Editor’s Note December 2011

What to Watch

There is enough activity and change in healthcare today that in order to keep up, you’d need your head on a swivel. We’re talking big stuff here – healthcare legislation, an influx of millions of patients into an already maxed out market, a shift from a fee-for-service
model to one that provides a more holistic approach to care.

So what are some of the key topics to keep an eye on in 2012?

Accountable care: There was a lot of talk in early 2011 regarding accountable care organizations – teams of doctors, hospitals, and other healthcare providers and suppliers coordinating care in the hopes of improved quality and outcomes, with reduced costs. The proposed rules announced in the spring were considered by many healthcare stakeholders as too cumbersome, with more risk than reward for participating organizations. After months of speculation, and after reviewing more than 1,300 comments on the proposed rules, the Department of Health and Human Services (HHS) released its final rules this fall, which contained half the amount of quality measures, and less risk and more reward for participating organizations. CMS also introduced a number of other initiatives aimed at creating accountable care systems. Meanwhile, a number of commercial payers are collaborating with IDNs, individual hospitals and physician offices in accountable care initiatives aimed at lowering costs and improving care. Expect to see ACOs tied to Medicare reimbursement roll out in the spring and summer, but for the movement as a whole to spread through government, and commercial, programs.

Physician acquisition: Physicians are seeking employment by IDNs in large numbers – that much is evident. What hospitals and health systems are figuring out now is how that affects cost. Does the hospital try and use its distributor/suppliers for non-acute facilities, or allow the physician offices to stick with their non-acute-care distributors? Do they discard the physician office labs for their established centralized lab services, or do they retain them?

Contracting patterns: Regional purchasing coalitions. Or Consolidated Service Centers. Or Affiliate Programs. It’s hard to put an all-encompassing label on these, because each initiative is unique. The bottom line is that hospitals, health systems and group purchasing organizations aren’t staying put in traditional models. They’re looking for savings. And with dwindling reimbursement
and an increase in charity care and costs, they’d be crazy not to.

Look for coverage of these and other emerging trends in upcoming issues of the Journal of Healthcare Contracting.