Strategies for the future

Lately I have become keenly aware of an absence of strategic direction and a lack of awareness of current and future changes to healthcare delivery.

I am perplexed by the call to action and direction that I see every day. I have come to the conclusion that while PPACA has fundamentally changed most of healthcare as we know it, reimbursement is still the same old, same old. My forecast is that as long as fee-for-service is the dominant methodology of payment, we will not see a great deal of true strategic change.

I believe that the healthcare industry denial of this reality will ultimately be the downfall of many institutions and providers. Reimbursement methodologies must change because projected volumes and utilization trends will force both cost up and price down.

Is your organization prepared strategically and operationally to lead during this change, or to follow and try to catch up?

I believe that there are four strategic positions that every healthcare organization needs to consider, then operationalize within a significantly short time frame of 18 – 24 months. They are:

The First Strategy is simple – Close the Back Door. Organizations have spent millions of dollars attempting to reduce costs and optimize service. With new reimbursement on the horizon, managing cost will remain critical. The second part of Closing the Back Door is evaluating your revenue sources to ensure that they are at levels that your organization can maintain, and margins that will weather the storms of healthcare reform. Most of the reimbursement shift of the future should be revenue neutral to prepaid services.

The Second Strategy – Population Management. Develop methodologies that put the institution into the business of managing a population. In this new environment, you will be asked to manage the population’s behavior and quality of service to a lower cost. The last thing you want is a member in a bed utilizing high cost resources. Manage the population to healthier, less costly services. A tactic here would be to set up care teams that engage skilled providers for their quality using a vast array of sophisticated data analytics. The delivery system must be prepared.

The Third Strategy – Consumerism. Two segments, Employers and Employee. Employers are beginning to require employees to take control of their own lifestyle decisions, and as such, writing benefit plans to motivate individuals that do not comply with Quality Standards, i.e., smoking, obesity, hypertension, and diabetes, to mention a few. The second part to Consumerism is that the employee, including spouse and dependents, must take an active role in managing their health and lifestyles making healthy decisions, and complying with management of their diseases.

The Fourth Strategy – Reimbursement or the Retail Space. The reimbursement methodology will change and preparations are required for a number of tactics, but overall, you will take on the management of defined populations for a specific prepaid fee. Operationally, you will need a network of Care Teams, ability to establish a solid pre-existing cost for the historical services delivered for the defined population, and the predicted price of future care.

I have outlined a number of strategic choices. As a leader ask yourself where you see healthcare going? What is your organization doing to prepare? And is your organization in denial or is it ready?


Neil Godbey Portrait

Neil Godbey

Neil Godbey is President of The Godbey Group, Irving, Texas. Since 1999 The Godbey Group has been helping leading hospitals and healthcare systems negotiate favorable managed care and value-based contracts.