By Chris Jaeger, head of ACO and health system strategy, AristaMD.
Rural hospitals are facing severe challenges in maintaining operating margin, with uncompensated care being a major factor. Telehealth eConsult platform use in local primary care settings to improve “right time, right place, right provider care” have been shown to decrease the number of patients receiving avoidable and unnecessary care within the hospital setting, thus supporting hospital’s ability to mitigate uncompensated care.
Uncompensated care is an overall measure of hospital care provided for which payment was not received from the patient or payer group. It equates to the sum of a hospital’s bad debt — the financial assistance it provides. Financial assistance includes care for which hospitals never expected to be reimbursed and care provided at a reduced cost for those in need. A hospital incurs bad debt when it cannot obtain re-imbursement for care provided; this happens when patients are unable to pay their bills, but do not apply for financial assistance, or are unwilling to pay their bills.
Hospitals, both nonprofit and for-profit, provide uncompensated care for individuals who are uninsured and under insured.
Though there has been a noted decline in uncompensated care since the 2014 passage of the Affordable Care Act and Medicaid expansion, this has not carried over to states not part of the expansion. States that expanded Medicaid to low-income adults under the ACA recognized a 47 percent decrease in uncompensated care costs, on average, compared to an 11 percent decrease in states that did not expand Medicaid.
(Coverage map as of Feb 2019)
Uncompensated care and dropping revenue margins are causing hospitals, especially in rural areas, to close. “While Medicaid expansion has improved all hospitals’ operating margins and total margins, the effect was particularly pronounced in rural areas,” noted a report from the Center on Budget and Policy Priorities. A recent study by the North Carolina Rural Health Research Program (NC-RHRP) at the University of North Carolina Cecil G. Sheps Center for Health Services Research (UNC-CH) showed that since 2010, 89 rural hospitals in 26 states have closed.
Much of this uncompensated care could be prevented through primary care intervention. A report, released by Premier, found that six common chronic conditions accounted for 60 percent of 24 million Emergency Department (ED) visits in 2017; out of that 60 percent, approximately one third of the visits (4.3 million) were likely preventable and could be treated in a less expensive outpatient setting.
If it isn’t already clear, the headlines are signaling that the era of healthcare innovation is upon us and moving swiftly. Managed Medicaid plans could be losing out on millions of contracted lives (and money) by lagging in the adoption of digital telehealth resources to improve access to care and patient outcomes. Leveraging an eConsult solution is a proven way to increase access to high-quality care while lowering system cost, ensuring innovation scoring opportunities are not missed.
Innovation is the new constant
Although the pace of innovation in healthcare has traditionally been slow, organizations are increasingly seeking new ways to innovate in order to support value-based care models. Recent partnerships formed between Amazon, Berkshire Hathaway and JPMorgan Chase, CVS and Aetna, Cigna and Express Scripts, and so on strongly indicate that innovations rooted in providing better care for lower costs are paramount to the success and growth of healthcare.
Payers whose ongoing strategies are not placing precedence upon innovation will be left in the dust. Not only will this be costly for access and quality, it can jeopardize managed Medicaid payers’ chance of re-procuring and expanding contracts.
Managed Medicaid Plans must innovate to reach objectives
Managed Medicaid plans need innovations to improve the value and efficiency of healthcare provided. To ensure they’re getting the best value, state Medicaid programs re-procure contracts with managed care payer groups on a perpetual basis — sometimes as frequently as every three years. States use these periods as an opportunity to seek updated solutions to long-standing or emerging challenges, often assigning points to questions that speak to innovations in care delivery for Medicaid recipients.
Key Medicaid challenges
Barriers to care and access within Medicaid programs are often among the most important issues states and managed care plans are attempting to address. The Kaiser Family Foundation 2017 survey of Medicaid managed care plans reported high rates of difficulty in recruitment for some specialties and listed provider supply as a leading challenge.
Timely access to care is key to healthcare goals, as delays in accessing necessary care exacerbate health conditions, in turn leading to more costly treatment and poor outcomes. This lack of care access worsens a health crisis that could have been easily avoided with more proactive (and less expensive) care.
A key takeaway from 2018’s 11th annual Medicaid Managed Care Summit was that, “Reforming healthcare in the U.S. is not about spending more money, but about moving around the dollars that we’re already spending.” Adoption of eConsult platforms allows health plans to solidify their value-based initiatives and Medicaid payers to expand access to needed specialist services, bring new physician access points to urban and rural areas and leverage the latest in technology and sophisticated referral protocols to help meet members’ care needs.
According to the Office of Coordination of National Health Information, 50 percent of healthcare dollars are wasted on inefficient processes. Transformative innovation must not only change the current way things are done, it must be disruptive by having a meaningful impact on time, quality, cost and operational effectiveness – it must dramatically simplify and accelerate the process it enables.
There are very exciting ways in which digital technology is creating transformation across the entire healthcare system in areas such as connected health, artificial intelligence (AI), blockchain, mobile data gathering, analytics, digital therapeutics and remote patient monitoring. All of these technological developments will improve healthcare efficiency, but more importantly they will drive the delivery of individualized care and dramatically improve patient outcomes as follows:
Access to Care
Connected health, or telehealth, is enabling the delivery of care to rural areas, where access is often nonexistent or very limited. It is also being used to address growing medical staff and physician shortages by providing access to timely care through collaborative tools such as eConsults. Telehealth delivers faster, less expensive and more convenient healthcare and in doing so significantly improves patient outcomes.
Conventional patient engagement systems display information at the hospital bedside, which is only one of many relevant ways to connect with patients. Companies are now integrating artificial intelligence or ‘virtual’ health coaches into interactive educational platforms, resulting in higher utilization and engagement, and delivering more robust, actionable content.
Remote Patient Monitoring (RPM)
A vast array of innovative wearables and sensors such as the biosensor bra patch, implantable glucose sensor, electronic tattoos and the cardiac mapping vest are revolutionizing remote monitoring capabilities. These remote monitoring systems have the potential to help achieve triple aim goals by leveraging the latest advancements to collect and analyze patient data beyond the bedside. Patients and providers can use smart phones, tablets and apps to remotely assess, diagnose and monitor their patients. Electronic monitoring can be an effective solution to identifying issues as they happen while also enabling more effective tracking of patients post-discharge, improving compliance and adherence, and reducing the number of re-admissions.