ALM Intelligence: Trends in Healthcare—The AHCA Impact

As we inch closer to seeing how the House-approved American Health Care Act (AHCA) will shape American healthcare, there is still much uncertainty.  The bill will surely see changes as it goes through the Senate but there are some clear paths that consultants are taking with their clients in anticipation and preparation.

As West Monroe’s Healthcare and Life Sciences practice leader and managing director, Will Hinde, described to ALM Intelligence recently, “If regulatory changes take hold (i.e. changes to plan designs, competition across state borders), they will likely have a substantial impact on our clients who we will partner with to ensure regulatory compliance and implement any needed business changes. We believe that regardless of the regulatory environment, the industry will continue to focus on administrative cost reduction, improved customer experience, digital, analytics, and innovation.”

So what does this mean in practice for healthcare consultants and their clients? ALM anticipates that healthcare clients will seek advisory in several areas that are “within their control” to manage while awaiting impending AHCA policy including Strategy and Operations, Digital, and Analytics, with technology underpinning all initiatives.

S&O with more than just a splash of Digital

A major consulting focus will be helping clients to further invest in a consumer-driven market where innovative models of care delivery and patient access will be essential to differentiating services and ultimate success. The Annual Healthcare CEO Survey conducted by the Advisory Board of 183 provider CEOs and other C-suite executives found that 57% wanted to boost their ambulatory (outpatient) care offerings.  That is up from 40% just a year ago. Regardless of forthcoming regulatory changes, the push toward consumerism has unstoppable momentum as consumers demand flexibility, affordability, and pricing transparency like never before.  Leading providers will be seeking as many patient touchpoints (urgent care, retail clinics, telemedicine, websites, mobile apps, remote digital technology, etc.) as possible to ensure competitive advantage, “lock in” customers first, and gain customer loyalty.

As organizations embark on these consumer initiatives, they must also focus on cost-cutting strategies and cost optimization as they deal with potential loss of revenues from AHCA policy changes.  With looming cuts to public reimbursement (Medicaid funding reductions) and the possibility of significantly higher premiums for a subset of those with pre-existing conditions (in states that apply for a waiver), providers’ ability to absorb more uninsured and underinsured will be necessary. It is important that hospital systems consider reducing as many fixed costs as possible during this time. New capital investments in IT will be evaluated and more flexible options such as cloud and mobile solutions will be assessed.

Data-driven analytics will pave the way

The role of analytics going forward cannot be overstated.  As providers and payers look to work together to improve quality outcomes and to identify at-risk patients through population health programs, analytics tools will be critical components of the equation.  As Bruce Carver, Associate Vice President of Payer Services, MedeAnalytics, explains, “Regardless of what happens next [with AHCA legislation], collaboration between payers and providers around how to improve outcomes (quality) and reduce costs must be a priority.

In an uncertain climate, at least these things are “good bets”.  As the legislation winds its way through the Senate and back to the House before making its way to the President, the healthcare industry can carry on by focusing on consumer-driven market initiatives such as outpatient care and improving patient touchpoints by offering a multitude of affordable, flexible and price-friendly options, reducing costs wherever possible to offset possible revenue reductions in public funding, and incorporating analytics tools to assess population data most effectively. Consultants will have their hands full in laying a solid foundation, and if the AHCA is turned into law, there will be new regulations to contend with. All in a day’s work.

Laura Becker is Industry Analyst, Consulting Research for ALM Intelligence.