Interview with Russ Rudish
Feeling the squeeze from regulatory and economic fronts, health care providers are looking to health information technologies to improve operational efficiency and patient care, according to Russ Rudish, vice chairman and principal, Deloitte LLP, and leader of the U.S. and Global Health Care practices. Read on for his perspective on the year ahead.
What is the key issue facing the health care provider sector in 2013?
Health care providers, for numerous regulatory and environmental reasons, have been and will likely continue feeling increased margin pressure. The recent Supreme Court decision related to the Affordable Care Act (ACA) clarified the path and pace of federal health care reform efforts. The ACA, among other legislative reforms addressing health care, will likely result in additional taxes, costs and penalties for providers; these could be exacerbated by federal budget cuts unless Congress and the president agree on an alternative to the sequester, a deficit-reduction mechanism written into last year’s Budget Control Act
Health care providers in 2013 are likely to experience a four-prong revenue hit: Under ACA, payment rates may decrease for Medicare and Medicaid populations and providers could be penalized for avoidable readmissions; lingering unemployment may lead to more uninsured patients; increased consumerism is making people more conscious of their health care spending; and fewer individuals are projected to sign up for individual insurance than originally anticipated. All of these factors are putting provider margins at risk. In response, we see health care providers looking at ways to reduce costs and enhance revenue, as they continue to deal with the challenges of operating in a time of transition from fee for service to outcome based reimbursement.
What are some steps companies can take to manage through the current climate of economic uncertainty?
“Organizations that have overhauled operations and implemented effective administrative and clinical information technology (IT) systems can be better positioned should Congress increase fraud detection as a result of their inability to secure appropriation funds.”
Health care providers could begin actively formulating potential scenarios and responses for a market defined by continued economic uncertainty. As cost pressures continue to rise due to penalties for unnecessary care and increasing pressures from physicians to “employ” them, it is important that organizations assess their sustainability and access to capital. Determining how to do more with less is an important consideration and one that should include an evaluation of consolidation scenarios. We continue to see consolidation accelerating in certain regions as large health systems buy additional facilities and/or smaller practices to improve efficiency, spread overhead and reduce operating costs.
Providers could also continue to make more efficient and significant use of technology – both in their facilities and for patient self-care at home. Organizations that have overhauled operations and implemented effective administrative and clinical information technology (IT) systems can be better positioned should Congress increase fraud detection as a result of their inability to secure appropriation funds.
Also, providers might begin initiating tactics to create stronger consumer relationships (e.g., mobile apps, social media, etc.) and closer links among individual physicians, hospitals and insurance companies so that, by working together, they can insure and care for patients in a more fluid and efficient manner.
What are high-performing companies doing to foster innovation and growth?
Health care providers are seeking to establish and maintain a competitive advantage in the uncertain, post-ACA environment of 2013 and beyond. They are investing in new programs and health information technologies that can enable them to forge stronger relationships with consumers, create greater operational efficiencies, lower costs and improve quality.
In addition, health care providers are increasingly collaborating with nontraditional partners – such as health plans and pharmaceutical companies – to identify and pursue novel ways to treat disease, facilitate efficient research and development (R&D) and promote wellness beyond what has been done to date. To support these efforts, providers, health plans and pharma companies are embracing the use of rich data and analytics to drive clinical and operational innovation.