Stay Ahead of Healthcare Changes: Four Areas to Address

September 8, 2013
Gregory Mertz

Even if things aren’t shifting dramatically in your local healthcare market, this is the time to begin to explore these four key factors.

Whether you are a physician leader or a professional administrator, you should have no doubt that the business of medicine is undergoing significant change that will continue in the years ahead. It is certainly not clear yet where we will end up and even if that point will be positive or negative. There are, however, a few key areas that require ongoing attention to stay ahead of the change process.

Culture The first, and perhaps, most key factor in assuring future success is the openness to accept that doing business "the old way" might not be the way that things should be done in the future. I have had the opportunity to work with many clients that were extremely successful for a long time and assumed that their formula would be valid regardless of environmental shifts. This culture will allow a thoughtful examination of both business and care processes and modifications that might be required to meet new incentives. Global payments vs. fee-for-service; measuring and reporting on quality indicators; group appointments, telephone medicine, and care management; and delegating tasks to support staff that might have once been the role of the physician are examples of things that may need your review.

Governance This is really tied to culture. The need for change has to drive the decisions to change. Have you ever been in a meeting with colleagues where an important decision was tabled because the group hadn’t reached consensus? Have you readdressed a prior decision because a partner had a change of opinion about the best way to proceed? Successful groups will assure that they have all of the available data when they address a problem or issue, discuss the pros and cons of each alternative solution, and make a majority decision about how to proceed. Not every opinion can be accommodated and not making a decision will be equal to making the wrong decision. A growing number of requests I receive are tied to retreats and workshops to help managers and physicians find a better way to lead their organizations. Don’t confuse my urge to move ahead with suggesting that uninformed decisions are any better than the failure to decide. Take the time to assure that all of the information is at hand but, once it is, deal with the issue and move on to the next item that demands attention.

Cost management As I mentioned in an earlier post, you should assume that routine reimbursement will be tied closely to the rate paid by Medicare. Additional dollars will be driven by performance metrics that will differ by specialty. Revisit how your practice runs, identify areas of inefficiency, target manual processes to see if automation is an option, and assure that staff are performing at their full potential. One of the greatest areas for cost savings in the hospital world is supply chain. Are you buying the right number of the right things at the right price? Saving a few thousand dollars a month in medical supplies, medications, and office supplies is possible if you regularly re-bid contracts. Just because a vendor gave you a good price last year doesn’t mean they will continue to be the low priced supplier next year.

Collaboration Physicians and hospitals need each other. Hospitals have responded to this fact by increasing the size of their employed networks. This growth is often in response to the perception that the private medical community is unwilling or unable to partner in addressing mutual challenges. In some cases, the hospital feels that employment is the only way to assure loyalty. Physicians can have a dramatic and beneficial impact on how the hospital functions and, through that, the cost of doing business. In return, hospitals are willing to pay physicians for their services in this area and, in many cases, share the financial benefit that results. Arrangements such as co-management can align the interests of the physicians for greater control in in-patient care with the hospital’s desire for more efficiency. Talking though how the physicians might approach cost management or streaming the care process before meeting with hospital leadership would be time well spent. You’ll find that administrators respond better to an objective outline rather than a subjective 'We’re here to help.'"

Even if things aren’t shifting dramatically in your market this is the time to begin to explore these factors. Every practice can benefit from effective governance and cost management. Understanding culture changes that might be needed are better identified early since this is the most difficult of areas to change. Some hospitals will understand the need to partner with physicians at different speeds. Indicating your willingness may move the process forward sooner rather than later.

Bottom line: It’s better to find problem area before you are faced with the urgency of dealing with a crisis. Start now.