Healthcare Business Services Trends for 2010

Macro Trends Driving Healthcare Business Services (HCBS) in 2010 and Beyond

#1: Efficient Use of Technology backed by streamlined clinical and administrative processes is a requirement to reach minimum efficiency levels (to combat diminishing reimbursement rates) and remain profitable and competitive. For all of the following reasons efficiency must improve:

• Administrators forced to “do more with less” because of rising health and medical costs with reduced reimbursement rates
• Because of the wide spread use of clunky systems with limited  interoperability, legacy attributes like client-server technology and historic cost models
• To eliminate waste, automate, and optimize outdated processes (i.e. think paper and DMS (Document Management System) for example) to drive long-term cost curve down (i.e. reduce administration and drive efficiencies).
• To enable healthcare “Consumerism” principles, policies, and programs.
• ICD10 (Diagnosis Code) Adoption enables folks to bridge data gap with other countries.
• Integration & Security Challenges: The integration of clinical and financial aspects continues to be a challenge.  Also, medical identity theft and data mismanagement as well as common vulnerabilities and practices that compromise social security numbers (SSN) and sensitive data will continue to challenge IR and healthcare administrators  (Source PWC):
• Mobile and home-based workforce, laptops and portable devices
• Third-party vendor and outsourcing handling, transfers and lost records
• Mishandling and theft of back-up tapes
• Paper handling and dumpster diving
• Call centers and social engineering
• Collecting / using SSNs and personal information more than necessary without properly de-identifying or masking information
• Improper access or broad access controls
• Unauthorized software and use of peer-to-peer networks or accidental file sharing

#2:  Labor Skill Shortage prevalent among secondary, tertiary, and rural markets as well mid-skill level positions such as physicians and nurses as well as mid-level supervisors and managers.  As demand outpaces supply, compensation will increase and proactive recruitment programs led by strategic workforce planning will become a requirement. 

#3: Government Intervention & Regulations

• By injecting $36 billion in health IT through the stimulus fund (American Recovery and Reinvestment Act (ARRA) of 2009), the federal government hopes to create a digital healthcare infrastructure that reduces costs and improves quality. Hospitals and physicians that want the stimulus money will find they have little choice but to comply with the new requirements or suffer future shortfalls in Medicare reimbursement. (Source PWC)
• Potential for tax credits for corporations for wellness programs
• Government-run public insurance option to cover about 46 million uninsured.

#4: Pay-for-Performance – The macro-trend is to incent and reward physicians and hospitals for quality care and improved outcomes will take hold.  Key attributes include:

• Hospitals must perform to get paid
• Payers and employers move the needle on healthy living through incentives
• Moving to outpatient/ retail model.
• Physicians being payed by hospitals

#5: Preventative medicine.  From wellness programs to the philosophy of treating people not patients, to vaccines and regulation, prevention is on the rise. 

#6: The Cost/Quality Conflict > Even after the US economy recorded its worst slump of the last fifty years, health and medical costs continue to grow at a rate of greater than 8% per year.   As costs continue to escalate (especially considering that both the overall volume and utilization of services is increasing -- pricing is driven by unit volume divided by budget) and corporate profitability suffers, small business employers will be forced to push more of the costs of health insurance to their workers in 2010 while expecting more responsibility from workers for managing their personal health. (Source: Medical Cost Trends for 2010 PWC)

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