‘Ev­ery­body feels they have to redo or dust off their strate­gic plan’

Modern Healthcare - - Q&A -

Over the past decade, the top lead­er­ship of the na­tion’s hos­pi­tals for­mu­lated their business plans on the twin premises that more peo­ple would have com­pre­hen­sive health in­sur­ance and that the re­im­burse­ment sys­tem was mov­ing in­ex­orably to­ward value-based pay­ment. Mod­ern Health­care re­porter Steven Ross John­son re­cently asked Amer­i­can Hospi­tal As­so­ci­a­tion CEO Rick Pol­lack what im­pact the elec­tion will have on those ba­sic as­sump­tions. The fol­low­ing is an edited tran­script.

Mod­ern Health­care: What do you be­lieve are the great­est chal­lenges for hos­pi­tals un­der a Trump ad­min­is­tra­tion?

Rick Pol­lack: As we be­gin a new ad­min­is­tra­tion and a new Congress and a whole new set of po­lit­i­cal dy­nam­ics, there’s ob­vi­ously a lot of un­cer­tainty. Un­cer­tainty brings chal­lenges about fore­cast­ing where things are go­ing to be. Ev­ery­body in the field feels they have to redo or dust off their strate­gic plan given that un­cer­tainty.

The other chal­lenge, given the new po­lit­i­cal en­vi­ron­ment, is what is go­ing to hap­pen to the cov­er­age ex­pan­sions? As we see peo­ple ex­am­ine the Af­ford­able Care Act, we’ve got about 21 mil­lion folks who have been ex­tended cov­er­age un­der that law. That is­sue will be of great con­cern to us. How do we main­tain cov­er­age for those mil­lions of Amer­i­cans? That’s the chal­lenge.

MH: Do you see any op­por­tu­ni­ties?

Pol­lack: In this new po­lit­i­cal en­vi­ron­ment, the whole is­sue of reg­u­la­tory re­form is some­thing that be­comes a pri­or­ity to this ad­min­is­tra­tion. We share that pri­or­ity. And the notion of try­ing to elim­i­nate reg­u­la­tory bar­ri­ers that get in the way of clin­i­cal in­te­gra­tion, the op­por­tu­nity to elim­i­nate the du­pli­ca­tion of au­dit pro­cesses that our hos­pi­tals are sub­jected to. There are a lot of re­dun­dan­cies there.

We need flex­i­bil­ity in how we tran­si­tion to mean­ing­ful use Stage 3 and flex­i­bil­ity in how we tran­si­tion to the new physi­cian pay­ment sys­tem. There are also op­por­tu­ni­ties for re­forms of how the process deals with an­titrust. The Smarter Act (the Stan­dard Merger and Ac­qui­si­tion Re­views Through Equal Rules Act that would har­mo­nize the pro­cesses used by the U.S. Jus­tice De­part­ment and the Fed­eral Trade Com­mis­sion for chal­leng­ing merg­ers), which was passed by the Repub­li­can-con­trolled House, is some­thing that we would hope would get more at­ten­tion.

There’s op­por­tu­nity in ad­dress­ing drug pric­ing. Pres­i­dent-elect Trump cer­tainly said that was on his to-do list. On the is­sue of men­tal health leg­is­la­tion, we’ve got a bill that’s passed the House and is pend­ing in the Se­nate, which of­fers an op­por­tu­nity to get that done. And then I think there will also be op­por­tu­ni­ties in the whole arena of pro­mot­ing in­no­va­tion in terms of ex­pand­ing op­por­tu­ni­ties for tele­health, pro­mot­ing in­ter­op­er­abil­ity of electronic health records, de­vel­op­ing new care mod­els to serve vul­ner­a­ble pop­u­la­tions in communities that are ex­pe­ri­enc­ing eco­nomic prob­lems, and train­ing the next gen­er­a­tion of care­givers.

MH: A grow­ing num­ber of hos­pi­tals in re­cent years have looked at ad­dress­ing non­clin­i­cal so­cial fac­tors such as home­less­ness, poverty and food in­se­cu­rity as a means of help­ing cer­tain pop­u­la­tions that have poor health out­comes. Where do you see such ef­forts go­ing if the Af­ford­able Care Act is re­pealed or rad­i­cally changed?

Pol­lack: How do you provide new care mod­els to al­low hos­pi­tals to be lead­ers as an an­chor of

“The move­ment from fee-for-ser­vice to fee-for-value—I don’t see that move­ment be­ing cur­tailed. I don’t see that be­ing re­pealed.”

“Hos­pi­tals, be­cause of who we are and the role we play, are al­ways go­ing to be con­sulted.”

ser­vice or an ac­cess point in ar­eas in which the area is re­ally suf­fer­ing and the hospi­tal is re­ally chal­lenged? Hos­pi­tals need to look at new mod­els.

When you look at the Af­ford­able Care Act, there’s a por­tion of it that is ob­vi­ously fo­cused on ex­tend­ing cov­er­age to the unin­sured. That’s been the most con­tro­ver­sial part. But there’s an­other fo­cus in the ACA re­lated to de­liv­ery sys­tem re­form and the move­ment from fee-for-ser­vice to fee-for-value. I don’t see that move­ment be­ing cur­tailed. I don’t see that be­ing re­pealed.

As we move from fee-for-ser­vice to fee-for-value and new pay­ment sys­tems in which peo­ple are tak­ing re­spon­si­bil­ity for at­trib­uted pop­u­la­tions or peo­ple are tak­ing re­spon­si­bil­ity for bun­dles of care, the is­sue of so­cial de­ter­mi­nants of health will still be out there and will still be im­por­tant. Eighty per­cent of all health­care spend­ing is dic­tated by var­i­ous so­cial de­ter­mi­nants of health. So the need to ad­dress that is­sue will re­main.

