Editor’s note: A year from now, the Affordable Care Act will be 10 years old. How could the 2010s have been anything other than fascinating, considering what started the decade? Repertoire magazine – a sister publication of the Journal of Healthcare Contracting – selected some articles that reflect the bumps, turns, sudden stops and jumpstarts experienced by an industry trying to navigate in new territory.
Long-term collision course
January 2010: Nursing homes and other long-term-care providers may be adequately staffed today, but as we move closer to 2020, the aging population will far outstrip the workforce, said Brad Klitsch, senior vice president of marketing development for Direct Supply Inc. Add to that the generational challenges facing long-term-care providers. On the one hand, patients and residents are becoming more demanding, a trend that will only intensify as Baby Boomers start entering nursing homes. On the other hand, nursing home administrators and directors of nursing will have to learn how to communicate and motivate a younger generation of workers.
New to the healthcare lexicon
February 2010: “The trend is clearly moving toward outcomes and performance-based care,” says Tom Schwieterman, M.D., director of research and development for Midmark. “Doctors will be increasingly incentivized and paid based on how well they manage their disease management programs,” he says.
February 2010: “[W]hat we are learning – and this is very true especially in the molecular diagnostics space – is that cancer is a heterogeneous disease,” says John Blackwood, vice president and general manager of Beckman Coulter’s immunoassay business center. “Not all cancers are the same. So the question goes from, ‘Does the patient have cancer?’ to, ‘If they do, what is the likelihood that that specific cancer will spread or cause significant disease?’ That’s where cancer diagnostics is going today and in the future.”
The vendor credentialing tug-of-war
March 2010: The vendor credentialing issue appears to be more of a tug-of-war – some might say quagmire – every day. While providers make their case for the need for credentialing, vendors wish the whole thing would go away. One group trying to find the proverbial win-win is the Healthcare Industry Supply Chain Institute.
The decimation of primary care?
April 2010: In a 2009 position paper called “Reforming Physician Payments to Achieve Greater Value in Health Care Spending,” the American College of Physicians criticized the current Medicare payment methodology. “Fee-for-service payments create incentive for physicians to provide more services, not necessarily the services that are most effective for a particular patient” it said. Furthermore, fee-for-service reimbursement has decimated primary care by rewarding doctors who perform procedures, while financially penalizing those who provide more consultations, counseling and long-term health management.
Physicians punch the clock
June 2010: More physicians are breaking out of the mold of the independent, lone medical provider of yesteryear, and opting to punch a time clock instead. The employers of choice aren’t physician practice management companies, which were swallowing up physician practices 10 or 15 years ago. Instead, they are hospital-based integrated delivery systems.
Telemedicine: Ready for prime time
July 2010: “I’ve been doing this 20 years, and every year, it’s ‘This is the year,’” says Steve Normandin, president of AMD Global Telemedicine, Chelmsford, Massachusetts. “But the industry has made more progress in the last 18 months than in the previous 18 years. You have a new generation of doctors who are much more exposed to technology. All the technology we’re using, 20 years ago was bleeding edge.”
Act 2 for retail clinics?
September 2010: Back in 2006 and 2007, pundits were predicting that as many as 5,000 retail clinics would dot the country in just a couple of years. Today [in 2010], there are approximately 1,200 clinics in 38 states. Yet clinic operators aren’t glum. To date, clinics have accounted for 12 to 13 million patient visits. And they are looking toward a bright future, one that will likely see an emphasis on chronic disease management, as well as more partnering with hospitals and hospital systems.
The danger of opioids – already, in 2010
October 2010: Once used primarily to relieve pain following surgery or cancer, or at the end of life, opioids today are used widely to relieve severe pain caused by chronic low-back injury, accident trauma, arthritis, sickle cell, fibromyalgia and other conditions. With the increase in opioid usage, however, concerns have grown about abuse, addiction and diversion. The American Pain Society guidelines call for clinicians to continually assess patients on chronic opioid therapy by monitoring pain intensity, level of functioning and adherence to prescribed treatments. The society recommends periodic drug screens for patients at risk for aberrant drug behavior.
Should distributors be worried?
November 2010: It’s unlikely that self-distribution [by health systems] will ever blossom into a full-blown “trend.” Most IDNs seem satisfied to “buy” rather than “make” distribution expertise. And how many have the capital to make the necessary investments in facilities, equipment, labor and inventory? Still, distributors can’t afford to be complacent.
