Healthcare in Transition
The healthcare system, as we know it, isn't just changing — it’s ending. In less than 10 years, it will be a vastly different system, driven by consumer demand and proven outcomes instead of today’s fee-for-service model. That should come as no surprise to you, as each of your legacy practices saw the changes coming and decided to join together to form CAO, piloting a new business model to take advantage of this new healthcare frontier.
After all we have accomplished together in the last year, I believe in our vision and business model now more than ever. We are ahead of the curve and poised for success in a new, and radically different, healthcare environment.
Private practices, hospitals and large health systems are all struggling to find their way in the midst of this disruption. Small physician practices are being forced to continue fighting a losing battle against reduced reimbursements, the increasing costs of employee benefits, malpractice and overhead, and the ever-growing federal paperwork requirements. We see this happening all around us, and every day we are working to develop new and efficient solutions that can be implemented through the strength in numbers we have in CAO.
At first glance, hospitals and large healthcare systems seem to benefit from this turbulence. After all, they have been the ones rapidly employing physicians and commanding insurance reimbursements that are significantly higher than those available to individual physician groups. But in reality they are perfectly designed for an obsolete, reactive fee-for-service reimbursement system, where the consumer has little choice or power. Until now, the health system has not been a very competitive or open market.
Soon, these large health systems — particularly hospitals — will be vulnerable. They are simply too expensive and, in far too many instances, don’t provide a high enough quality of care to be worth the extra costs they add to the system. David Houle and Jonathan Fleece, authors of The New Health Age, predict that one-third of America’s hospitals will be forced to close, or dramatically reinvent themselves, by 2020. Other experts have predicted that half of our hospitals will suffer this fate.
Patients are becoming consumers and are being empowered by the changes in healthcare. They are researching, comparison-shopping and demanding high-quality, low-cost outcomes — the real value of health services — instead of a long list of services and procedures. In fact, a research report by Oliver Wyman, a leading consultancy, estimates that this shift will cut $500 billion of “low-value-add” activities that are currently the routine. Wyman also estimates that we could soon see as many as 85 million consumers, with $600 billion in purchasing power, choosing their own healthcare for the first time and selecting their own preferred service providers.
The shift in power is already underway, but it will continue to catch many, many smaller physician practices off-guard in the next few years. We, on the other hand, are in a unique position to thrive in the midst of this transformation. We have bargaining power, strength in numbers, and the opportunity to build an incredible network with other physicians and service providers. And our entire business model is built around the “quality patient experience.” We have the ability to become the obvious first choice for orthopaedic care as patients gain more and more power to choose their own providers.
To be truly successful, we must be able to prove the value of the CAO experience, with measurable, quantitative data. We must reach patients where they are, through strong referral relationships and urgent care facilities that will provide the best care possible at the lowest price.
We have been working steadily toward this vision:
- We have negotiated a contract with Binary Fountain to obtain and review customer feedback through a 20-question survey that each patient will take on an iPad at the end of their visit. This will be invaluable to us in establishing best practices and constantly improving our patient experience. Binary Fountain’s technology will be rolled out in phases to each division over the course of 2015.
- We are talking with several technology companies to identify the best solution for mining data from our varied EMRs and practice management systems. This data will be crucial for us to prove our value to patients, referring physicians and insurers in the future.
- We are working with Jack Diamond of Brennan, Manna & Diamond to develop a strategy for when and where we should establish urgent care facilities.
- We are working to find ways to improve our physical therapy services so we can better serve our patients and control the entirety of their care.
- We are partnering with Everseat to provide patients with a mobile app that will allow them to book open appointments made available through last-minute cancellations.
- We are establishing relationships with primary care providers and health systems to expand our patient-referral network.
- We have established a Quality Improvement Committee and a Risk Management Committee that are working on ways to improve the quality of the care we provide.
Over the past year, we have also been working to make CAO as lean, agile and compliant an organization as possible to better prepare for the changes ahead. This includes negotiating better supply contracts to drive down overhead expenses and hiring Susan Wahlberg, the former compliance officer at MedStar Health, as a consultant to oversee the development of our compliance plan and the implementation of other important policies and procedures. We have also collaborated with JP Melvin to roll out Phase II of the Hyland billing process, a direct result of your feedback and recommendations for improvement.
All of these initiatives, big and small, are positioning us to become leaders in the healthcare revolution. Our doctors will remain motivated to provide the best patient care because they own the practice and can control how they treat their patients. And The Centers’ business model will likewise support our focus on the quality of our patients’ experiences.
There will always be bumps in the road when you are doing something new. Every single healthcare organization is being affected by the changes that are turning delivery of care upside down. Yet The Centers is at the forefront of the changes that are occurring in healthcare and, if we stay focused on our goals and work together to achieve them, we will be among the first to benefit and thrive in the new healthcare environment that is coming.