1 healthcare trends and implications 2010–2015 futurescan
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Healthcare Trends and Implications2010–2015
Futurescan
FuturescanCo-sponsored by:• Society for Healthcare Strategy and Market
Development of the American Hospital Association • American College of Healthcare Executives• With Support From Thomson Reuters and VHA Inc.
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American College of Healthcare Executives
• Professional society of more than 30,000 healthcare executives—Leaders Who Care
• Board certification in healthcare management as ACHE Fellows (FACHE®)
• Foremost continuing educator for the field• Leading healthcare management publications:
– Health Administration Press books– Journal of Healthcare Management, Frontiers of Health
Services Management and Healthcare Executive• Fulfilling our vision to be the premier professional
society for healthcare executives dedicated to improving healthcare delivery
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Society for Healthcare Strategy and Market Development
• Personal membership group of the American Hospital Association
• Serves more than 4,400 healthcare planning, marketing, and public relations/communications professionals
• Committed to helping members meet the future with more knowledge and opportunity as their organizations work to improve health status and quality of life in their communities
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Futurescan Contributing Authors• Donald W. Seymour, Executive Editor• Paul J. Feldstein, The Economy: For Hospitals, an Uncertain Outlook• Stuart H. Altman, Christopher P. Tompkins, Stanley Wallack and Michael
Doonan, Payment: New Approaches for Paying Providers Will Change the Organization of Healthcare Services
• Stephen M. Shortell, Delivery System Reform: Accountable Care Organizations and Patient-Centered Medical Homes
• William F. Jessee, Physicians: Transitioning from Alignment to Integration• Eric J. Topol, Genomic Medicine: Opening the Door to Individualized Care• Jeff Goldsmith, Healthcare IT’s Unfulfilled Promise: What We’ve Got Here is
Failure to Communicate• Lynn Unruh, Nursing: Toward a Sustainable Nursing Workforce• Bob Eisenman, The Environment: The Greening of Healthcare and Hospitals
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“Even small healthcare institutions are complex, barely manageable places. . . Large healthcare institutions may be the most complex organizations in human history.”
Peter Drucker
Post-Capitalist Society. New York, Harper and Row, 1993
Futurescan in Context
• These trends can transform the future
• Healthcare reform legislation introduces uncertainty and opportunity
• Individual organizations must determine relevance, timing and context
(c) 2010 – Society for Healthcare Strategy and Market Development (SHSMD) of the American Hospital Association
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Using Futurescan
• Assess local trends, review assumptions, project implications
• Distinguish operational from strategic implications
• Determine key strategic Issues
• Consider timing
• Exercise common sense and discipline
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The Economy: For Hospitals, an Uncertain Outlook
The Economy: Skyrocketing Costs
Even with reform, healthcare costs will continue to outpace inflation, threatening hospital margins.• Adopt strategic initiatives such as LEAN that are
designed to reduce costs and improve efficiency.• Incentivize employees at all levels to identify cost-
saving measures and strategies.• Intensify fundraising efforts.
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The Economy: Medicare Challenges
Deficits in the Medicare Hospital Insurance Trust Fund will intensify as the Baby Boomers begin to qualify for Medicare.
• Look for new ways to cut costs and reduce unnecessary care.• Migrate care to less costly outpatient settings.• Advocate for reasonable and fair Medicare reimbursement rates.
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The Economy: Fewer Private Pay Patients With or without reform, the number of privately insured
patients will decline.• Aggressively market to private pay patients in your service area.• Develop and promote centers of excellence that meet community needs.• Be an active political advocate for fair and reasonable updates for
Medicare and Medicaid coverage.
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The Economy: More Bad Debt
Bad debt will increase as private insurers increase co-pays and deductibles in order to soften premium increases.• Negotiate contracts with insurers carefully, as they will
be attempting to aggressively cut costs.• Anticipate increased pressures for price and cost
transparency.
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The Economy: Physician Competition Physicians will continue to shift lucrative
services to outpatient settings or facilities in which they have an ownership stake.• Look for ways to engage physicians with your
organization and build their loyalty.• Develop strategies that financially integrate physician
and hospital services.• When appropriate, joint venture with local physicians
to develop specialized services.
