Tuesday, May 14, 2013

Best Opportunities & Biggest Threats in Healthcare

Best Opportunities & Biggest Threats in Healthcare

At the Becker's Hospital Review Annual Meeting in Chicago on May 10, a panel of health system executives discussed the greatest opportunities and biggest threats ahead for the healthcare industry. 

Barry Arbuckle, PhD, president and CEO of MemorialCare Health System based in Fountain Valley, Calif.; Daniel Slipkovich, CEO of Franklin, Tenn.-based Capella Healthcare; Sandra Bruce, president and CFO of Chicago-based Presence Health; and Stephen Bonner, president and CEO of Cancer Treatment Centers of America based in Schaumburg, Ill., sat on the panel, moderated by Fox News anchor and former White House correspondent Bret Baier.

Here is an edited transcript of the panelists' discussion:

Bret Baier: What opportunities do you see in the healthcare industry as we move into the first year of health reform?

Stephen Bonner: We need to bring more intelligence into healthcare. We're now moving into a phase of consumers, regardless of what might be set by federal policy, becoming more engaged in their healthcare with more health savings and savvier in how they buy their care. The health reform law and the exchanges are rapidly accelerating that whole structure. It's an unintended consequence, but we're going to end up with more engaged consumers. If we listen, they'll help us deliver cheaper and better care without needing to funnel money through the feds. There's a lot left to be determined, but we think [the U.S. healthcare system] is really missing a major opportunity. We have this incredible capability and capacity, but there's a disconnect between desire and what's available,  and that's not a U.S. phenomenon. Why shouldn't we flip it around and use our excess capacity and invite people to come to the U.S. and improve on that?

Sandy Bruce: Only God knows. We're the largest Medicaid provider in the state, and the exchanges are a big worry for us.  Lots of people will get coverage, but then what happens when they come into our doors without realizing they'll still owe 30 percent of the bill? That'll create a financial burden on providers, if we're not careful. Most of us have grown up building hospitals and filling beds, but that's clearly changed. I think the real opportunities for healthcare lie in the changing revenue streams in different care settings and for different metrics of care. I think we also have a huge opportunity to reduce variation in healthcare. Within my own system of 12 hospitals, we think we could save between 20 and 40 percent by reducing clinical variations among our physicians. [Electronic health records], although they're expensive, can help us achieve that. Another piece I'm particularly concerned about is that a quarter of Americans could be covered by Medicaid in a year. We are oblgated to figure out a way to deliver care to them at a very different cost structure. It can't look like what we've been doing.

Barry Arbuckle, PhD: The upcoming changes are mindboggling in significance. I'm a big fan of complete connectivity and seamless connection to population health. You're fooling yourself if you think you can do population health or keep physicians integrated without it. There are also lots of interesting and creative partnerships being formed between providers that provide benefits of scale but fall short of a full transaction.

Dan Slipkovich: We're repeating a lot of what we did in the 1990s. We're expanding outside our walls and buying other entities, etc., but I'd tell you it's going to stick this time. In the '90s, we simply didn't have the technology to follow through on the initiatives of the time. The trouble for us now is going to be meeting the influx of new patients, many of whom will be covered by Medicaid. Many say hospitals will benefit from more insured patients, but it's going to be a shift to re-spending the same dollar amount on a much broader population. Access is also a big issue. Our emergency department services grew 10 percent last year, but that's because so many patients didn't have anywhere else to go.

Mr. Baier: What looming threats have been keeping you up at night?

Dr. Arbuckle: There are solvency concerns about the Medicaid program, as well as Medicare so long as politicians keep using it as their piggy bank to solve other budget problems. The solution, I believe, is in managed care. It's the only thing that can cause those programs to survive, but it takes infrastructure and experience. Everything is harkening back to the '90s, but I truly believe we're doing it different this time. We have better systems, better technology, even better intentions. Before it was all about money, but now it's survival. We have better regulation now, too. We might actually be successful this time.

