Will Upcoming HHS Regs Push Hospitals Closer to Radical Interoperability? | Deloitte US has been saved
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By Steve Burrill, vice chairman, US health care leader, Deloitte LLP
As I meet with hospital and health system executives, I hear a good bit of confusion about the future of health. When I bring up the topic, people often think I’m talking about where health care is headed. Care is the process of managing and treating illness and healing injuries, and it is just one component of the future of health, which is a broad and transformative concept. The future of health, as defined in Forces of change: The future of health, is an innovative departure from what we have historically known as health care.
This future of health, however, likely can’t be achieved unless radically interoperable health data gives stakeholders the ability to access, mine, and share vast troves of patient data that give us new insight into prevention. In February, the US Department of Health and Human Services (HHS) Office of the National Coordinator for Health Information Technology (ONC) released proposed rules aimed at driving the US health care system toward greater interoperability of electronic health records (EHRs). We expect the administration will finalize these rules this fall—many of the provisions would go into effect on January 1 (see the July 2, 2019 My Take from my colleague, Anne Phelps).
The Deloitte Center for Health Solutions recently surveyed technology leaders from health systems and large health plans to determine how prepared they are for the anticipated regulations (we’ll publish the findings next month—make sure you are subscribed to access the full findings of the study, launching as a two-part series at the end of August and October). As I noted in my March My Take, some hospitals and health systems have trouble sharing electronic data between departments, let alone figuring out how to share it with physician offices, other hospitals, health plans, or even with patients. But our respondents said they expect to be ready when the new rules go into effect. Most (63 percent) of health plan respondents and nearly half (43 percent) of health system leaders say they plan to use the compliance requirements as part of their broader strategy around interoperability. Many of them intend to use the proposed rules as a foundation for their broader strategic interoperability initiatives.
The anticipated regs—combined with new payment models such as the Trusted Exchange Framework and Common Agreement (TEFCA) and a recent executive order on cost transparency—could drive hospitals and the entire health sector toward widespread interoperability. Organizations that develop and implement a strategic approach to interoperability are likely to have a competitive advantage with insights, affordability, and consumer engagement.
Hospitals might need to adjust to having fewer inpatients
Over the past several years, many hospitals and health systems have been seeing fewer inpatient visits as more patients turn to lower-cost outpatient facilities for surgical procedures. Between 1995 and 2016, aggregate hospital revenue from outpatient services grew from 30 percent to 47 percent, according to research we published last year.
While hospital inpatient stays fell 6.6 percent, visits to outpatient facilities increased 14 percent, according to Deloitte research. This change occurred despite population growth and demographic shifts (such as an increasingly older and sicker Medicare population). Some of this shift has been driven by patient preference and clinical and technological advances such as minimally invasive surgical procedures and new anesthesia techniques that reduce complications and allow patients to return home sooner.
Not only do we expect patient volume will continue to decline, hospitals and health systems of the future will have a strong financial incentive to keep patients from being admitted. Revenue will likely be generated by healthy patients who never step foot in the hospital. In response, hospitals will likely place greater emphasis on health and well-being. Twenty years from now, we anticipate that most hospitals will have fewer beds and fewer in-patient surgical suites than they do today. Hospitals, clinicians and health plans will work collectively and holistically with each other (and with the patients themselves) to ensure health and well-being.
How should hospitals prepare for the future of health?
Intellectually, most everyone agrees that we should pay closer attention to wellness and prevention. But there has not been much of a financial incentive tied to helping patients avoid services. Hospitals have been successful under the fee-for-service (FFS) model—due in part to a growing population. However, payments for value are taking hold and are strongly supported by HHS and US Centers for Medicare and Medicaid Services (CMS). Focusing on value (or prevention and wellness) along with radically interoperable data will be important for the future of heath.
When I meet with hospital executives, the transition from inpatient services to outpatient facilities, virtual interactions, and hospitals without beds are regular topics of discussion. Some hospitals are already making strategic decisions based on where the industry might be 10 or 20 years from now. Some are investing in outpatient buildings, rather than building new hospital towers. While new hospitals are being built, it is usually with fewer beds than we would have seen a few years ago.
The imminent interoperability regs could be a critical component in the future of health. Artificial intelligence (AI), robotic process automation, and other emerging technologies could allow health plans to sift through massive volumes of claims data, electronic health records, and information generated by fitness apps and wearable devices. The combination of health systems, health plans, and patients can create a three-legged stool of health insight. By working closely with clinicians, health plans might be able to direct members to early preventive measures that help them avoid illness.
If the future of health follows the trajectory that we envision, the incidence of illness will shrink, although the need for care will never completely disappear regardless of how much emphasis we place on prevention and early detection. But in the future, health care will likely only be needed when other components of the health system fail.