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The Economy: The Outpatient Shift Outpatient services will continue to grow
more rapidly than inpatient or other hospital services. • Invest in outpatient treatment and diagnostic services,
creating joint ventures with physicians when appropriate.
• Design new or renovated space to accommodate a greater outpatient use.
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Payment:New Approaches for
Paying Providers
Payment: Performance and Quality
Payment based on quality and efficiency will be routine, and quality “bonuses” will be drawn from annual payment updates.• Promote a culture that focuses on quality
improvement and patient safety.• Make sure that information systems can produce valid
and reliable quality and outcome indicators.• Work with physician leadership to promote the use of
evidence-based guidelines throughout the organization.
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Payment: Global Payment
CMS will expand the number of demonstration projects that bundle payments for physicians and hospitals.• Dialogue with physicians about the benefits of
coordinating patient care under this system.• Work with physician leadership to develop methods of
sharing reimbursement for all types of patients.• Be prepared to assume the majority of the financial
risk until global payment mechanisms become routine.
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Payment: Renewed Importance for Primary Care
New payment and delivery models will be based on a constellation of care that will be coordinated by primary care physicians.• Develop relationships with primary care physicians
and groups.• Be an advocate for payment reform that provides
greater incentives for primary care physicians.
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Payment: The End of Fee for Service? Reimbursement will increasingly rely on
payment mechanisms that promote coordinated, cost-effective care and less on FFS payments.• Strengthen relationships with physicians and develop
partnerships for providing key services.• Educate the medical staff on the implications of the
new reimbursement systems.• Design information systems that are flexible and can
adequately capture cost and quality information.
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Delivery System Reform:
Accountable Care Organizations and
Medical Homes
Reform:EHRs Are Not an Option EHRs will become a necessary
component for a delivery system that can provide coordinated, cost-effective care.• Have a strategy for EHR implementation, expansion
or update.• Make sure your organization receives its share of
stimulus funds for EHR adoption and implementation.• Select or adopt an EHR that is interoperable with
physician practices and other components of the delivery system.
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Reform: More Sophisticated Measures With advances in performance
measurement, organizations will need to be transparent and accountable.• Invest in data systems that provide valid and reliable
measures of performance.• Use performance data to foster quality improvement
efforts.• In the interest of transparency, share select
information with key stakeholders and the general public.
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Reform: Medical Homes Federal funding will promote the development
of patient-centered medical homes as a reform strategy. • Establish partnerships with primary care physicians who are key
to medical homes.• Use the Physician Practice Connections-Patient-Centered
Medical Home standards promoted by the National Center for Quality Assurance to guide the development of medical homes.
• Emphasize interdisciplinary teamwork throughout the organization, providing team training if appropriate.
• Incorporate disease management and prevention efforts into community outreach activities.
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Reform: Accountable Care Organizations Accountable Care Organizations (ACOs)
will develop in response to real and anticipated reimbursement changes.
• Strengthen relationships with physicians.• Modify or invest in information systems that will
accurately measure performance and predict future costs.
• Work with physician leaders to promote evidence-based practices and reduce overuse.
• Focus on measurements that relate to the organization’s strategic priorities.
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Reform: Effectiveness Research Care standards based on comparative
effectiveness research will be promoted as the “gold standard.”• Continuously monitor clinical and health services
research literature for new trends and findings.• Monitor the political environment for proposed
changes in reimbursement based on research findings.
• Share new standards with medical staff and members of the governing board.
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Physicians: Transitioning From
Alignment to Integration
Physicians: New Lifestyle Expectations A younger physician work force,
comprised of significantly more women, will demand flexible scheduling for more personal time.• Create more full-time employment opportunities, with
regular hours, for physicians.• Create flexible opportunities for physicians who do not
want full-time employment due to family responsibilities.
• When recruiting physicians, emphasize social as well as professional opportunities.
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Physicians: The End of Solo Practice? Physicians are leaving solo and two-
person practices to join groups or seek full-time salaried positions.• Establish medical leadership positions that will
promote efficiency and quality.• Offer management services that will benefit small
practices and develop loyalty to the institution.• Develop programs and services targeting new and
growing physician groups and IPAs.
