Futurescan
Healthcare Trends and Implications
2010–2015
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Futurescan
Co-sponsored by:
• Society for Healthcare Strategy and Market
Development of the American Hospital Association
• American College of Healthcare Executives
• With Support From Thomson Reuters and VHA Inc.
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American College of Healthcare Executives
• Professional society of more than 30,000 healthcare
executives—Leaders Who Care
• Board certification in healthcare management as ACHE
Fellows (FACHE®)
• Foremost continuing educator for the field
• Leading healthcare management publications:
– Health Administration Press books
– Journal of Healthcare Management, Frontiers of Health
Services Management and Healthcare Executive
• Fulfilling our vision to be the premier professional
society for healthcare executives dedicated to improving
healthcare delivery
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Society for Healthcare Strategy and Market
Development
• Personal membership group of the American Hospital
Association
• Serves more than 4,400 healthcare planning, marketing,
and public relations/communications professionals
• Committed to helping members meet the future with
more knowledge and opportunity as their organizations
work to improve health status and quality of life in their
communities
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Futurescan Contributing Authors
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Donald W. Seymour, Executive Editor
Paul J. Feldstein, The Economy: For Hospitals, an Uncertain Outlook
Stuart H. Altman, Christopher P. Tompkins, Stanley Wallack and Michael
Doonan, Payment: New Approaches for Paying Providers Will Change the
Organization of Healthcare Services
Stephen M. Shortell, Delivery System Reform: Accountable Care
Organizations and Patient-Centered Medical Homes
William F. Jessee, Physicians: Transitioning from Alignment to Integration
Eric J. Topol, Genomic Medicine: Opening the Door to Individualized Care
Jeff Goldsmith, Healthcare IT’s Unfulfilled Promise: What We’ve Got Here is
Failure to Communicate
Lynn Unruh, Nursing: Toward a Sustainable Nursing Workforce
Bob Eisenman, The Environment: The Greening of Healthcare and Hospitals
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“Even small healthcare institutions are
complex, barely manageable places. . .
Large healthcare institutions may be the
most complex organizations in human
history.”
Peter Drucker
Post-Capitalist Society. New York, Harper and Row, 1993
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Futurescan in Context
• These trends can transform the future
• Healthcare reform legislation introduces
uncertainty and opportunity
• Individual organizations must determine
relevance, timing and context
(c) 2010 – Society for Healthcare Strategy and Market Development (SHSMD) of the American Hospital Association
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Using Futurescan
• Assess local trends, review assumptions,
project implications
• Distinguish operational from strategic
implications
• Determine key strategic Issues
• Consider timing
• Exercise common sense and discipline
(c) 2010 – SHSMD
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The Economy:
For Hospitals, an
Uncertain Outlook
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The Economy: Skyrocketing Costs
Even with reform, healthcare costs will
continue to outpace inflation, threatening
hospital margins.
• Adopt strategic initiatives such as LEAN that are
designed to reduce costs and improve efficiency.
• Incentivize employees at all levels to identify costsaving measures and strategies.
• Intensify fundraising efforts.
(c) 2010 – SHSMD
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The Economy:
Medicare Challenges
Deficits in the Medicare Hospital
Insurance Trust Fund will intensify as
the Baby Boomers begin to qualify for
Medicare.
• Look for new ways to cut costs and reduce
unnecessary care.
• Migrate care to less costly outpatient settings.
• Advocate for reasonable and fair Medicare
reimbursement rates.
(c) 2010 – SHSMD
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The Economy: Fewer Private
Pay Patients
With or without reform, the number of
privately insured patients will decline.
• Aggressively market to private pay patients in your
service area.
• Develop and promote centers of excellence that meet
community needs.
• Be an active political advocate for fair and reasonable
updates for Medicare and Medicaid coverage.
(c) 2010 – SHSMD
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The Economy: More Bad Debt
Bad debt will increase as private insurers
increase co-pays and deductibles in order
to soften premium increases.
• Negotiate contracts with insurers carefully, as they
will be attempting to aggressively cut costs.
• Anticipate increased pressures for price and cost
transparency.
(c) 2010 – SHSMD
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The Economy:
Physician Competition
Physicians will continue to shift lucrative
services to outpatient settings or facilities
in which they have an ownership stake.
• Look for ways to engage physicians with your
organization and build their loyalty.
• Develop strategies that financially integrate physician
and hospital services.
• When appropriate, joint venture with local physicians
to develop specialized services.
(c) 2010 – SHSMD
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The Economy:
The Outpatient Shift
Outpatient services will continue to grow
more rapidly than inpatient or other
hospital services.
• Invest in outpatient treatment and diagnostic services,
creating joint ventures with physicians when
appropriate.
• Design new or renovated space to accommodate a
greater outpatient use.