The good and the bad for lab
January 2011: Political and market trends appear to be smiling on the lab market – including the physician office lab – in 2011. After all, the government has listed a number of services, including screening for breast cancer, cervical cancer, cholesterol abnormalities and colorectal cancer, that insurers must provide to their customers without a co-pay. And a major emphasis of healthcare reform is disease prevention and wellness, which certainly plays into the hand of the diagnostics industry.
Who will service the non-acute customer?
May 2011: If hospital systems and IDNs acquire physician practices or employ physicians in large numbers, who will service them? Will supply chain executives insist that their acute-care distributor service these new accounts, or will they back off and let the non-acute-care distributor continue to take care of that side of the business? Both acute-care and non-acute-care distributors have reason to be hopeful…and apprehensive. Hospital distributors have an “in” with supply chain executives, but they lack expertise in distributing to non-hospital sites.
The 2.3 percent hot potato
July 2011: With medical device manufacturers facing a 2.3 percent excise tax on sales beginning Jan. 1, 2013, the question comes up, “Who’s going to get stuck holding the bag?” Will manufacturers take the hit to their bottom line? Will they try to pass along the cost of the tax to buyers? Or will buyers and sellers come together to create efficiencies that will reduce the pain that the tax may inflict on any one member of the supply chain?
August 2011: Shortages of drugs – including injectables – are cropping up unannounced more than ever. The issue has become serious enough to capture the attention of federal lawmakers, who have proposed legislation that would give the market a heads-up when shortages occur or are anticipated.
Our own worst enemy?
December 2011: For many years, our industry has resisted the obvious efficiency of rationalizing pricing between markets, said Ted Almon, president and CEO of Claflin Co., Warwick, Rhode Island. Yes, nearly infinite price discrimination can enhance profit [for suppliers], but does it do so at a rate greater than the cost of rebate administration, reconciliation, and auditing?
Total cost of care
February 2012: Concerns about the cost of healthcare and the quality of healthcare – expressed in terms of patient outcomes – have never been as severe as they are today. Concepts such as “value-based purchasing,” “technology assessment” and “comparative effectiveness” are raising the stakes. And government and private payers are beginning to demand that providers address the total cost of care, rather than care delivered just in the acute-care facility, or the doctor’s office, or the long-term-care facility, or the home.
Payers, providers join together
April 2012: A lot of ink has been shed about hospitals and hospital systems acquiring physician practices. But there’s another player elbowing its way to the table – insurers. With years of experience monitoring and paying claims, insurers have developed the management expertise and databases to affect how – and what – care is delivered, to whom, and with what results. They are starting to exercise their strength in the market, either by acquiring or merging with providers, or forming strategic partnerships with them.
May 2012: True, many health apps are designed to help people track calories consumed, calories burned, miles run, etc. But increasingly, devices and accompanying apps are helping people – particularly those with chronic conditions – monitor their health and communicate with their caregivers. The implication for physicians and physician office traffic could be huge.
Physician, stop thyself from doing stuff
June 2012: In April, nine leading physician specialty societies published a list of 45 tests or procedures that they say are commonly used but not always necessary. The lists of “Five Things Physicians and Patients Should Question” are said to provide specific, evidence-based recommendations that physicians and their patients should discuss to help make wise decisions about the most appropriate care based on their individual situation. The nine organizations releasing lists as part of the “Choosing Wisely” initiative represent nearly 375,000 physicians.
Readmission reduction: The new game
March 2013: The federal government is trying to change the rules of the game of U.S. healthcare. Traditionally, providers get paid for doing more procedures and providing more care. But spurred on by the Patient Protection and Affordable Care Act, the feds are trying to turn that formula around. One vehicle they are using to do so is the Hospital Readmissions Reduction Program.
The retail clinic challenge
March 2013: There are more than 1,400 MinuteClinics, Take Care clinics, Little Clinics, clinics at Walmart, and other retail clinics in the United States today, according to Shoreview, Minn.-based Merchant Medicine. Should doctors be worried? “I would say they ought to be more aware than concerned,” says Ken Hertz, principal, Medical Group Management Association Health Care Consulting Group. The retail clinic does indeed present competition to the classical practice model, offering greater price transparency and better hours. Retail clinics also address walk-ins far more efficiently than the traditional physician office. “These are all customer-centric issues,” he says. “At the very least, [physician practices] have to be able to handle appointments in a timely manner. They have to understand the competition and what they can do to provide a competitive advantage.”
Linking products and outcomes
July 2013: If there is a difference between the way providers buy products today and how they did so in the past, it can be summarized in one word: Data. Today, with purchasing groups such as Premier, VHA, Amerinet and others as catalysts, millions of bits of data can be aggregated and massaged to help providers do what they have always wanted to do – link products to outcomes. “We’re helping our members prepare for and adapt to a post-reform world that increasingly links costs and quality, and pushes providers to be more accountable for the overall health of populations,” says Bill Marquardt, vice president of portfolio management, Premier healthcare alliance.