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Physicians: Shifting Practice Patterns Increasing numbers of physicians will limit
their scope of practice so they will be either hospital-based or office-based. • Segment integration strategies to account for the
differences between these two groups.• Offer billing, collection and other Management
Service Organization services to office-based physicians.
• Develop leadership roles for hospital-based physicians.
• Develop joint ventures with entrepreneurial specialists.
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Physicians: Primary Care Shortages At a time when reform initiatives
emphasize the role of primary care, most communities will experience serious shortages of primary care physicians.• Develop alignments with primary care practices.• Create leadership roles for primary care physicians.• Intensify efforts to recruit primary care physicians.• Advocate for higher federal and state reimbursements
for primary care.
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Physicians: Partners in Risk Economic and demographic trends, spiraling
costs, and expected changes in payment structure will create pressures for increased hospital-physician integration. Physicians and hospitals will share risk.• Modify information systems that allow physicians
access to patient information remotely, 24/7.• Create reward structures for physicians who have
good patient outcomes and minimize costs.• Work with medical leadership to promote evidence-
based practices within the institution.
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Genomic Medicine: Opening the Door to
Individualized Healthcare
Genomics: A Gold Rush of Discovery Genetic markers of common diseases are
being discovered at a pace never seen before in biomedical research.• Strategic planning processes should focus on the
impacts of these new discoveries.• Help staff and board members stay up-to-date on
fast-breaking genetic discoveries.• Consider adding service lines related to genetic
testing and counseling.
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Genomics: Drug Effectiveness Genetic sequencing will determine
whether an individual will be helped by drug therapies previously considered “standard.”• Assign staff to monitor current trends in
pharmacogenetic interactions.• Update the laboratory so it can perform rapid genetic
testing prior to the administration of selected drugs.• Alternatively, develop a relationship with a reputable
central lab for quick test turnaround.
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Genomics: Prediction and Prevention Genomic screening will make medicine more
predictive and preventive, and it will be possible to diagnose and treat illness in younger people.• Anticipate further shifts from inpatient to outpatient care.• Develop expertise in genetic counseling that incorporates
advice on the environmental risks associated with common diseases.
• Be prepared to respond to the ethical issues surrounding genetic screening.
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Genomics: New Competitors Private companies are marketing directly
to consumers and offering relatively low-cost genetic screening for a variety of diseases. Consumers are willing to pay out of pocket.• Be prepared to deal with patients who present with a
“genetic profile.”• Consider offering hospital-based genetic testing
programs as a part of an overall preventive/wellness strategy.
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Genomics: Individualized Healthcare If the unprecedented rate of discovery in
genomic medicine continues, diagnostic and treatment procedures tailored to individual patients are on the horizon.• Consider developing a service line based on genomic
medicine.• Prepare for an accelerated shift to outpatient
diagnosis and treatment.• Be prepared to educate the public on the benefits and
limitations of genomic medicine.
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Healthcare IT’s Unfulfilled Promise
Healthcare IT: Unfulfilled Promises To date, information systems in healthcare
have not fulfilled their promise. Instead, they have added cost and provider burden.
• Provide better education for staff.• Make more demands on vendors and outline clear
expectations for ease of use. • Pursue systems and updates that transcend silos
between departments and processes and promote interoperability.
• Develop a fully automated revenue cycle for significant cost savings.
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Healthcare IT: Horizontal Communication Instant messaging, texting and online
discussion groups are preferred methods of problem solving and communication for younger physicians and managers.• Build instant messaging and online communities into
the IT infrastructure.• Make sure the interface is “Facebook friendly.”• Provide wireless Internet access throughout the
organization.
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Healthcare IT: Move it Online Online sites will play a key role in helping
people monitor their health and in providing health education.• Maintain a Web site that is engaging and easy to
navigate.• Develop a strategy for the use of social media in
promoting your organization.• Provide links to reputable and reliable health
information sites.• Use the Web portal to provide online interventions in
nutritional planning, smoking cessation and support for other chronic conditions.
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Healthcare IT: New Communication Lines Future patients will expect to communicate
with their physicians and health providers online and in real time.• Shift appointment reminders and pre-admission
processes to the organization’s Web site. • Create instant-message systems for patient updates.• Provide wireless Internet access throughout the
organization.
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Healthcare IT: PHR Evolution Future Personal Health Records will be
truly personal. They will be worn or become part of an individual.
