Everest Group offers solutions to help healthcare providers combat margin-crushing regulations, expenses, and risks in turbulent marketplace
A majority of healthcare providers in the United States suffered financial decline in 2017 amid the industry shift toward a value-based care system. Although many healthcare providers espouse a sound and logical strategy that focuses on people, process, and technology, few have been singing that song correctly, according to Everest Group.
In Everest Group’s recently published report, “Healthcare Provider Market: Addressing Issues Beyond Value-Based Care | What Healthcare Providers Need to Do to Address Myriad of Challenges,” the firm presents the challenges faced by healthcare providers in the market today and explains how most healthcare providers’ efforts to overcome those challenges have fallen short.
The key challenges facing healthcare providers include the following:
- Not only Obama-era regulations, such as MACRA, but also some GOP-proposed / -passed regulations such as Tax Cuts and Jobs Act (TCJA) are putting pressure on hospital margins. MACRA alone is likely to cause a decline in hospital Medicare reimbursement by at least US$250 billion by 2030.
- Massive investments into extremely expensive electronic health record (EHR) systems with little or no preparedness and vision have led to poor financial performance.
- Continuing fraud, lack of education, and the inability of the Centers for Medicare & Medicaid Services (CMS) to address these issues have resulted in doubling of improper payments in the past five years, with improper payments in 2016 reaching approximately US$102 billion.
- Claims denials totaled more than US$250 billion in 2016, highlighting the significance of payment risk for hospitals.
- Talent shortages, escalating training costs and a lack of collaboration are also among the key issues affecting health systems’ workforces.
To engineer a turnaround in this bleak trend, U.S. healthcare providers still need to focus their investments on people management, process improvement and technology enhancement—but in smarter ways than ever before, according to Everest Group. In particular, healthcare providers need to be more targeted in their digital transformation investments and bolder in their ecosystem development endeavors, relying heavily on partnerships to effect greater change.
“One very real and pressing concern of many providers is the large investment they have already made in large-scale EHR implementations and the limited resources remaining for new investments,” said Manu Aggarwal, practice director at Everest Group. “To identify the path forward, providers need to outline a targeted set of investments instead of another round of large ones. Specifically, investments in automation and analytics can yield solid, quick wins and pave the way for future engagements without the need for high capital outlay.”
“Another ‘must’ for providers is ushering in a much more collaborative culture,” added Aggarwal. “For example, providers need real-time data sharing with payers in order to provide enhanced patient experience. Providers also need strong partnerships with technology vendors and business process service providers to deliver the modern, technology-driven services that patients demand. And, finally, broader collaboration among the health network is required for improving patient outcomes and maximizing reimbursements.”
Additional examples of the solutions recommended by Everest Group in the report include the following:
- To address the talent shortage, hospitals should hire visiting physicians and nurses, link incentives with performance, and collaborate with specialists for training purposes to enhance people management.
- Technology investment is a must; however, hospitals also need to sort out issues regarding technology illiteracy and improper implementation in order to achieve a positive return on investment.
- Digital transformation does not end with EHR implementation; rather it involves continuous investments in other systems such as revenue cycle management (RCM) as well as tools for analytics and automation. Providers should set their sights on the ultimate objective: interoperable systems with end-to-end patient engagement.
- The uninsured population is expected to increase with the removal of the Individual Mandate; hence, healthcare providers need to strengthen front-end processes such as eligibility verification and pre-authorization to avoid claims denial at later stages.
***Download a complimentary abstract of the report. ***