Failing to Act Now May Put Your Healthcare System at Risk

At a recent national conference, I heard top executives from some of the largest healthcare systems in the country discuss their business models and their healthcare delivery transformation during the past several years. We can count on the Geisingers and the Mayos, as well as other large systems, to lead the way, but I was struck by the extent of their progress towards offering value and outcomes to patients rather than the traditional models present today in many systems. They are doing, quite successfully, what many smaller systems are only beginning to debate. They are proving that new models can deliver better patient care and still be profitable.

These presentations made me take notice for another reason. Many organizations are way behind. Many systems across the country are making steady progress, but many others are not, and it seems to be a regional, and sometimes local, disparity.

I know I’ve said it before, but I must repeat this warning – if you fail to act or delay too long, you put your entire system at risk of becoming irrelevant. If you fail to design an organization that can capitalize on and bridge the gap to the new reimbursement models, your future success is limited.  And you don’t have much longer to act, 2017 is the beginning of many programs geared towards value and outcomes.

I don’t want to highlight the negative, but I believe that taking appropriate action is essential. Building a healthy, profitable, caring organization is possible – and it’s necessary.  On the bright side, you can benefit from an effective data analytics platform, maximizing the use of your assets, and by engaging patients, physicians and other healthcare providers.

The HORNE healthcare team has been writing blogs during the past two months about the changes healthcare organizations must make to their business models in order to succeed. We will continue to write about developing a more robust cost-accounting system, getting the most from data analytics with actionable data, finding the optimal payer mix, and other financial topics, but we will also discuss the human element. I’m concerned about the pressures medical professionals are feeling because of the foundational changes to the healthcare system.

I think there are several keys to transforming your organization in order for you to remain viable and competitive. They are:

  • Improve outcomes for all patients with appropriate care in the appropriate setting, especially the patients who are “heavy users” of your facilities.
  • Recognize collecting and analyzing specific types of data is necessary to improving quality outcomes – not collecting more data, but collecting and interpreting the data that informs about critical decisions.
  • Realign physician incentives by designing appropriate compensation models and enlist participation from physician leaders.
  • Establish a comprehensive cost accounting program as an element of the new business model.
  • Determine accurate Return On Investment to quantify financial investment in healthcare delivery improvement.

Systems cannot change their operational models without leadership throughout the enterprise. Administrators, medical professionals and physicians at the highest levels of the organization must have input. They also can’t change without buy-in from those involved in patient care, and I would make the argument that everyone is involved in patient care. People are central to a healthcare model – not systems.

Systems should support caregivers and patients alike. As accountants, we can produce models that tell you what procedures will create the most revenue. We can tell you where your expense dollars are being spent. We can even tell you who uses your services most often and which caregivers are most efficient. And all that information is vital to your mission. Where our experience really makes a difference, however, is our ability to help you track the disparities of health within your community and help design the elements of care that foster a healthier community. We can help you decide where your emphasis should be and where you can be most effective.

You have a big job to do, and you don’t have time to waste. You can refer to large healthcare organizations as models for inspiration, but you must begin to transform the healthcare system where you are. Certainly many organizations aren’t where they want to be. We can see imperfections everywhere, but our job is to recognize those imperfections and learn and grow from them by finding ways to improve them. Ultimately, the health of every community in this country depends on the success of transformed health care models.


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Topics: Healthcare Data, Affordable Care Act Summary, Cost Accounting

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