• Keep abreast of the latest technology trends.• Build trust with patients that their health information
is confidential and secure.• Take advantage of federal dollars in the stimulus
package to upgrade or install EHRs.• Keep information systems up-to-date.
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Nursing: Toward a Sustainable Nursing Work Force
Nursing: Complacency Is Dangerous The nursing shortage is on hold, but once
recovery from the current recession is complete, it will return with a vengeance.• Partner with local nursing schools to provide clinical
placements for students and employment opportunities for graduates.
• Avoid cutbacks in the nursing staff whenever possible.• Initiate strategies to retain the current nursing staff that
focus on streamlining the work environment and reassigning non-value-added activities.
• Support legislation that expands nursing education.
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Nursing: An Aging Work Force
Despite younger nurses entering the work force, the proportion of older RNs in the work force will increase for several more years.• Improve the ergonomic design of the physical
workplace.• Use LEAN concepts to reduce unnecessary and
redundant steps on nursing units.• Accommodate flexible and part-time schedules for
experienced nurses.
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Nursing: An International Work Force The need for foreign-born nurses to
complement the native-born work force will increase, despite some concerns about communication issues.• Support research that investigates the relationship
between communication skills and patient safety.• When appropriate, provide training in communication
skills for foreign-born nurses.• Provide cultural competency training for foreign-born
nurses and the staff who work with them.
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Nursing: Fertile Ground for Labor Unions The newly-formed National Nurses Union
will intensify efforts to unionize nurses nationwide.• Educate leaders on the various tactics and strategies
employed by unions in healthcare facilities.• Engage nursing leadership in activities designed to
improve the satisfaction of the nursing staff.• Take the high ground if dealing with unions. Answer
questions directly and honestly.
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Nursing: Mandated Staffing Ratios More states will consider legislating
mandatory nurse staffing ratios.• Be prepared to articulate and justify current staffing
processes. Involve nursing leadership.• Restructure the care processes so nursing performs
fewer non-value-added activities.• In the interest of patient safety, set limits on
mandatory overtime for nurses.
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The Environment: The Greening of Healthcare
and Hospitals
Environment: Going Green Hospitals will be actively involved in
“green” initiatives in an attempt to reduce their environmental impact and carbon footprint. • Limit vendors to those with environmental programs.• Participate in organizations that promote sustainability
and safety.• Monitor legislative activity to determine if federal
funds become available for energy improvements.
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Environment: Health and Safety Hazards Hospitals will be required to disclose, to
the general public as well as employees and patients, any incidents that adversely impact the environment or impose health or safety hazards.• Give full support to safety officers and others
responsible for environmental health and safety.• Audit your organization periodically to identify and
reduce risks.• Make the health and safety of patients, staff and the
community served a strategic priority.
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Environment: Recycle Equipment
Hospitals will be expected to recycle medical equipment that is no longer used by giving it to needy countries.
• Develop partnerships with hospitals in less developed countries that will accept the equipment.
• Include equipment donations in community benefit reports and in other reports to the community.
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Environment: Construction Issues Construction or renovation projects will
use design principles that promote safety and reduce stress.• Select architects and design teams that understand
the impact of physical design on human behavior and patient safety.
• Work towards LEED accreditation for all or part of the organization.
• Establish building standards that emphasize safety and sustainability.
• Create a culture of safety within the organization.
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“‘We will do everything for everybody’ has never been a viable value proposition for any successful business model that we know of—and yet that’s the value proposition … of general hospitals.”
Clayton M. Christensen, Jerome H. Grossman, MD, and Jason Hwang, MD
The Innovator’s Prescription: A Disruptive Solution for Health Care (2009)
FuturescanThis presentation was adapted by Mary Stefl, PhD, Chair, Health Care Administration, Trinity University, from Futurescan: Healthcare Trends and Implications 2010-2015.
Futurescan 2010 is available for purchase from Health Administration Press. Single copies (order code 2155) are $45. Packages of 15 copies (order code 2155BND) are available for a discounted price of $395. Order online at ache.org/HAP or call the ACHE/HAP Order Fulfillment Center at (301) 362-6905.
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Healthcare Trends and Implications2010–2015
Futurescan