Healthcare: counting on change
Adaptation to new rules amid a rapidly changing economy is nothing new. For instance, earlier this century businesses had to overhaul accounting processes with the Sarbanes-Oxley Act. The Sherman and Clayton acts ultimately led to the Federal Trade Commission, which regulates monopolies. Businesses of all sizes were affected by these rules, some favorably, and some less than favorably.
Whether you support the Affordable Care Act or not, new regulations are coming to the healthcare industry as a whole, which has had a number of issues over the last few decades, not limited to skyrocketing costs and a rapidly aging population. Now, more than ever, the leadership teams of healthcare organizations must adapt. They’re being forced to figure out how to make money with a new business model. Currently, healthcare organizations are financially compensated for the number of occupied beds in their facilities. The longer that patients stay, the more money they are reimbursed for– obviously not the best incentive model for excellent care.
The new model will reward organizations for providing quality care in the shortest time and most efficient manner. In this setup, reimbursements will be the same for each illness or procedure, no matter how long a patient stays or which technology is used to help patients heal faster. According to Moody’s, the new model encourages value-based purchasing rather than the use of more services. This changes in the model will alter every corner of care and shift how employees work and get rewarded. Healthcare companies are playing a game where the rules won’t be the same next year and we can’t yet predict anything about the future. What we can count on is change. This affects long term care, mental care and acute care alike.
In our history, The Oliver Group has worked with many healthcare organizations with varying differentiators: one might be strong in driving innovation, another might be best in patient satisfaction, while another might be a top quality organization. All of those items are still important, but the most important new differentiator for healthcare organizations is the ability to adapt to all of the changes reform will bring. Those organizations that adapt to change and help employees adapt will be the ones that find future success.