As we find ourselves at the mid-point of the year, there has been a myriad of developments in the health care industry, including the imminent debate on the future of the Affordable Care Act (ACA). Since there seems to be no shortage of industry storylines, let’s look at five key healthcare topics to keep an eye on through the rest of 2017.
Mergers & Acquisitions. Over the past few years, one of the most surprising trends in the healthcare industry is the number of mergers and acquisitions. Since 2015 there have been 214 hospital transactions of which almost 75% involving nonprofit hospital buyers. The healthcare market volatility is driving much of the action as more organizations struggle to maintain financial viability in the rapidly evolving landscape. It bears watching to see if this trend continues into 2018 or if changes in legislation slow the volatility.
Value-based Payment Models. Hospitals and other healthcare organizations continue to transition to value-based care delivery. Nationwide, almost 50% of reimbursements are related to some form of value metric. The challenge has proven to be in the conversion over to these more complex mechanisms for payment, even though the intended results are reducing administrative costs and the costs of care. Surprisingly in a 2015 report, the Government Accountability Office concluded that value-based programs had minimal impact on Medicare payments and no change in the quality of care.
Accountable Care Organizations. ACOs are a byproduct of the Affordable Care Act and are intended to be an integrated care model reducing costs while improving the quality of care. As of 2016, there were close to 1,000 ACOs in the United States. According to a Centers for Medicare & Medicaid Services report, coordinated care in the ACO environment has generated financial savings and improved care for Medicare beneficiaries. The report also revealed that ACOs perform better over time as processes and collaborations are developed and refined.
Physician Shortages. The Association of American Medical Colleges estimates that by 2025 there may be a shortage of up to 90,000 physicians in the U.S., with up to 35,000 being in primary care. Factors contributing to the shortage are the numbers of physicians who are leaving their practice due to retirement, dissatisfaction with unwieldy legislation, and burnout. Nearly 50% of all physicians report frequent feelings of burnout with many attributing part of their stress to burdensome Electronic Health Records and ICD-10 requirements taking time away from patient care.
Hospital Acquired Conditions. The Department of Health and Human Services (HHS) reported a 17% decline in “hospital acquired conditions” between 2010 and 2014. HACs refer to adverse drug events, central line infections, catheter-associated urinary tract infections, and surgical site infections among others. HHS also reported a reduction of 87,000 patient deaths and over $19 billion in care savings because of the HAC improvement during the same time period. The ACA implemented penalties on hospitals that fail to reduce HAC rates versus similar facilities is credited with much of the improvement.
Obviously, any legislative changes to the ACA will be in the forefront of the news cycle throughout the remainder of 2017. This space will have important updates and analysis as the picture becomes clearer. We would love for you to join the discussion. In the comment section below, tell us what you will be watching for in healthcare news over the next six months. Or, feel free to stop by our Facebook page and share your thoughts.