In a recently published book, The Seventh Sense, Joshua Cooper Ramo discusses how society is rapidly moving to a constantly connected networked world but world leadership is still trying to solve the military, economic, and other challenges with solutions based on old models and experiences. Ramo’s perspective is that business and political leaders need to quickly change their thinking to reflect the new realities or there will be increasing chaos and instability. Ramo’s description certainly applies to the healthcare industry. The fee-for-service (FFS) environment is healthcare’s analog world and the industry is moving rapidly to a networked world built around value. Unfortunately, healthcare’s leaders are still often making decisions rooted in traditional thinking.
I recently met with an industry leader and we discussed the evolving change from FFS to value-based payments (VBP). We talked about the impact that the shift was having on healthcare organizations. We agreed that a major challenge is not just the change to VBP but the operational, technical, and resource complexities of managing a hybrid world of FFS and VBP.
Unfortunately, one can’t flip a switch to move to VBP-- so the industry struggles to survive in a hybrid environment- something that policymakers did not fully envision when mandating new payment rules. Here are examples of challenges faced by healthcare organizations trying to balance old and new requirements:
- Legacy platforms supporting FFS claims-based systems still require significant investments to maintain. Simultaneously, there is need for value-based business models that require much more flexible platforms to support new care models and data requirements.
- Security and privacy frameworks based largely on 20-year-old HIPAA legislation are not adequate to meet today’s new vulnerabilities created by the increasing amounts of data generated from a variety of sources and requirements to share that data more widely and timely.
- Today’s fraud prevention models are largely focused on claims edits and reviews but will become much less relevant in a VBP world that will not rely on claims for payment, at least not service-based claims.
- Members and patients are now interacting with providers and health plans in a variety of new ways including social media and mobile but call centers and fax are still needed.
Challenges of a hybrid world not only include supporting multiple platforms but also getting timely and sufficient resources and budgets needed to evolve intelligently rather than in a patchwork, bolt-on fashion.
What advice can we give to the healthcare business and technology leaders? Unfortunately, there are no easy answers. One way to prepare is to envision requirements needed to support the world of 2026 or 2021 and work backward. While there will continue to be policy changes, the outline of tomorrow’s payment systems is pretty clear. Looking ahead can help determine the timing and extent of business and IT changes, budget and resources required etc. Policymakers need to discuss with stakeholders the technical and operational impact of a hybrid environment and how quickly changes can occur, given those constraints.
About the author: As IBM’s Global Health Team’s CHIO, Tony leads the global team’s efforts to support commercial health plan clients. Tony joined IBM in 2014 from the Centers for Medicare and Medicaid Services (CMS) where he was the CIO and Director of the Office of Information Services. Tony also serves as Chair on the HIMSS Health Technology Solutions Task Force.