MH: Hos­pi­tals are not get­ting paid for the costs of th­ese ser­vices. Do you think the pay­ment struc­ture will ac­knowl­edge those ef­forts?

Pol­lack: Hos­pi­tals al­ready do a lot of those types of things as part of their obli­ga­tions for com­mu­nity ben­e­fit. We’ve got mem­bers that have set up gro­cery stores in food deserts and put cook­ing classes on the sec­ond floor in an ef­fort to make sure that peo­ple don’t only have ac­cess to fresh foods, but also those that are suf­fer­ing from things like di­a­betes or hy­per­ten­sion or obe­sity can ac­tu­ally learn for them­selves how proper nutri­tion would work.

When it comes to pay­ment, hos­pi­tals are tak­ing more re­spon­si­bil­ity, whether it’s a bun­dle, whether it’s an ac­count­able care or­ga­ni­za­tion, whether it’s be­com­ing a health plan, whether it’s some other new model. We need risk ad­just­ment. Pay­ment needs to be built in a more re­fined way that takes into ac­count the very dif­fer­ent pop­u­la­tions that we care for.

MH: When it comes to val­ue­based re­im­burse­ment, which pro­grams are ef­fec­tive and which are not?

Pol­lack: The jury is still out in terms of ef­fec­tive­ness. Direc­tion­ally, the whole notion of ac­count­able care or­ga­ni­za­tions and bundling has cer­tainly been con­sis­tent with the notion of clin­i­cal in­te­gra­tion and team­work and co­or­di­nat­ing care and putting the right in­cen­tives to keep peo­ple healthy. How has it played out on the ground? It’s been un­even be­cause of prob­lems as­so­ci­ated with risk ad­just­ment.

It’s also been un­even be­cause of prob­lems as­so­ci­ated with the data be­ing avail­able to peo­ple in a timely way to re­ally man­age and co­or­di­nate the care. We’ve had some suc­cesses. We’ve had some peo­ple who have dropped out be­cause it hasn’t been suc­cess­ful.

One of the key things we have to keep in mind dur­ing this pe­riod of enor­mous change is that we need a lit­tle bit of pac­ing. As soon as, for in­stance, we saw the Com­pre­hen­sive Care for Joint Re­place­ment bundling ini­tia­tive come out, right on top of that we saw the car­diac bundling ini­tia­tive come out, and this is in the midst of try­ing to get ready for the next stage of IT. And it’s in the midst of get­ting ready for MACRA im­ple­men­ta­tion.

One of the is­sues here is the pace of change. Some of th­ese ini­tia­tives have come too fast too soon, and some have been ex­panded and been made manda­tory be­fore we have proof that we know that it is, in fact, ef­fec­tive.

MH: How have hos­pi­tals fared fi­nan­cially in the shift away from fee-for-ser­vice?

Pol­lack: It’s hard to make a gen­er­al­iza­tion around that. It varies across the coun­try.

MH: What do you think of the new rules per­tain­ing to CMS pay­ment for ser­vices de­liv­ered at hos­pi­tals’ off-cam­pus fa­cil­i­ties?

Pol­lack: The pro­posed rule ba­si­cally said that new out­pa­tient fa­cil­i­ties would re­ceive no pay­ment. The fi­nal rule pro­vided pay­ment to hos­pi­tals for those fa­cil­ity fees, al­beit at the level that is pro­vided to a physi­cian of­fice or an am­bu­la­tory-care clinic. We def­i­nitely made progress, but in our view hospi­tal out­pa­tient fa­cil­i­ties do, in fact, de­serve a higher pay­ment rate.

We have a much higher level of reg­u­la­tory ac­count­abil­ity. We take care of any pa­tient who walks through the door 24/7. We have seen re­search that has demon­strated that our pa­tient mix is much sicker and more com­pli­cated than those that are seen in other set­tings.

So for us, this whole is­sue of site-neu­tral is very prob­lem­atic and of con­cern. There are still statu­tory changes that need to take place that ei­ther the rule didn’t ad­dress or ig­nored.

MH: How are hos­pi­tals pre­par­ing for the pos­si­bil­ity that they may see more un­com­pen­sated-care pa­tients due to a loss of cov­er­age?

Pol­lack: We’re in the top of the first in­ning in the game. We’ve al­ready seen peo­ple be­gin to sug­gest that maybe there needs to be phase-ins; that we can’t just pull the plug on 21 mil­lion peo­ple. We cer­tainly agree with that. It’s a very, very fluid sit­u­a­tion. We don’t ex­actly know how this is go­ing to play out. For our mem­bers, the key is mak­ing sure that the 21 or so mil­lion peo­ple who were ex­tended cov­er­age are still pro­tected.

MH: Has hos­pi­tals’ role changed in light of Trump’s win?

Pol­lack: No. It’s the same. Hos­pi­tals are lo­cated in every single state and con­gres­sional dis­trict. We’re of­ten the largest em­ployer in the com­mu­nity. We are pil­lars of those communities, and we are key stake­hold­ers.

I’ve been around long enough to go through many dif­fer­ent changes in ad­min­is­tra­tions and mul­ti­ple ef­forts re­lated to dif­fer­ent re­forms. Hos­pi­tals, be­cause of who we are and the role we play, are al­ways go­ing to be con­sulted.

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