This article is part three of a three-part blog series with Scott Mendenhall. Scott Mendenhall is an experienced revenue cycle professional with twenty-five years of healthcare experience.

What do you predict will be the biggest change hospitals and physician practices will face in the next 5 years?

Medicaid, Medicare, and other insurance companies are currently switching to a value-based reimbursement model, where you’re reimbursed based on the outcomes of how patients turn out. We’re moving away from a “fee-for-service†model where doctors and physicians are paid based on how much they did. How many physicals did you do? How many knee surgeries did you do? How many hips did you replace? With the new reimbursement model, those questions shift dramatically. Instead of simply asking “How many patients did you see?†we’re asking questions like “What were the outcomes? Did you have any readmissions? Did you have any complications?†That’s a big challenge that many hospitals are not set up for yet because they’re going to need new measures that are based on quality instead of quantity. That’s what I see as one of the biggest challenges that’s coming up. And it’s already currently in place because Medicaid, and Medicare in particular, are starting to roll out a value-based reimbursement program which will be based on quality and outcomes. Hospitals aren’t used to reporting on quality and outcomes of how their patients turned out a week after, so that’s going to be a new challenge. They’ll have to gather all the new statistics that are outcome-based versus just reporting their number of admissions. There isn’t currently a system in place for conveying to the insurance side how well those patients turned out.

There are many factors that determine patient outcomes that are out of the control of the provider, which shifts the focus to population health management. Population health is where providers are going to move into taking some risk with reimbursement based out how the outcomes turn out to be. We’re moving into a whole new era because our system has been based on fee for service forever. You do this, you get paid this. Now we’re moving into “You do this, how did it turn out? And if it didn’t meet the quality care standards and metrics that we have set up for you, then you don’t get paid as much or at all.†That’s going to be a big shift that will rock the healthcare world and in particular, physicians. Physicians aren’t set up as well as hospitals. They’re used to saying “Hey I saw 20 patients today,†and they get paid for 20 patients based on the level of care they provided. Now it’s going to be “Well I had 20 patients today and I don’t know what happened to them after I sent them home.†With population health, it’s going to require follow-up from providers to say “How are you doing? Any complications?†Providers have to focus on quality of care in order to get paid.

Let’s say you have a patient who has just had a heart attack, is diabetic, and has high blood pressure. You’ve just put in a heart valve and given them medication, but you can’t help them when they go home. You can’t make sure they take their medication. You can’t make them stop eating sugary desserts every night. These are the kinds of things that will have to be taken into consideration because it’s the patient’s responsibility to take care of themselves on their own. With Truitt Health, we’re ready to take on these challenges and see how we can come up with solutions.

The Importance of Data

In addition, data analytics used to be very weak. We used to have bad data in hospitals. Now, the pressure to have accurate reports is going to be on the rise. If we don’t have accurate reports on how we’re doing financially and how we’re doing clinically when it comes to quality, we’re not going to be able to report. We’re not going to get the reimbursement that we really deserve. We’re entering some really interesting new territory where it will be challenging for providers who have not had to go to this extent to report on: “How did my patient do after they left the office? How did they do after they left the hospital?†It’s going to add some expense because staff, and nurses primarily, will need to follow up with patients after treatment. That’s what Medicare is demanding now. They’re tired of paying for just how many procedures were done. They want to know that they’re paying for a procedure that was done well and had a good outcome. That’s a totally different shift in thinking. I personally think it’s the right way to go but it will be difficult to manage unless we make it easy enough for providers and healthcare systems to report on the outcomes well.

We need to do a review to see where physician practices and hospitals are financially and clinically now when it comes to certain clinical outcomes. We have to make certain recommendations and make sure hospitals are in a better financial position not only to get the IT systems they need, but also to measure population health. There’s a triad there that’s going to be dependent on each other, and we’re prepared to help practices and hospitals prepare for the changes that lie ahead.