(c) 2010 – SHSMD
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Payment:
New Approaches for
Paying Providers
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Payment: Performance and Quality
Payment based on quality and efficiency
will be routine, and quality “bonuses” will
be drawn from annual payment updates.
• Promote a culture that focuses on quality
improvement and patient safety.
• Make sure that information systems can produce valid
and reliable quality and outcome indicators.
• Work with physician leadership to promote the use of
evidence-based guidelines throughout the
organization.
(c) 2010 – SHSMD
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Payment: Global Payment
CMS will expand the number of
demonstration projects that bundle
payments for physicians and hospitals.
• Dialogue with physicians about the benefits of
coordinating patient care under this system.
• Work with physician leadership to develop methods of
sharing reimbursement for all types of patients.
• Be prepared to assume the majority of the financial
risk until global payment mechanisms become
routine.
(c) 2010 – SHSMD
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Payment: Renewed Importance
for Primary Care
New payment and delivery models will be
based on a constellation of care that will be
coordinated by primary care physicians.
• Develop relationships with primary care physicians
and groups.
• Be an advocate for payment reform that provides
greater incentives for primary care physicians.
(c) 2010 – SHSMD
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Payment:
The End of Fee for Service?
Reimbursement will increasingly rely on
payment mechanisms that promote
coordinated, cost-effective care and less
on FFS payments.
• Strengthen relationships with physicians and develop
partnerships for providing key services.
• Educate the medical staff on the implications of the
new reimbursement systems.
• Design information systems that are flexible and can
adequately capture cost and quality information.
(c) 2010 – SHSMD
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Delivery System
Reform:
Accountable Care
Organizations and
Medical Homes
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Reform:
EHRs Are Not an Option
EHRs will become a necessary
component for a delivery system that can
provide coordinated, cost-effective care.
• Have a strategy for EHR implementation, expansion
or update.
• Make sure your organization receives its share of
stimulus funds for EHR adoption and implementation.
• Select or adopt an EHR that is interoperable with
physician practices and other components of the
delivery system.
(c) 2010 – SHSMD
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Reform:
More Sophisticated Measures
With advances in performance
measurement, organizations will need to
be transparent and accountable.
• Invest in data systems that provide valid and reliable
measures of performance.
• Use performance data to foster quality improvement
efforts.
• In the interest of transparency, share select
information with key stakeholders and the general
public.
(c) 2010 – SHSMD
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Reform: Medical Homes
Federal funding will promote the
development of patient-centered medical
homes as a reform strategy.
• Establish partnerships with primary care physicians who
are key to medical homes.
• Use the Physician Practice Connections-Patient-Centered
Medical Home standards promoted by the National Center
for Quality Assurance to guide the development of medical
homes.
• Emphasize interdisciplinary teamwork throughout the
organization, providing team training if appropriate.
• Incorporate disease management and prevention efforts
into community outreach activities.
(c) 2010 – SHSMD
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Reform: Accountable Care
Organizations
Accountable Care Organizations (ACOs)
will develop in response to real and
anticipated reimbursement changes.
• Strengthen relationships with physicians.
• Modify or invest in information systems that will
accurately measure performance and predict
future costs.
• Work with physician leaders to promote evidencebased practices and reduce overuse.
• Focus on measurements that relate to the
organization’s strategic priorities.
(c) 2010 – SHSMD
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Reform:
Effectiveness Research
Care standards based on comparative
effectiveness research will be promoted as
the “gold standard.”
• Continuously monitor clinical and health services
research literature for new trends and findings.
• Monitor the political environment for proposed
changes in reimbursement based on research
findings.
• Share new standards with medical staff and members
of the governing board.
(c) 2010 – SHSMD
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Physicians:
Transitioning From
Alignment to Integration
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Physicians: New Lifestyle
Expectations
A younger physician work force,
comprised of significantly more women,
will demand flexible scheduling for more
personal time.
• Create more full-time employment opportunities, with
regular hours, for physicians.
• Create flexible opportunities for physicians who do
not want full-time employment due to family
responsibilities.
• When recruiting physicians, emphasize social as well
as professional opportunities.
(c) 2010 – SHSMD
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Physicians:
The End of Solo Practice?
Physicians are leaving solo and twoperson practices to join groups or seek
full-time salaried positions.
• Establish medical leadership positions that will
promote efficiency and quality.
• Offer management services that will benefit small
practices and develop loyalty to the institution.
• Develop programs and services targeting new and
growing physician groups and IPAs.
(c) 2010 – SHSMD
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Physicians:
Shifting Practice Patterns
Increasing numbers of physicians will limit
their scope of practice so they will be
either hospital-based or office-based.
• Segment integration strategies to account for the
differences between these two groups.
• Offer billing, collection and other Management
Service Organization services to office-based
physicians.
