4 Reasons Why Even a Repeal Won't Stop Healthcare Reform, Accountable Care

Several high-profile conservative politicians have made headlines in recent weeks by vowing to repeal, or at least pare down, the healthcare reform law as it stands today. While debate will continue to surround areas of the law such as the individual mandate and the independent payment advisory board, other regulations are generally supported by healthcare providers and merely reflect the trajectory of the industry.

Brad Benton, the healthcare national account leader for KPMG LLP, says that while consumer press may tout the possibility of repealing reform, the momentum it creates for accountable care, bundled payments and value-based purchasing is not likely to disappear, even if the law was somehow totally erased (which is of course unlikely given President Obama's veto power). "Even if you were to gut insurance exchanges and the opportunity to provide greater access, that's not a dynamic that stops the continuing development of the use of evidence-based models and other processes to make care more efficient and less costly," he says.

Here are four reasons why reasons why the revolutionary trends anticipated for the healthcare market will persist regardless of the fate of the Patient Protection and Affordable Care Act.

1. Unsustainable costs.
Healthcare is consuming 17 percent of the GDP and trending upward, says Mr. Benton. "There needs to be some sort of change in the traditional business model."  As a result, accountable care and other models that promote making care more efficient are beginning to resonate.

2. Employers crying foul.
In the past few years, waves of employers have begun to cry foul over the benefit increases insurers have passed on to them. "We're at a place today where the large employer community is really standing up and saying 'we need to step back and reconsider' [our current ways of providing coverage and paying for care]," says Mr. Benton.

Large employers have great political clout, but they also have the means to forge relationships directly with healthcare providers and facilities — an idea that in the past seemed almost absurd. In recent years, Lowe's agreed to send employees to the Cleveland Clinic for certain heart procedures in return for the Clinic agreeing to accept bundled payment for the services. Earlier this year, Catholic Healthcare West, Blue Shield of California and California's largest independent physician network, Hill Physicians, formed an ACO to better coordinate care specifically for the California Public Employees' Retirement System. The ACO was one of the first operating in the country, and its initial idea of conception predated healthcare reform by several years.  

3. HIT enables it. Healthcare information technology's ability to share data among providers, facilitate adherence to evidence-based care pathways and track patient and quality data creates a perfect storm for models that involve making providers more accountable for care asking them to take on financial risk for their performance.

"Where we are today in terms of level of sophistication and the ability to drive clinical intelligence through HIT has created a environment that will ultimately facilitate vast improvements in variability in clinical outcomes," says Mr. Benton.

4. Reimbursement realities. Finally, pressure on reimbursements of providers coupled with governmental demands for costly investments in HIT and other reporting requirements have threatened the independent medical practice, causing many providers to seek refuge in the hospital's arms. The increase in employed physicians and integration will naturally lead to care that is better coordinated and can be reimbursed under bundled or capitated models. 

On the horizon

This transition toward more integrated and accountable care is also expected to result in market consolidation. Smaller providers will merge with larger ones, and the larger ones are likely to expand their reach both geographically and through the continuum of care, since increased scale will likely be linked to improved financial performance in this type of environment.

"Some healthcare organizations, such as academic medical centers, already have established clinical programs that cover the entire continuum of care and will not have to do as much as other systems," says Mr. Benton. "Other providers will need to determine which assets they need to cover the entire continuum to be able to meet the health needs of an entire population." To expand their continuum, hospitals will acquire or contract with other providers or may link up with other health systems, he says.  Additionally, other components of the healthcare ecosystem may well be necessary to ‘construct’ an effective ACO, including portions of current business models that reside in the payor community and with other healthcare intermediaries.”

The most difficult part of the transition will be managing the curve from the fee-for-service to the pay-for-performance healthcare environment. Despite the inevitability of the accountable care and pay-for-performance environment, many organizations will be slow to enact structures and processes to operate in this way, since they are reimbursed under a fee-for-service model. "This may be the type of change that can't be managed incrementally or on a curve," says Mr. Benton. "It might be the type of revolution that requires a step change."

Learn more about KPMG LLP's services for the healthcare industry.

Copyright © 2024 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.

 

Featured Whitepapers

Featured Webinars