Five Action Items for Health Care Executives and Board Members, Part One

Putting aside hotly contested issues such as the proper scope of federal authority and the cost of expanded coverage, the new law has pragmatic implications for health care providers in five broad areas that will affect provider activity in a number of different ways.  Today is Part One of covering the Five Action Items for Health Care Executives and Board Members.

Five Action Items for Health Care Executives and Board Members, Part One

Although some provisions of PPACA are implemented in phases, the law does specify a timeline and road map for short and long term provider activity. Major action items should build on core themes underlying the legislation itself, and can be expressed in finite and tangible terms.

1. Develop Essential Infrastructure
Though the law mandates “demonstration” programs beginning by 2012, the overall future direction of Medicare payment systems is somewhat apparent. In coming years, successful systems will necessarily emphasize quality and outcome metrics rather than volume of services delivered. To remain competitive under a changed paradigm, provider organizations will be well-served to develop the systems, infrastructure, and practices to facilitate delivery of care according to these changing and redefined criteria.

One central component of effective integration will be information technology functioning as a central nervous system for provider networks and allowing performance assessment in a useful manner. Federal financial support already supports “meaningful use” of EHR technology, and the 2013 sunset of certain Stark Law and Anti-Kickback Statute legal incentives promoting the deployment of clinical information technology may spur greater adaptation in the future

Since future directions are now more apparent, many provider organizations will consider accelerated deployment of the requisite HIT and related infrastructure needed to succeed in a reformed payment and delivery system in order to take advantage of still-lawful federally protected financial support vehicles.

2. Survey Existing Resources and Build Upon Them
Accountable care organizations, value-based purchasing programs, and other initiatives will not be immediately transplanted to or developed in every locality across America, and many systemic changes will be more incremental in nature. Assuming, however, that (at least) some federally prescribed demonstration projects under PPACA prove fruitful in enhancing quality and/or managing costs, such systems may well be replicated on a more widespread and permanent basis in the relatively near future. This reorientation will very likely encompass private third-party payers in addition to Medicare, Medicaid, and other government programs.

Various clinical and administrative structures and systems already exist to a greater or lesser degree in many communities. These include provider networks (e.g., IPAs, PHOs), payer arrangements with captive or “friendly” health plans, and other management services and related arrangements involving personnel, technology, risk assessment, financial management and other infrastructure.

Using a conventional “make or buy” analysis, in many communities these established resources may be capable of serving as a platform from which more advanced care coordination can evolve and related support systems providing needed tactical support can develop. For many organizations, it will be both prudent and necessary to explore partnerships and the formation of broader networks and alliances which move beyond the traditional market and geographical boundaries in order to move quickly into the new environment.

Hospitals and physicians will be well served to evaluate their business and professional relationships in the context of existing relationships and available hard and soft infrastructure elements, and to consider how that apparatus can be used to prepare for and engage in the next-generation delivery and payment systems that are now encompassed within the new law.

In this week-long series, we will post five articles that will help you understand the primary areas targeted by new health care legislation so you can focus your efforts accordingly and position your organizations for the transformative changes that lie ahead.

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