Until the uncertainty over health care reform in Washington, D.C. is resolved, most health system leaders are “hunkering down” on focusing only on “no regret” strategies, according to a survey by Miami-based BDC Advisors.
The survey’s findings, based on conversations with a dozen senior executives from major health systems and academic medical centers, was discussed in the report “Healthcare Strategy in a Time of Uncertainty,” published in the May-June issue of Healthcare Financial Management Association's Leadership magazine.
Most of the executives say they are not significantly expanding their budgets, including holding off on major capital improvements, until the midterm elections next year, according to the study’s authors, Aamer Mumtaz, Dr. Alan London and Dr. David Fairchild.
Instead they are currently focusing on one executive called “no regret” strategies to address “fundamental economic forces” -- rising costs, the continued move toward consumer-driven health care, the shift from inpatient to outpatient care, and the growth of population health management and other forms of value-based payment mechanisms.
Such strategies including achieving scale through partnerships and alliances; commercial market growth; continued focus on Medicare Advantage; aggressive cost control; partnerships with health plans to share more risk; and building the clinical network.
Moreover, until there is more certainty concerning health care reform, there could be a slowdown of the momentum created by the Affordable Care Act towards care coordination and value-based care initiatives, the authors wrote.
No matter what happens in Washington, D.C., most of the executives surveyed believe the same challenges that faced them in 2011 -- before the ACA was implemented -- still exist today: cost growth, concerns over quality and value of care and the continued struggled to break even on providing treatment via government programs.
The leaders say they will continue to improve the quality and value of care through clinical integration and care coordination, and that scale will become even more important as systems look for ways to reduce the per unit cost of care.
The main engine of growth for providers will continue to be commercial insurance, while the most attractive government program financially for them will continue to be Medicare Advantage. Medicaid and the ACA marketplaces are “wild cards,” and whatever happens to them will be felt disproportionately by systems serving high numbers of underprivileged patients, including systems operating in rural areas.
Overall, though, health care reform is driven primarily by market forces as opposed to legislative initiatives, the executives say.
“As one West Coast executive told us, ‘The challenges facing health care are more economic than political,’” the authors write.