Mr. Bonner: The biggest threat is misleading for what we're trying to create and what it'll take to create it. Healthcare has become so politicized, but can we really engage people in the discussions about how to do healthcare better? I think we're failing to engage in the right conversations. We need to connect the will to drive quality to where it belongs and cost what it ought to cost. There's a lack of will to tackle really tough systemic issues, such as primary care. Can we tackle malpractice in this country? Can we tackle transparency? We equip people with the kind of information that JD Power & Associates give to keep them from buying crummy products, but not in healthcare. How do we pretend to be a consumer-driven industry if we can't do that? The greatest clinical opportunities are through innovations in oncology, finding the best balance between safety, efficacy and speed.The cost we can take out of the system and the human cost we can take out in avoiding side effects is astounding.

Ms. Bruce: We believe there's probably overcapacity in hospitals today, and acute care will shrink. Everything's moving into medical home office ambulatory settings. What will become of the capital investments we've all made in patient towers and all the rest over the years. We're struggling on where to place the bets on where the industry is going. We're also starting to worry that our biggest competitor is no longer other large hospital systems but Walgreens and the retail clinics. We're still protecting our big-box assets, while others are coming in who'll get into the new industry better.

Mr. Baier:
 What do you predict other systems will begin doing to adapt to the changing landscape of healthcare?

Dr. Arbuckle: 
I have a hard time predicting what's going to happen. There will be changes in resource utilization without a doubt. At the same time, there's a burgeoning population of seniors who will utilize healthcare resources at six times that of the commercial population. We've also got  an obesity epidemic in this country and all the problems that causes. I believe we'll see fewer beds in larger markets as we shift to more population health management in the ambulatory setting. Freestanding, non-profit hospitals historically have had an amazing ability to lose money and hang on for years, and this time, I worry they may not. Now is the time to be exploring partnerships and transaction opportunities of all kinds, not when you're desperate. There's a major problem with staffing resources as well. I have hundreds of open positions that I can't fill, even in this unemployment market. Right now we've got excess capacity in the marketplace, consolidation will drive that excess out. I firmly believe over the next five to eight years, you'll see 500 fewer hospitals in this country. 

Ms. Bruce: The framework of our competition is changing. Consumers are changing rapidly too. If we connect with them, learn what they value and how to deliver that to them, we'll still fill our patient towers, but we don't need to make people come to the big boxes to get their height and weight. There's no need for them to come in if their iPhone can send a high-resolution image of their lesion to a physician who can diagnose and prescribe care remotely. Customers know that, so how can we engage them, and will we get paid to deliver that way? One of my doctors has been doing just that, but hasn't told people about it because he knew it wouldn't produce any RVUs. Johns Hopkins is piloting a stay-home admission model, which is cheaper and minimizes infection risk, but it still has to be approved by payors.

Dr. Arbuckle: I think we'll see a resurrection of worksite clinics, but the only way it can work economically is if there are aligned incentives. We know there is a lot of waste in the healthcare system. I recently learned I have an allergy to beestings. I now get allergy shots twice each week. For those who'd have to leave work to travel to a physician's clinic, wait to be seen, handle the billing and return, that's two hours of work time lost, and twice  per week. The productivity loss is crazy for employers! That's a perfect candidate for a worksite clinic. Obviously we've got a lot of changes and challenges, and for us it starts with people. Everyone should engage their boards and physicians to get the people side  of this right. Beyond that, it's easy to get caught up in the problem of the day. Despite what happens with Medicaid, we know what we have to do — stay very focused.

Mr. Bonner: The fundamental here is to stay clear on our fundamental purpose and who we need to serve. Healthcare is rightfully under the spotlight. The wisdom of the customer coupled with the wisdom of medicine and employers brings us all to a more efficient, more effective delivery of care. We know waiting in hospitals builds stress, wastes time for us and for employers, so last year we took 150,000 hours of patient wait time out of our process. Listen to customers. There's a great future in healthcare in America. A lot of [healthcare executives] have one foot on the dock and one foot in the boat. Call your shots, be courageous and increase your appetite for risk.

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