The healthcare industry in the U.S. is undergoing dramatic change. Healthcare reform—and most significantly, the Affordable Care Act—continues to reshape the industry, impacting everything from reimbursement models to patient access. At the same time, many healthcare providers are adopting the Triple Aim—an industry framework designed to improve the health of the population, enhance patient experience, and reduce costs.
One of the major impacts of healthcare reform is the movement towards basing healthcare payments on patient outcomes versus fee-for-service, impacting reimbursements back to healthcare providers. These fluctuations are adding pressure to already tight operating margins, driving providers to think innovatively about how to lower costs and increase revenue while improving patient outcomes.
How are they accomplishing this? Here’s a look at some of the top strategies providers are taking to manage and embrace change:
Mergers and Acquisitions. More providers are joining forces in an effort to capture cost synergies and negotiate better deals with hospital suppliers and healthcare payers. Consolidation can also help providers scale to serve larger populations by adding new service lines or strengthening existing ones. It also opens the door to a larger and more varied pool of talent to help care for patients.
New Business Models. Pressure to reduce costs and create better outcomes are driving healthcare providers to explore new business models for how they deliver care and differentiate themselves in an increasingly consumer-like marketplace. Some healthcare systems are even expanding into the insurance business, and developing their own health plans. They are also pursuing partnerships that enable them to expand access and reach a broader group of people. For example, Ochsner Health System is partnering with an emergency care specialist to set up stand-alone emergency rooms in Louisiana, increasing access to emergency medical care services.
Focus on Talent. Throughout the recession, healthcare remained an area of job growth. Today, this growth continues, driven by a greater demand for patient care as a result of healthcare reform and an aging Baby Boomer generation. To win the battle for talent, providers are focusing more on technology solutions and retention strategies that will help them attract, retain, and develop their employees.
To succeed in these efforts, healthcare providers need three critical capabilities: visibility, flexibility, and speed. Providers need a complete view of their organizations and deeper visibility into costs, revenue, and talent to help inform strategic decisions. They also need the flexibility and speed to execute and adapt to mergers, new business models, and other significant organizational changes.
This has been a challenge for many healthcare providers who are held back by legacy ERP systems that are the antithesis of flexible and fast, and were never designed to provide insights into talent and financials. These systems also require major time and resource investment just to keep pace with ongoing updates, making it difficult to take advantage of new technology innovations.
The complexity and opportunity that exists in the healthcare industry are driving more providers to move to modern, cloud-based systems that support finance, supply chain, and HR needs. For the first time, providers can address some basic questions that previously took significant time and effort, including:
Having access to real-time data about the business, such as spend—whether it’s costs associated with procedures, purchasing supplies, or employee compensation—can help providers better understand where to invest in services and care.
A number of Workday healthcare customers are in the middle of significant changes and a modern, cloud-based system is helping them to more quickly adapt. For example, when Rochester General merged with Unity Health, the combined organization—Rochester Regional Health—was able to standardize on Workday Human Capital Management, rolling out standardized benefits and gaining efficiencies through common processes.
We’ve also heard from our healthcare customers that since moving to Workday they’ve been able to better standardize processes and practices across the organization, such as how they deliver care, manage costs, and recruit employees. Employees are able to spend more time on patient care and outcomes and less time on administrative tasks.
We’re still at the beginning of absorbing major changes in the healthcare industry, and providers need to be ready to adapt and leverage these changes as quickly as possible. Every organization needs to take a close look at its business technology infrastructure and determine whether it’ll be a hindrance, or a foundation of support and delivery.