- Despite a possible Affordable Care Act repeal, healthcare executives still plan to stay the course with value-based purchasing implementation and healthcare cost reduction initiatives, a recent BDC Advisors survey reported.
Although the C-suite executives plan to slow major capital investments in response to political and legislative uncertainty.
“Among the dozen C-suite leaders from leading health systems and AMCs [academic medical centers] in nine states who we interviewed over the past two months, most believe that the healthcare market has many of the same characteristics and challenges as it did in 2011: Cost growth is an issue, quality and value are ongoing concerns, and breaking even on government programs is a challenge,” the report stated.
As a result, healthcare executives do not plan to significantly change their short-term provider responses from the past seven years. The continued responses will be:
• Value-based care implementation to move forward with clinical integration, care coordination, and high-quality care as the paths to full adoption
• Scale will continue to be a strategic method to reduce per unit costs of care
• Commercial insurance will remain the top driver of growth for providers, with Medicare Advantage the most financially attractive government option
• Skepticism remains with Medicaid and Affordable Care Act marketplaces, especially among healthcare organizations disproportionately treating safety-net patients
• Move to quality versus quantity to push on despite possible government support for innovation waning
• Speed to market for innovations continues to be important
• Healthcare cost reduction and asset redeployment remains on the top of executive priority lists
Another recent survey from Lazard also revealed similar executive views on the value-based purchasing transition. After the November 2016 election, executives agreed that value-based purchasing will remain an organizational priority and about 55 percent stated that the majority of their organization’s healthcare payments will be paid under an alternative payment model by 2020.
Healthcare executives in the BDC survey stated that value-based purchasing implementation and healthcare cost reduction initiatives as well as other post-Affordable Care Act plans will continue to move forward because market forces drive healthcare reform more than legislation.
“The challenges facing healthcare are more economic than political,” an executive from a west coast healthcare organization told survey leaders.
Some significant market forces include employers and patients seeking the highest-quality, most affordable care and providers.
While a healthcare organization’s broad strategic plan during a potential Affordable Care Act repeal is unlikely to change, executives did plan to reduce capital investments. Survey respondents agreed that a wait-and-see approach is necessary before investing significant resources in capital projects, such as programmatic growth, hospital construction, and other major purchases.
Most executives agreed that they will wait until the mid-term elections to significantly change their budgets.
The respondents also stated that the broader plan may not change, but healthcare organizations will emphasize “no regret” initiatives.
“The focus, for now, is on what one executive called ‘no regret’ strategies that address fundamental economic forces: the relentless pressure on costs, the rise of consumerism, the shift from inpatient to outpatient care, and the growth of population health management and other forms of value-based payment mechanisms,” the report explained.
The market forces pressuring healthcare organizations to implement value-based purchasing and reduce healthcare costs may not go away under an Affordable Care Act repeal. However, the surveyed executives warned that organizations without experience with value-based care should not invest in its implementation while the repeal is still in the infancy stage.
Healthcare executives pointed to the recent Medicare bundled payment model delay as a reason why. The federal government seems to be reconsidering the value-based reimbursement strategy and healthcare organizations operating on smaller operating margins should not waste their resources until the government’s intentions are clearer.
A possible Affordable Care Act repeal may change the government’s healthcare reform path. But healthcare executives remain confident that many of the major Affordable Care Act provisions, such as the push for more efficiency and value-based reimbursement, will remain.
“Just as in 2011, imperatives to reduce costs and to achieve profitable growth through the delivery of value remain key. In fact, cutting costs, improving clinical integration, and addressing quality and customer service needs—all while focusing on profitable markets for growth—arguably will be even more important strategies in 2017 and going forward than they were in 2011,” the report concluded.