If you asked healthcare consulting leaders to list the industry’s top challenges at any point in the past decade, you’d hear a litany of thorny issues: the Affordable Care Act, razor-thin profit margins, ICD-10 compliance, patient safety, the physician supply, HIPAA, legacy technology, revenue cycle optimization, electronic health records (EHR), interoperability, MACRA and much more.
Ask the same question today, and it’s a safe bet you’ll hear only one word: cost.
“It’s the price of healthcare,” says Matt Porta, Vice President, Watson Health Consulting with IBM. “We talk to administrators of health and the leaders of health systems in many countries, including the U.S., and the cost of care is the number one issue.”
A growing challenge for decades, rising care costs have become a critical matter with social and economic risks that extend beyond the confines of an industry (the country’s largest) being reshaped by new entrants and consolidation.
“Everyone is concerned about medical costs, premiums, and affordability,” asserts Deloitte Vice Chairman, US Life Sciences & Health Care Industry Leader Bill Copeland.
Most healthcare consulting experts point to value-based care (through which providers are based on the outcomes, rather than the volume, of the services) as a lynchpin in any approach that effectively addresses healthcare’s unstainable cost. However, the ongoing move to that model will take years – in part because so many of that litany of challenges from the past 10 years—interoperability, especially—still exist today. New challenges also exist.
This Time It’s Serious
Vivid examples of at least one of these new challenges—what healthcare experts tend to refer to as consumerism—materialized in January. That’s when CVS Health announced its intent to purchase Aetna for $69 billion. That’s also when Amazon, JP Morgan Chase & Company, and Berkshire Hathaway announced plans to create a new organization dedicated to doing for a combined 1 million or so employees what the healthcare industry has yet to do: reduce costs and improve patient satisfaction.
“Non-traditional payers and providers are getting into the game, trying to get closer to the consumer, and they may be starting to tip the scales,” notes Cumberland Consulting Group CEO Brian Cahill. He and part of his firm have discussed whether employers may become customers down the road. Cross-industry convergence tends to occur, Copeland notes, when “consumers are not getting what they need.”
Read the full article by Eric Krell in the June 2018 issue of Consulting magazine here: http://www.consultingmag.com/2018/06/08/the-cost-of-care/