American Healthcare: A State of Flux

The United States possibly has the most complex healthcare system in the world. The American healthcare system regulates the industry at both the federal and state level. It is paid for by private health insurance as well as from the government under its Medicare and Medicaid programs. Healthcare services are provided by the private sector; by both for-profit and non-profit entities, however; the government also provides services directly through the Veterans Administration. All of this, in a population with disparate levels of wealthy and poor citizens, leads to highly chaotic distribution of care and a complex payment system. Some facilities reap the benefits of bespoke medical furniture whereas some only have the basic requirements.

While half of all Americans receive healthcare coverage through their employers, the plans are subject to crushing regulations both federally and at the state level. Those Americans receiving healthcare coverage through Medicare and Medicaid, subject the provider to lower reimbursements.  As a result, providers are less willing to take on Medicare and Medicaid patients, leading to a shortage of providers for that patient base. Patients that are not covered by their employer or a federally provided healthcare program are required to seek private insurance. However, because of the Patient Practice and Affordable Care Act (PPACA), patients are provided limited options and those options greatly restrict their choices regarding providers.

Because of a more recent development, a totally different method of reimbursement to providers, from fee for service or volume payments, to outcome based reimbursements or Value Based Care (VBC) is being encouraged by both Centers for Medicare and Medicaid (CMS) and by private insurers. Essentially, fees for services under VBC are paid based on case outcome and the payment must be shared by all providers in the continuum.  VBC reimbursement was originally introduced by the CMS. However private insurers are moving in the direction of value based reimbursement and providing incentives to healthcare providers to participate. What is essential to succeed in the VBC method of reimbursement lie in integration of providers and the ability to aggregate data.

Even prior to the movement to VBC, the PPACA is requiring all practitioners to utilize Electronic Medical Records, (EMR) which is costly in both software acquisition as well as implementation. While a burden to small practitioners and other small providers, EMR will ultimately allow participants in the continuum to operate, integrate and bill more efficiently.

Adding to the complexity of the American Healthcare system is the attempts to repeal of the PPACA. The potential of repeal is having the greatest impact on the insurance industry, impacting the cost of insurance, as subsidies provided by the federal government are uncertain depending on the success of repeal and its subsequent replacement.

CFO Consulting Partners’ healthcare practice is here to help you. We can assist you to access your current situation and help you create and implement a plan forward that will help insulate your practice as the rapid changes within the industry unfold.