• Develop leadership roles for hospital-based
physicians.
• Develop joint ventures with entrepreneurial
specialists.
(c) 2010 – SHSMD
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Physicians:
Primary Care Shortages
At a time when reform initiatives
emphasize the role of primary care, most
communities will experience serious
shortages of primary care physicians.
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Develop alignments with primary care practices.
Create leadership roles for primary care physicians.
Intensify efforts to recruit primary care physicians.
Advocate for higher federal and state reimbursements
for primary care.
(c) 2010 – SHSMD
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Physicians: Partners in Risk
Economic and demographic trends, spiraling
costs, and expected changes in payment
structure will create pressures for increased
hospital-physician integration. Physicians and
hospitals will share risk.
• Modify information systems that allow physicians
access to patient information remotely, 24/7.
• Create reward structures for physicians who have
good patient outcomes and minimize costs.
• Work with medical leadership to promote evidencebased practices within the institution.
(c) 2010 – SHSMD
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Genomic Medicine:
Opening the Door to
Individualized
Healthcare
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Genomics:
A Gold Rush of Discovery
Genetic markers of common diseases are
being discovered at a pace never seen
before in biomedical research.
• Strategic planning processes should focus on the
impacts of these new discoveries.
• Help staff and board members stay up-to-date on
fast-breaking genetic discoveries.
• Consider adding service lines related to genetic
testing and counseling.
(c) 2010 – SHSMD
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Genomics: Drug Effectiveness
Genetic sequencing will determine
whether an individual will be helped by
drug therapies previously considered
“standard.”
• Assign staff to monitor current trends in
pharmacogenetic interactions.
• Update the laboratory so it can perform rapid genetic
testing prior to the administration of selected drugs.
• Alternatively, develop a relationship with a reputable
central lab for quick test turnaround.
(c) 2010 – SHSMD
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Genomics:
Prediction and Prevention
Genomic screening will make medicine
more predictive and preventive, and it will
be possible to diagnose and treat illness in
younger people.
• Anticipate further shifts from inpatient to outpatient
care.
• Develop expertise in genetic counseling that
incorporates advice on the environmental risks
associated with common diseases.
• Be prepared to respond to the ethical issues
surrounding genetic screening.
(c) 2010 – SHSMD
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(c) 2010 – SHSMD
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Genomics: New Competitors
Private companies are marketing directly
to consumers and offering relatively lowcost genetic screening for a variety of
diseases. Consumers are willing to pay
out of pocket.
• Be prepared to deal with patients who present with a
“genetic profile.”
• Consider offering hospital-based genetic testing
programs as a part of an overall preventive/wellness
strategy.
(c) 2010 – SHSMD
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Genomics: Individualized
Healthcare
If the unprecedented rate of discovery in
genomic medicine continues, diagnostic
and treatment procedures tailored to
individual patients are on the horizon.
• Consider developing a service line based on genomic
medicine.
• Prepare for an accelerated shift to outpatient
diagnosis and treatment.
• Be prepared to educate the public on the benefits and
limitations of genomic medicine.
(c) 2010 – SHSMD
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Healthcare IT’s
Unfulfilled Promise
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Healthcare IT: Unfulfilled Promises
To date, information systems in
healthcare have not fulfilled their
promise. Instead, they have added cost
and provider burden.
• Provide better education for staff.
• Make more demands on vendors and outline clear
expectations for ease of use.
• Pursue systems and updates that transcend silos
between departments and processes and promote
interoperability.
• Develop a fully automated revenue cycle for
significant cost savings.
(c) 2010 – SHSMD
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Healthcare IT: Horizontal
Communication
Instant messaging, texting and online
discussion groups are preferred methods
of problem solving and communication for
younger physicians and managers.
• Build instant messaging and online communities into
the IT infrastructure.
• Make sure the interface is “Facebook friendly.”
• Provide wireless Internet access throughout the
organization.
(c) 2010 – SHSMD
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Healthcare IT: Move it Online
Online sites will play a key role in helping
people monitor their health and in
providing health education.
• Maintain a Web site that is engaging and easy to
navigate.
• Develop a strategy for the use of social media in
promoting your organization.
• Provide links to reputable and reliable health
information sites.
• Use the Web portal to provide online interventions in
nutritional planning, smoking cessation and support
for other chronic conditions.
(c) 2010 – SHSMD
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Healthcare IT: New
Communication Lines
Future patients will expect to communicate
with their physicians and health providers
online and in real time.
• Shift appointment reminders and pre-admission
processes to the organization’s Web site.
• Create instant-message systems for patient updates.
• Provide wireless Internet access throughout the
organization.
(c) 2010 – SHSMD
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Healthcare IT: PHR Evolution
Future Personal Health Records will be
truly personal. They will be worn or
become part of an individual.
