By Ketan Patel, Advisory Principal, KPMG Healthcare
Blockchain, cloud computing, advanced analytics, and remote monitoring are just some of the technologies presenting businesses worldwide with both challenges and opportunities. At this moment, they are especially resonating as opportunities with healthcare industry executives because – when brought together in various combinations – these technologies can offer powerful and detailed operational insights, especially relative to quality and cost of care.
The ability of healthcare providers, in particular, to measure outcomes faster and with greater accuracy, is huge as health plans and government payers look to tie quality with what they are willing to pay for care.
For example, the federal government is trying to encourage alternative value-based payment models outside fee for service, such as bundled payments, Medicare Shared Savings Plans, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) and various incentives within Medicare Advantage. Commercial payers are looking to follow a similar path as it relates to value-based reimbursement approaches.
In effect, healthcare providers face more financial risk from these alternate payment models – primarily in the form of lower revenue due to reimbursement maximums imposed by payers. This puts the onus on healthcare providers to enhance their sophistication and understanding when it comes to measuring outcomes and the total cost of care – even before entering contracts with payers.
Technology can help healthcare providers on this front, but there are challenges.
In recent years, a sizeable level of IT investment among leading health systems has been focused on optimizing electronic health records (EHR), part of a major investment wave that started about a decade ago with the HITECH Act.
Providers ultimately realize that EHRs need improvements in how clinicians interact with them. On a more foundational level, EHR systems can also aid in the coordination of care across different settings, whether it’s the ICU, acute care, post-acute, home or hospice settings. And greater coordination improves outcomes and saves money.
While electronic records set the foundation for data collection and improved ability to measure and report outcomes easily via dashboards, newer technologies can accelerate the journey to better quality and lower cost of care.
Advanced analytics, for example, can help case managers and clinicians direct medical treatment to where it is needed most. Today, one percent of the U.S. population accounts for just over 20% of total healthcare spending. If the U.S. is going to bend the cost curve in healthcare to something more economically sustainable, it will be with this group of patients. A key objective, then – especially in a value-based reimbursement climate – is to offer target these individuals with preventive care, proactively managing their conditions before they lead to medical emergencies or hospitalizations.
In this context, artificial intelligence (AI) can be applied to help doctors reduce randomness by identifying their highest risk patients, using a combination of remote monitoring, and the evaluation of past patterns of care and medication use. In some cases, the ability to avoid a hospitalization can be as simple and as profound as changing a medication or its dosage.
A strategic reality has also set in for healthcare providers in this value-based (quality + cost) environment: As they competitively position themselves by acquiring physician practices, sub-acute facilities, home health, and outpatient diagnostic or surgery centers, they’re realizing the strategic necessity of greater coordination across the continuum of care.
Greater connectivity among the providers within a given network can help guide patients through transitions of care and avoid readmissions that could lead to financial penalties against providers themselves. Meanwhile, those broader networks have greater accountability for patient care as well as the opportunity to recoup gains from any savings.
Technology has a lot of promise, but physicians want to see proof that it works. We are speaking about patients’ lives and well-being.
New technologies shouldn’t be exempt from that standard of evidence. Healthcare providers need to make clinicians part of the process in selecting and upgrading EHRs to improve satisfaction and having a bigger role in what technologies are deployed and how they will be used.
Ultimately, technological improvements make it easier to gather the data necessary to illustrate effective patterns of care in a preemptive fashion for those who need it most, allowing providers to uncover opportunities to improve patient outcomes and lower costs.