FDA and mobile apps
December 2013: It’s a sign of the times. The Food and Drug Administration issued in September final guidance for developers of mobile medical applications, or apps. The bottom line is, the agency won’t pay much attention to the majority of apps, because they don’t pose a threat to consumers. However, it will turn its attention to that subset of apps that present a risk to patients if they don’t work as intended.
UDI … theoretically
December 2013: It was years – no, decades – in the making. But in September, the U.S. Food and Drug Administration issued a final rule on unique device identification or UDI, as well as a global database for all medical devices. As expected, the highest-risk (class III) medical devices will be first out of the chute.
March 2014: The American Medical Association wants to transform the way future physicians are trained. Judging from study grants AMA has awarded to 11 medical schools, tomorrow’s doctors will be more team-oriented than many of those in past years. In addition, they will be technologically adept, community-health-focused, outcomes-oriented, and business-savvy.
June 2014: From adversity can come good things. Take the current shortage of IV solutions – particularly normal saline and dextrose solutions. It’s true that distributors and manufacturers had their accounts on allocation. But as of press time, no adverse patient effects had been reported. And the Big 3 manufacturers were hustling to meet demand (with help from a German-based company shipping solution from its Norway plant). Meanwhile, healthcare providers were instituting conservation strategies that may change the way they use IV solutions in the future.
For physicians, a bigger picture
August 2014: Since October 2012, hospitals have been penalized for readmissions within 30 days of discharge of Medicare patients with pneumonia, heart attack and heart failure. Effective October 2014, the Centers for Medicare & Medicaid Services will add elective hip/knee replacement and chronic obstructive pulmonary disease to the list.
New battleground: Urgent care
September 2014: Situated somewhere between physicians’ offices, retail clinics, and emergency rooms – in terms of the severity of illnesses treated as well as cost to the patient – urgent care centers are becoming part of the medical neighborhood. Hospital systems, private equity firms, insurers, doctors and private companies are betting that walk-in traffic will grow in the months ahead.
Henry Schein and Cardinal Health
February 2015: The recent acquisition by Henry Schein, Inc. of Cardinal Health’s physician office business demonstrates that the needs of the physician office differ from those of the acute-care hospital, and that healthcare leaders recognize as much, according to those involved. The two companies announced in late November that the physician-office-focused business of Cardinal Health’s Medical segment would be consolidated into Henry Schein’s Medical Group. As a result of the agreement, Henry Schein Medical gains service to more than 25,000 physician office customer locations, adds $300 million in annual sales, and brings on approximately 200 sales professionals.
Antibiotics: Too much of a good thing?
July 2015: Since penicillin was discovered in 1928, antibiotics have been a “critical public health tool,” according to the Obama Administration’s recently published “National Action Plan for Combating Antibiotic-resistant Bacteria.” But the emergence of drug resistance in bacteria is reversing their beneficial effects. The Centers for Disease Control and Prevention (CDC) estimates that drug-resistant bacteria cause two million illnesses and approximately 23,000 deaths each year in the United States alone.
Molecular testing: Now appearing
August 2015: “Polymerase chain reaction” and “DNA sequencing” might not be part of industry vernacular today. But the fact is, they probably will be, in the not too distant future. This isn’t to say there isn’t – or won’t – be a continuing place for other point-of-care diagnostics, such as lower-cost lateral flow tests. But the accuracy of molecular tests as well as the attention being paid to personalized medicine and antibiotic stewardship, could push them into the mainstream, despite some concerns about cost.
ICD-10 … for better or worse
November 2015: After years of delay, the deadline for providers to implement ICD-10 codes finally arrived on Oct. 1. “Maybe hospitals will like it, maybe epidemiologists will too,” says coding consultant, author and speaker Betsy Nicoletti, MS, CPC. “But it won’t do one thing for physician practices, except slow them down.” Greg Dean, vice president, technology partners, McKesson Medical-Surgical, has a different perspective. “ICD-10 will increase specificity, which in turn provides more detail, and this can help to improve patient care and outcomes.”
Concordance: A national independent
February 2016: The three independent distributors who announced plans in December to form Concordance Healthcare Solutions say they can service providers caring for about 70 percent of the U.S. population – and maintain their independent spirit while doing so. That means they’ll maintain local customer service, sales and warehousing, and continue to support the branded products that their customers prefer.