• Keep abreast of the latest technology trends.
• Build trust with patients that their health information
is confidential and secure.
• Take advantage of federal dollars in the stimulus
package to upgrade or install EHRs.
• Keep information systems up-to-date.
(c) 2010 – SHSMD
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Nursing:
Toward a Sustainable
Nursing Work Force
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Nursing:
Complacency Is Dangerous
The nursing shortage is on hold, but once
recovery from the current recession is
complete, it will return with a vengeance.
• Partner with local nursing schools to provide clinical
placements for students and employment opportunities
for graduates.
• Avoid cutbacks in the nursing staff whenever possible.
• Initiate strategies to retain the current nursing staff that
focus on streamlining the work environment and
reassigning non-value-added activities.
• Support legislation that expands nursing education.
(c) 2010 – SHSMD
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Nursing: An Aging Work Force
Despite younger nurses entering the work
force, the proportion of older RNs in the
work force will increase for several more
years.
• Improve the ergonomic design of the physical
workplace.
• Use LEAN concepts to reduce unnecessary and
redundant steps on nursing units.
• Accommodate flexible and part-time schedules for
experienced nurses.
(c) 2010 – SHSMD
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Nursing:
An International Work Force
The need for foreign-born nurses to
complement the native-born work force will
increase, despite some concerns about
communication issues.
• Support research that investigates the relationship
between communication skills and patient safety.
• When appropriate, provide training in communication
skills for foreign-born nurses.
• Provide cultural competency training for foreign-born
nurses and the staff who work with them.
(c) 2010 – SHSMD
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Nursing: Fertile Ground for
Labor Unions
The newly-formed National Nurses Union
will intensify efforts to unionize nurses
nationwide.
• Educate leaders on the various tactics and strategies
employed by unions in healthcare facilities.
• Engage nursing leadership in activities designed to
improve the satisfaction of the nursing staff.
• Take the high ground if dealing with unions. Answer
questions directly and honestly.
(c) 2010 – SHSMD
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Nursing:
Mandated Staffing Ratios
More states will consider legislating
mandatory nurse staffing ratios.
• Be prepared to articulate and justify current staffing
processes. Involve nursing leadership.
• Restructure the care processes so nursing performs
fewer non-value-added activities.
• In the interest of patient safety, set limits on
mandatory overtime for nurses.
(c) 2010 – SHSMD
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The Environment:
The Greening of Healthcare
and Hospitals
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Environment: Going Green
Hospitals will be actively involved in
“green” initiatives in an attempt to reduce
their environmental impact and carbon
footprint.
• Limit vendors to those with environmental programs.
• Participate in organizations that promote sustainability
and safety.
• Monitor legislative activity to determine if federal
funds become available for energy improvements.
(c) 2010 – SHSMD
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Environment:
Health and Safety Hazards
Hospitals will be required to disclose, to
the general public as well as employees
and patients, any incidents that adversely
impact the environment or impose health
or safety hazards.
• Give full support to safety officers and others
responsible for environmental health and safety.
• Audit your organization periodically to identify and
reduce risks.
• Make the health and safety of patients, staff and the
community served a strategic priority.
(c) 2010 – SHSMD
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Environment:
Recycle Equipment
Hospitals will be expected to recycle
medical equipment that is no longer
used by giving it to needy countries.
• Develop partnerships with hospitals in less
developed countries that will accept the
equipment.
• Include equipment donations in community benefit
reports and in other reports to the community.
(c) 2010 – SHSMD
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Environment:
Construction Issues
Construction or renovation projects will
use design principles that promote safety
and reduce stress.
• Select architects and design teams that understand
the impact of physical design on human behavior and
patient safety.
• Work towards LEED accreditation for all or part of the
organization.
• Establish building standards that emphasize safety
and sustainability.
• Create a culture of safety within the organization.
(c) 2010 – SHSMD
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“‘We will do everything for everybody’ has
never been a viable value proposition for
any successful business model that we
know of—and yet that’s the value
proposition … of general hospitals.”
Clayton M. Christensen,
Jerome H. Grossman, MD,
and Jason Hwang, MD
The Innovator’s Prescription: A Disruptive Solution for Health Care (2009)
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Futurescan
This presentation was adapted by Mary Stefl, PhD,
Chair, Health Care Administration, Trinity University,
from Futurescan: Healthcare Trends and Implications
2010-2015.
Futurescan 2010 is available for purchase from Health
Administration Press. Single copies (order code 2155)
are $45. Packages of 15 copies (order code 2155BND)
are available for a discounted price of $395. Order
online at ache.org/HAP or call the ACHE/HAP Order
Fulfillment Center at (301) 362-6905.
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Futurescan
Healthcare Trends and Implications
2010–2015
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