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More unintended consequences of healthcare reform

December 3rd, 2013

by Jonathan H. Burroughs

Following up from last week, let's resume our list of healthcare reform's unintended consequences for healthcare leaders.

3. Medicare reform

In response to political and economic pressures to expand Medicaid and the growing numbers of Medicare beneficiaries with the boomers, the Centers for Medicare and Medicaid Services and states are working to create meaningful incentives through cost-sharing, means testing and sliding scale payments based upon behavior-related healthcare choices (e.g., not smoking, committing to a regular exercise program).

Healthcare organizations increasingly partner with large employers, third-party payers and patients to create population health and wellness programs that significantly impact both quality outcomes and cost of care. Providing a wide array of nutritional options, exercise facilities and time to utilize them, smoking cessation programs, child care, and addiction rehabilitation programs have been found affect the cost of insurance, particularly for the elderly.


Moreover, 5 percent of Medicare beneficiaries make up 49 percent of total Medicare costs due to the high cost of managing chronic diseases through reactive sickness treatments rather than proactive management and prevention. Rigorous disease management, particularly for high-risk populations and the elderly are essential as well as the wide spread utilization of palliative services for those with end-stage disease and end-of-life care.

The challenge with implementing viable disease management programs is they require a significant horizontally integrated healthcare network that includes: primary care, nurse navigators electronic health information exchange, home health with telemonitoring, nursing homes and seamless communication systems that many stand-alones do not have the capital to support.

4. Reimbursement reform

Pay for value has created a self-limited regulatory industry in which once organizations attain the targets (e.g., core or surgical care improvement project measures, HCAHPS, etc.), the targets are no longer useful.

Thus pay for value is a moving target in which metrics and targets will continually evolve based upon the next important stretch goal. Hence, in 2014, CMS will reduce the percentage weight of core measures from 70 percent to 45 percent, and will replace the difference with “healthcare outcomes” that have not been fully defined.

Most healthcare practitioners will tell you pay-for-value measures make up a small part of what they would define as quality and yet 11 million to 14 million beneficiaries, employers, third-party payers and managed care organizations access this data monthly through online sources and base their healthcare and network referral decisions upon them.

Healthcare organizations must standardize their processes (with the medical staff's blessing) to achieve 100 percent compliance with regulatory quality 100 percent of the time. This cannot be done through optimizing individual performance as has been demonstrated in the military, nuclear regulatory, airline and other high-risk industries.

A culture of process improvement will not only follow the moving target of regulatory compliance and pay for value but also will achieve lower costs through continual redesign and innovation. For instance, many organizations are replacing physicians and nurses with clinically trained coders to perform documentation and data entry, which enhances productivity, satisfaction and return on net accounts receivable.

Customer satisfaction and loyalty is similarly addressed through standardizing communication (e.g., scripts) and care processes so patients and customers receive the same high level of service and care every hour of every day. Again, this can be accomplished through the judicious use of non-physicians and nurses who have the time to dedicate to enhanced patient communication and customization. Again, full physician integration and alignment is necessary to accomplish these goals.


The Affordable Care Act was created to enhance quality and access, lower cost, secure coverage for the un or under insured, extend the life of Medicare, and prohibit denial of coverage based upon pre-existing conditions. The law of unintended consequences has proven once again that intent does not equal impact and that healthcare leaders will need to continue to innovate their healthcare systems on the ground to ensure they can respond to economic and quality exigencies in a responsive and adaptive way while the private and public sectors seek better tools to guide the necessary changes that must occur to create the healthcare system that we deserve.

Jonathan H. Burroughs, MD, MBA, FACHE, FACPE is a certified physician executive and a fellow of the American College of Physician Executives and the American College of Healthcare Executives. He also is president and CEO of The Burroughs Healthcare Consulting Network.


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