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We use data, systems thinking, and change management techniques to help hospitals improve their organizational effectiveness.

Communities at Risk

Time to Develop a Plan “B” for Local Health Care

For many hospitals and rural communities, The Patient Protection and Affordable Care Act poses an existential threat to survival. Unless the law is changed quickly, many hospitals will be forced to change their structure and services or close. The communities they serve are at risk of losing access to local health care and sustaining severe damage to local economies.

We are committed to helping governing bodies, senior executives, and community leaders navigate through the damage caused by health care’s rapidly-failing Third Party Payer Payment System and emerge on the other side with local primary care of the highest possible quality while minimizing damage to the community’s economy.

How prepared are you to deal with these scenarios?

  • The Affordable Care Act excludes or limits your hospital and/or physicians from participation.
  • The Affordable Care Act excludes or limits your hospital and/or physicians from participation.
  • The Affordable Care Act produces rate structures and deductible and co-insurance payment requirements that result in significantly lower demand for primary care.
  • The hospital’s payer mix experiences significant increases in Medicaid and self-pay as a percentage of payers.
  • Reduced Medicare reimbursement rates become the best available.
  • Your hospital closes or merges, pulling patients and revenue out of the local community?

For many community hospitals, these scenarios are either already being experienced or will be shortly. At the same time, the market is sending a stark and inescapable message to the health care establishment: Change or die.

The future is arriving at top speed. Increasing numbers of physicians are ending their participation in the Medicare and Medicaid programs. Non-hospital patient care providers, unencumbered by the hospital cost structure, regulatory requirements, and organizational complexity, are emerging to compete with acute care hospitals across a broad spectrum of health care services. Lower prices, shorter feedback loops and service line autonomy provide them with a competitive advantage. They are positioned to provide quality services at a significantly lower cost to patients and are capable of responding much more quickly to changing local conditions. Examples include:

  • Diagnostic imaging centers.
  • Telemedicine.
  • Regional laboratories.
  • Surgery centers.
  • Office and clinic-base rehabilitation services (physical therapy, occupational therapy, and speech therapy).
  • Home Health and home maker services.
  • Assisted living facilities.
  • Private duty nursing providers.
  • Cancer treatment centers.
  • Infusion Centers.
  • Store front urgent care centers and walk-in clinics operated by retail outlets such as Wal-Mart, CVS, and Walgreens, etc., staffed by nurse practitioners or physician assistants.

Where might all of this lead?

Although the final shape of the future cannot be predicted with certainty, emerging new structures will consist of flatter, distributed, decentralized, entrepreneurially-managed and competitive entities, often self-financed, that will be linked in a variety of innovative ways. Driven by market forces, the emerging new structures will offer complete and unbeatable price transparency.

Self-serving propaganda to the contrary notwithstanding, the Third Party Payment system, including the mathematically unsustainable Medicare and Medicaid programs, caused the misnamed “health care cost explosion”, It is collapsing before our eyes. What actually “exploded” over the last fifty years was the cost of insurance, not the cost of “health care”. It will be interesting to see what happens when the public realizes that the ACA’s mandated “pay for performance” and “value-based purchasing” is designed to herd them into very expensive and dysfunctional HMOs at the point of a federal gun.

The Affordable Care Act is failing because a sinking ship cannot be saved by enlarging the size of the hole in the hull. In all likelihood, remnants of today’s legacy system will struggle to survive for the foreseeable future. Although it financially necessary to operate within the legacy system for the time being, prudent governing bodies, executive management teams, and community leaders are beginning to recognize the need to prepare for a new future. Don’t wait until after you’ve lost your hospital and your physicians to act. It is time to adopt a new approach. There are options.

To learn more about preserving local health care in your community, e-mail info@bradyinc.com. Enter “Plan ‘B’” on the subject line and record your contact information in the body of your query.

In the meantime, please visit our new Communities at Risk blog, bookmark it, and come back often. We look forward to hearing from you.

Brady & Associates | 7667 NW Prairie View Road | Suite #204 | Kansas City, MO 64151 | Phone: (816) 587-2120 | Fax: (816) 587-1698 | info@bradyinc.com