The top 10 issues facing hospitals


The top 10 issues facing hospitals

Riding the wave of healthcare reform, hospitals will face a period of rapid change in 2014. HRMR examines some of the key issues they will be addressing.

1. Rising patient numbers

The Affordable Care Act (ACA) has brought an influx of new patients into the health system, many of whom were previously uninsurable. From January 2014, Americans who earn less than 133 percent of the poverty level (approximately $14,000 for an individual and $29,000 for a family of four) will be eligible for Medicaid. With this influx of patients comes a host of risks, not least difficulty in adequately tending to the needs of a larger patient population, a significant portion of whom may have conditions that previously rendered them uninsurable.

2. More penalties for readmissions

From October 1, 2014, four conditions will be added to the list of disorders that are linked to penalties for higher rates of 30-day readmissions. Previously the penalties were related to patients treated for heart attack, congestive heart failure and pneumonia. From October penalties will also apply for patients initially admitted for stent placement, coronary artery bypass graft procedure, vascular surgery or care for chronic obstructive pulmonary disease.

It is expected that the penalties will stack up for hospitals that serve poorer populations and therefore have higher 30-day readmissions.

3. Physician alignment

Another effect of the ACA has been a wave of physician employment by hospitals. While this approach works well in an accountable care organization (ACO) environment, a physician employment strategy can be costly for the hospital. Where hospitals initially focused on employing the most productive physicians, they are becoming less choosy and the result could be losses on professional fees. In addition, there is evidence that when physicians become salaried employees of a hospital, provider productivity declines.

4. Bring your own mobile device

In 2014 more doctors and nurses than ever will be bringing their own mobile devices to work, but many hospitals still do not have a secure enough environment to protect sensitive patient information. Consumers are concerned about the privacy of their medical information if providers were able to access it on their mobile devices, and they have good reason to be: earlier this year, PwC stated that only 46 percent of hospitals had a security strategy to regulate the use of mobile devices.

5. Population health management

Medicare’s ACO and patient-centered medical home initiatives have laid a foundation for improving population health, but other collaborations are fuelling growth in population health management. In 2013, more companies formed partnerships to build their population health IT infrastructures and to share responsibility for patient outcomes and satisfaction, data collection and analysis, member education and engagement, with a focus on at-risk populations. This trend is expected to continue in 2014.

6. Business associate HIPAA compliance

The HIPAA/HITECH Omnibus final rule has brought with it a host of important changes, not least the requirement that business associates become HIPAA-compliant. Physicians have until September 23, 2014 to bring all their business associate agreements into conformance with the new rules. The new rules also apply this requirement to business associates’ agreements with their covered subcontractors.

7. Pressure to improve quality

A hospital that performs badly in the measures now being scored under incentives and penalties written into the ACA will expect dramatic reductions in payments over the coming years. This adds up to a huge incentive for hospitals to focus on improving quality. Issues such as
30-day readmissions, patient experience scores, poor compliance with core measures, hospital-acquired conditions and 30-day mortality all need to be addressed if a hospital is going to avoid being penalised.

Another focus for quality improvement will be supply chain integrity. In 2013 dozens of people died and hundreds became unwell as a result of steroid injections infected with fungal meningitis. In the light of this, hospitals and physicians look set to closely examine their supply chains, checking the credentials and safety ratings of their sources.

8. Cost reduction

With reimbursement ready to be reset under the ACA and in light of the ongoing federal budget debate, hospitals are scrambling to reduce costs even further, says PwC. And, with more than 40 percent of consumers postponing care because of costs, hospitals must be competitive. Labor productivity and supply cost reductions were the first phase, now organizations are embarking on full-scale transformations of their care delivery models. Successful transformation addresses how and by whom care is delivered.

To maintain high quality while implementing sustainable cost reductions, health systems are involving clinicians, staff and even patients in redesigning the delivery of care. Retooling labor management is only part of the equation as organizations look for innovative ways to build upon group purchasing contracts and create regional supply chain cooperatives with other provider organizations.

9. Electronic health records (EHRs)

The 2014 mandate for adopting EHRs is fast approaching. By early January 2015 Medicare-eligible professionals who do not adopt and demonstrate meaningful use of EHRs will have their Medicare physician fee schedule amount for covered professional services reduced by 1 percent each year.

10. Engaging patients in their healthcare

Research shows that when patients are engaged in their healthcare, it can lead to measurable improvements in quality and safety. Changes in reimbursement models have placed hospitals under increasing pressure to focus as much on prevention and wellness as on treatment. In 2014 there will be an increasing focus on getting patients to manage their own health both within and outside the hospital environment. The challenge will be to provide them with the appropriate resources and information, and to create the right opportunities to make this possible.