With healthcare undergoing intense market transformations in payment models, revenue sources and demands of healthcare innovation, leaders in the field need to focus on actively managing the move to value-based payments and accelerate their planning for these transitions.
These were the topics discussed by industry leaders during a KPMG Healthcare and Pharmaceutical Institute webinar, "Transforming Healthcare: Emerging Business Models," held on Aug. 22. The presentation was based upon KPMG-sponsored research with business executives from leading healthcare systems, health plans and pharmaceutical companies on their expectations for the next five years and the changes they will need to make to their business models.
"Regardless of all the uncertainties in healthcare, there are really four things that are certain," said webinar moderator Ed Giniat, national sector leader for Healthcare & Pharmaceuticals at KPMG. Those four certainties include: the need for healthcare entities to enhance the quality of care and "do better with less"; the need for greater size and scale; the need for healthcare organizations to comply with the increasing enforcement activities and the implementation of unfunded mandates; and the need to address cost as it is a matter of "not if, but when" the Medicare trust fund becomes insolvent.
Based on the KPMG market research, Giniat said there were several important insights gathered.
"The majority of healthcare systems, health plans and pharmaceuticals executives view their business model as somewhat sustainable or better," he said. "However, our view is that the current business models are not sustainable."
In addition, Giniat said that industry participants, particularly the healthcare systems, see the need for many changes to occur soon, but expect a steady integration of these changes. KPMG believes the way for more rapid integration to occur is for stakeholders to lead the change.
According to webinar speaker Brad Benton, national account leader in healthcare at KPMG, the research showed that healthcare systems see physician alignment, improving quality, and healthcare information technology as extremely important in developing new business models. Meanwhile, the same providers see partnering with health plans and alternate sites instead of owning and operating them as somewhat important for new business models, but not extremely important.
Benton and Giniat closed the discussion with a number of suggested steps of action for sustainable healthcare entities that include next generation-strategies, like preparing for payment model reform and expanding IT infrastructure and data use; the development of a three-to-five-year model in anticipation of revenue transformation; and sophisticated assessment and execution of partnerships and collaboration opportunities.
"Things have to change. And there clearly is a need to actively manage the transition," said Giniat.