The pandemic has shifted the focus in health care and has exposed many challenges that have come to the foreground that organizations and senior leadership must address in their strategic and growth initiatives. Expansion doesn’t necessarily mean geographic or physical facilities’ growth, but rather growth in systems, process, operations, strategy and overall patient experience efforts.
In 2022, organizations continue to struggle with labor force shortages, increasing costs, high inflation and supply chain issues. The nucleus and foundation in addressing these current obstacles is the patient experience. COVID-19 certainly changed the way health care is offered, with the introduction of more technology for remote services, the population relocating for jobs and new opportunities, and the influx of private companies offering health care services in the space. With all this change, senior leadership and organizations can evolve, too, by changing the health care landscape even further through patient experience. Improvements for many organizations in this area can be achieved via optimized interoperability, value-based care and partnerships. Let’s explore further.
The power of interoperability
Many organizations can achieve a quality patient experience through improved interoperability, the ability of two or more entities to send and receive information. Currently, there are not enough hospitals and health care organizations sharing patient data. For example, a study by the Kaiser Family Foundation found one of the costliest problems is hospital readmissions. The Centers for Medicare and Medicaid Services (CMS) reports nearly one in five Medicare beneficiaries experiences a readmission to the hospital within 30 days, costing more than $26 billion each year. This negatively influences the patient experience, and as a result, many of these same patients could look elsewhere for care in the future. This trend can be corrected by more organizations working to share and receive data in a timely manner. In addition, sharing patient data can help providers know the appropriate prescriptions or surgical history of patients, which can be used to make timely decisions that will reduce unnecessary testing and costs to the organization and patient.
Value-based care’s impact
Interoperability is just one piece of the pie to lowering costs and improving the patient experience. A study reported by the American Medical Association shows that 71% of organizations still use fee-for-service models which requires providers to see many patients and provide a variety of services to receive reimbursement. This model may have worked in the past, but organizations are struggling with labor shortages, and they are not able to provide as many services for patients struggling with rising costs. According to CMS, health care costs have increased in 2022 by 3.6%, due in part to high labor and supply costs, and health care spending increased to $4.5 trillion. During the pandemic, U.S. health care spending grew 9.7% in 2020, reaching $4.1 trillion or $12,530 per person. As a share of the nation’s gross domestic product, health spending accounted for 19.7% in 2020. This price growth is not sustainable and places stress on organizations to keep up with costs, as well as on patients who in some cases must make choices between whether to buy groceries or go to the doctor.
Organizations should review their current reimbursement models and consider value-based care models where providers are incentivized financially on patient outcomes and results. To transition to value-based care, organizations must work with CMS to establish the quality measures and structure to support the incentives providers will receive from the desired outcomes. These modeled outcomes will not only keep patients engaged with an organization but also could eventually reduce waste by eliminating unneeded tests and procedures and increasing efficiencies.
Growth via partnerships
Interoperability and value-based care models could improve the patient experience immensely. However, not all organizations provide the same types of services and not all organizations want to hire medical professionals for additional services they do not offer. This could hinder the patient experience because patients will either seek services elsewhere or be referred out. Labor and supplies are very costly in 2022, but needed for organizations to grow. As an alternative, some may consider partnerships as a way to expand.
Partnerships and acquisitions of services that are not currently offered at a given organization increase the ability to provide a full continuum of care to patients. However, senior leaders must be strategic as to what type of partners they choose. Private companies with billion- and trillion-dollar revenue streams are growing their presence in the health care space; these companies have the revenue to hire staff and offer services at prices that some competitors cannot. This puts some hospitals and other health care organizations with less revenue at a major disadvantage. However, with a focused patient experience strategy, many organizations with a smaller balance sheet can build partnerships with behavioral health organizations, long term care, acute care and pharmacies to offer patients a full continuum of care. This expansion allows these organizations to grow their market share. And, following the value-based care model, providers can receive more reimbursement because they’ll continue to see the same patients over a continuum of care and capture those outcomes and results, instead of the patient going to another organization to receive those services.
The takeaway
Patients have been struggling with costs and quality of care for many years; the pandemic was the catalyst that exposed these brewing issues to the point where many of these challenges can no longer go unaddressed. Organizations that truly embrace the patient experience and make it a part of their strategic plan will not only see increased revenues, but also will continue to grow by offering more services and increasing their patient census.
Michael Haas and Matt Wolf are health care senior analysts with RSM US LLP.
Michael Haas
Michael Haas is a technology management consulting manager in RSM US LLP’s health care industry practice. In 2022, he was selected for the firm’s Industry Eminence Program as a senior analyst covering the health care industry, working alongside the firm’s chief economist and other program participants to analyze the trends and themes affecting the nonprofit and education industry and shaping middle market businesses. Michael is based out of RSM’s New York City office.
Matt Wolf
Matt Wolf is a financial consulting director in RSM’s health care practice. In 2018, he was selected for the firm’s cutting-edge Industry Eminence Program as a senior analyst covering health care, working alongside the firm’s chief economist and other program participants to analyze trends and themes affecting the industry and shaping middle market businesses.
In addition, Matt leads the firm’s health care valuation team and serves as the practice leader for RSM’s Nashville, Tenn. region health care practice. He is also an active member of the firm’s Family First employee network group.
