In 2011, the health care industry went through some interesting changes – from Meaningful Use attestations and delays to ICD-10 – but one of the less publicized milestones was one that may have a deeper and longer lasting effect on how we care for patients and that was the CMS final rule on the Medicare Shared Savings Program (MSSP). I believe that this rule, and the types of new provider risk-bearing models it encourages, will spawn a whole new generation of health information technology. A generation that focuses not just on patients currently seeing doctors and being admitted to hospitals and appearing on a census, but on a much broader spectrum of analytics, clinical transformation tools, wellness/prevention solutions and automated care management systems for comprehensive management of patient populations.

Let’s call this “The New Core,” vs. the basic EMR which will soon be the old core. It’s from these core tools focusing on managing the health of populations that the new age of care will be enabled.  Think of more provider-led health plans, consumers who get much more engaged in their care. Think of health systems that follow their patients from different risk categories as they migrate through the health system from pre-hospital/ambulatory settings to inpatient to post-acute and on into the home. Payers will still have an important role as efficient intermediaries and as government-sponsored healthcare expands so will the need to outsource the capabilities to manage the new lives covered. Think of a whole new world for physicians and other more empowered caregivers who get paid to take care of patients the way they were trained instead of being handlers of “care transactions” as in the past.

The momentum we’re seeing from CMS-designated Pioneer Accountable Care Organizations (ACOs) and the number of large physician groups seeking MSSP status is enough to showcase the HIT changes afoot. Today nearly 40 Pioneer ACO organizations – such as Sharp Healthcare, Allina Hospitals & Clinics, Partners Healthcare, Texas Health Resources, Atrius Health, and others – are taking on risk for large populations of Medicare patients that they weren’t previously responsible for. We’re seeing top-performing physician groups – including WESTMED and Cornerstone Health – applying for MSSP status and investing in these new tools, as they recognize the future of bearing and managing risk is inevitable. As we look ahead, I envision the impact of these changes to be:

  1. Provider risk and integrated care models: By the end of 2012 I believe there will be a minimum of 50 major health systems and physician groups managing full risk on at least 10% of their patient population – a lofty goal perhaps but one that is already well underway. Whether the motivation for these new partnerships is cost reduction, market share, experiments with provider employee populations or payer-led efficiency programs, the end result will be the same – more provider organizations doing more than just dipping their toes in the risk-bearing water. I’ve talked to the C-suites of more than 200 health systems in the past 18 months and can assure you that there is no longer a question of whether they will become more accountable, but instead they’re looking at when and how to accomplish this.
  2. Revenue cycle management: Hospitals leak revenue more than any other business in any other industry – with the average health system collecting only 33% of what they actually bill under the current fee-for-service (FFS) system. On top of this they will be burdened by the introduction of new fee-for-value (FFV) payments. Just meeting the basic requirements and maintaining status quo in this new environment will be challenging. As a result, 2012 will bring an emphasis for hospitals on closed-loop revenue cycle management, making it easier to adapt to new coding systems and offer long-term improvements, rather than quick fixes that are not sustainable. If they’re smart, they’ll act sooner rather than later to enable them to have the cash on hand to be ready for it all.
  3. ICD-10: Less than 10% of healthcare providers are halfway to ICD-10 readiness, but with the introduction of up to 155,000 new reimbursement codes by 2013, ICD-10 could be an insurmountable challenge. Without preparation, hospitals face lost productivity and denied claims, which coupled with under coding, could deliver a financial hit of as much as $850,000 for an average 250-bed hospital. The implementation of computer-assisted coding systems that ease this transition takes time. The time to prepare is now, and in 2012 I see more hospital systems jumping on this critical bandwagon.

2010 was the year that the “Accountable Care” buzzword arrived en masse, 2011 was the year that government regulations were sorted out and private partnerships around shared risk were developed, and I believe 2012 will be remembered as the year the ACO translated into new models of care, with hospitals and large physician groups engaged and starting to manage risk and deliver care in a much more integrated fashion. This will also be a transformational year for health IT.  The New Core is here. From a new breed of analytics that help measure quality outcomes, to secure networks enabling physicians to share patient information in a more integrated fashion, to clinical actuarial tools that help caregivers manage cost and quality at the same time … Wait. What? Clinical people managing costs? Welcome to the new world! More on that in my next post.

Todd Cozzens