Post-acute care networks, retail capabilities projected to expand
Growth of affiliated physician practices, integrating supply chain and health IT across systems creating challenges
CHARLOTTE, N.C. — The industry’s movement to alternative payment models has health systems exploring innovative approaches to system-wide care delivery, according to C-suite respondents to Premier Inc.’s (NASDAQ: PINC) spring 2016 Economic Outlook survey. A leading healthcare improvement company, Premier conducts the biannual survey to highlight major trends affecting healthcare providers and the industry at-large.
Nearly half of survey respondents – primarily health system CEOs, chief financial officers and chief operating officers – believe the Affordable Care Act (ACA) and population health management are having the biggest impact on their organization’s ability to deliver care.
Expanding and integrating high-value post-acute care networks is an important step in the population health transition, cited by 95 percent of executives as a key area of focus over the next three years. But 94 percent of respondents believe creating these networks is the greatest challenge their systems will face over the same timeframe.
“The ACA unleashed a number of alternative payment policies that incent providers to move toward accountability for the health of a defined population,” said Michael J. Alkire, chief operating officer at Premier. “As healthcare continues to transition from an acute-care hospital focus toward an integrated system of providers, the creation of high-value post-acute care networks is essential for success within alternative payment models, such as bundled payment programs and accountable care organizations (ACOs).”
Shifting payment policies also have providers exploring where, how and with whom to partner and interact to enhance population health. For example, many health systems are recognizing the value of a retail approach, with 66 percent projecting their organization will own or operate its own retail pharmacy in the next three years, up from 54 percent in fall 2015.
“A key aspect of population health is meeting the patient where they are and providing affordable care options at each level of need,” Alkire said. “Increasingly, we’re seeing providers looking to build their own capabilities to reduce variability and create the standard for how care is provided across the entire episode.”
Health information technology (IT) has consistently been the area where respondents projected significant capital investments over the last five years. When asked to rank areas of high capital spend, 84% of respondents chose health IT.
Having interoperable data across the entire continuum of care – including employed and affiliated physician networks – is critical for providers to seamlessly manage population health. While 68 percent of executives say their organizations are successfully accessing ambulatory data from employed physician networks, just 38 percent feel they’re successfully accessing data from affiliated or non-employed physician networks.
“It’s one thing for providers in the same organization using the same systems to successfully share data; integrating data across disparate systems is something else altogether,” said Alkire. “Many affiliated practices lack the proper incentives to invest in high-cost data sharing agreements and interoperable interfaces. We urgently need public policies that require health IT interoperability standards so that providers can access data from any system.”
The supply chain and population health
Though often overlooked in population health discussions, the supply chain presents significant opportunities for providers to improve care efficiency and effectiveness as they create alternative payment models.
Health IT can play a critical role in unifying systems for a holistic view of purchasing across the entire continuum. But many health systems are operating disparate software systems for procurement, accounting, contract management and finance across their facilities. This creates system-wide blind spots that can seriously hamper product standardization and other efforts to improve efficiency. Such issues are magnified by the growth of affiliated physician practices, which have led to complexities for supply chain management, according to 54 percent of respondents.
There’s no place where enhancing standardization is more important than with physician preference items (PPI), which account for 60 percent of all medical and surgical supply spend. Getting all physicians to standardize around a single lowest cost device is a challenge. Yet, it’s one that executives are addressing head-on, with 96 percent expecting to further standardize PPI purchases over the next three years.
“By marrying all the functions associated with purchasing across the continuum on a single IT platform, materials managers can close gaps and generate the significant savings needed to succeed in the new world of payment reform and cost cuts,” said Alkire.
About the Economic Outlook survey
Premier’s Economic Outlook survey highlights emerging economic and industry trends impacting health systems. C-suite respondents to the most recent survey, which was conducted online in winter 2016, represent 82 health system executives across the U.S.