient care back to the community while preventing them from having a relapse and needing to be readmitted.In addition, organizational leaders are being challenged to see their facilities through the eyes of patients. This is because patients now rate their experiences during a hospital stay through the Hospital Consumer Assessment of Healthcare Providers and Systems(HCAHPS), which tracks patient satisfaction on key measures and ties the ratings directly to reimbursements. This creates a strong incentive for leaders to ensure that their facilities meet, or exceed, customer expectations in key areas, including communication, cleanliness, timeliness, quiet, and transitions of care.
  • The focus for health care organizations is shifting from treating patients when they’re ill to taking a more proactive role in trying to keep people well. This new concentration on wellness is part of a new trend called population health, which is an approach that takes into account the outcomes of a group of patients, rather than individuals. Such a focus on the broader health of a group or population is changing the way that health care providers serve their patients. This new focus also requires health care executives to think more like insurers, using epidemiology to see the risk and cost benefits of serving populations and taking a preventative approach to health. Health care leaders must look to tools like predictive analytics to understand specific populations and diagnoses and to recognize how best to use this information proactively to help prevent complications for patients at high risk. This translates to better managed care for high-risk patients and those living with chronic illnesses.
  • Hospitals are encouraged to try new models for coordinating care, such as creating Accountable Care Organizations (ACOs). Accountable Care Organizations or ACOs are vertically integrated organizations of key players, including hospitals, physician groups, home health care workers, pharmacists, and more, who come together to improve the patient experience of care, lower costs, and improve the health of different groups. ACOs work by rewarding physicians for keeping costs down; by incentivizing physicians in this way, they become active participants in the cost-reduction goal of the organization. ACOs also provide clinicians and health executives with the data they need to see patterns, evaluate quality of care, and improve outcomes.
  • ACOs are unique in that they operate mostly within the Medicare space, although they are also now spreading to other populations,” McDonough says. Moving forward, McDonough believes all health care leaders will need to invest the time in developing ACOs, or similar systems, to streamline the delivery of care and connect providers in the most effective ways around the patient. Such goals require establishing new channels for teamwork and communication and creating multidisciplinary teams around the goal of caring for patients and better meeting their needs in a more proactive way.
  • Organizations must think beyond the acute care setting to find new ways to deliver care out in the community. Since health care today is less about individual care and more about how to keep an entire population well, most experts agree that it makes sense to look for new ways to provide services out in the community, meeting people in the places where they live and work. In fact, the growing focus on wellness translates easily into providing support and resources to help patients manage chronic conditions more effectively in their own homes or through ambulatory care options. The focus, of course, is on prevention—keeping patients well and avoiding illness—thereby preventing the need for an inpatient stay and reducing the risk of costly complications that could occur. Advances in technology, coupled with new models of coordinated care, make it increasingly convenient for people to access care from the comfort of their own homes. This means that health care and public health leaders need to be proactive in looking to communities and identifying local partners that can help carry health care services and messages to new settings. They must also understand how to use technology in the most effective way to help people access care remotely.

Keeping an Eye on the Future

With all of these changes, and so many others that are currently underway, McDonough says that the message is clear for health executives: they must invest the time and attention necessary to stay abreast of the rapidly changing marketplace. They must also have the insight to understand what the changes mean within the context of their own organizations and their target populations.

This makes it essential that leaders continue to develop new skill sets and gain a deeper understanding of all of the forces affecting health care, without losing sight of the big picture. Institutional leaders also need to move their organizations toward what the Institute for Healthcare Improvement (IHI) calls the triple aim. This refers to three main goals that must underlie all health care delivery, both now and moving forward. These goals are improving the patient experience, improving the health of populations, and reducing per-capita health care expenditures.

Putting It Into Perspective

As if all this weren’t enough, health care executives must also keep an eye to the future, remaining agile so they can respond to the changes that come over time. “It’s impossible to talk about health reform without talking about the next presidential election. The next president is going to be doing some significant course corrections to health reform” regardless of what party the person represents, McDonough says. In the meantime, he suggests that health care leaders follow the ongoing developments in health care reform through resources like the websites of the Henry J. Kaiser Family Foundation and the Commonwealth Fund, which offer regular updates and in-depth policy analysis. They can also benefit from seeking out ongoing training courses or programs that bring together people working on the front lines of health care with policy experts, thought leaders, and government representatives in order to broaden their own perspectives on what health care reform means and where it will lead over the next decade and beyond.