Interoperability: An impossible dream?
April 2016: Individual providers – both inpatient and outpatient – have done a pretty good job of implementing electronic medical records within their four walls, but the system breaks down when a patient migrates from one care setting to another. “Beyond technical barriers, there are business barriers, complex privacy laws, workflow challenges, and misaligned incentives that conspire to slow progress,” according to the Health Information Technology Policy Committee in a December 2015 report to Congress.
MACRA reshapes physician payment
May 2016: In January 2015, Health & Human Services Secretary Sylvia Mathews Burwell publicized her goals to improve the nation’s health delivery system. One of those goals is to tie 85 percent of all traditional Medicare payments to quality or value by 2016 and 90 percent by 2018. The feds took a big step in that direction by passing the Medicare Access and CHIP Reauthorization Act of 2015, or MACRA, signed into law by President Obama in April 2015. The legislation repeals the Sustainable Growth Rate (SGR) formula and provides predictable payment increases, at least for awhile. By 2019, CMS will have implemented a new two-track payment system for providers (Alternative Payment Models, or APMs; and the Merit-based Incentive Payment System, or MIPS), which continue the move away from fee-for-service reimbursement.
Social determinants of health
December 2016: ProMedica and Concordance Healthcare Solutions have combined to take the concepts of post-acute care and population health to a new level. ProMedica’s Food at Discharge program ensures that patients in need get a three-day supply of nutritious food upon discharge. Toledo, Ohio-based ProMedica buys the non-perishable food items, and Concordance inventories, packs and ships them to each of ProMedica’s 12 hospitals.
Medical, meet dental. Dental, likewise.
April 2017: In January 2017, Oakland, California-based Kaiser Permanente opened a pilot integrated medical-dental clinic in Beaverton, Oregon. The clinic, Cedar Hills Dental and Medical Office, makes Kaiser Permanente’s Northwest division “the first commercial health care organization to integrate [medical and dental] health records as well as offer coordinated services,” says Kenneth R. Wright, DMD, MPH, vice president of dental services for Kaiser Foundation Health Plan of the Northwest.
Obamacare: Still waiting for the big explosion.
May 2017: Healthcare reform is a moving target. Congress and the president had hoped to make a clean break from the past this spring, but were unable to do so. “We’re going to be living with Obamacare for the foreseeable future,” said Speaker of the House Paul Ryan in late March, following the Republican party’s decision to pull legislation to repeal the Affordable Care Act from consideration on the House floor. Meanwhile, [President Trump] tweeted, “ObamaCare will explode and we will all get together and piece together a great healthcare plan for THE PEOPLE. Do not worry.”
Employers get serious about telehealth
July 2017: Telehealth may be talked about more than it is actually used, but that may change soon. According to a 2016 annual survey by the National Business Group on Health, nine in 10 large employers will make telehealth services available to their employees in 2017.
August 2017: Less than half of patient care physicians have an ownership stake in their medical practice, according to an updated study on physician practice arrangements by the American Medical Association (AMA). This marks the first time that physician practice owners fell below a majority portion of the nation’s patient care physicians since the AMA began documenting practice arrangement trends.
Print, pack and ship
January 2018: It’s too early to tell how 3D printing will affect the medical device industry, but it could change the way in which devices are developed, manufactured and acquired. Already, the technology has affected the development and manufacturing of instrumentation, implants (e.g., cranial plates or hip joints) and external prostheses, such as hands. Some day, 3D printing may be used to create living organs. And when the U.S. Food and Drug Administration issues a draft guidance for the industry on the subject (as it did in May 2016), you know this thing is for real.
Stop making sense
March 2018: The title of the afore-mentioned 1984 Talking Heads movie comes to mind when trying to interpret this winter’s flurry of healthcare-related announcements:
- CVS Health to acquire Aetna.
- Advocate Health to merge with Aurora Health Care.
- UnitedHealth Group to acquire DaVita Medical Group.
- Dignity Health to merge with Catholic Health Initiatives.
- Ascension rumored to be talking merger with Providence St. Joseph.
- Humana Inc./Kindred at acquire Home Division of Kindred Healthcare.
July 2018: Twenty-six years after the OSHA Bloodborne Pathogens Standard and 18 years after the Needlestick Safety and Prevention Act, people are still getting stuck with sharps – doctors, nurses, phlebotomists, environmental services staff, and others. Part of that is due to shortcomings in safety technology. But human factors – including inadequate staffing and a pressure to see more patients can result in a lack of concentration, a lack of knowledge or a failure to best prepare for adverse events – are also factors.