Medicare Reimbursement Declined – 5 Essentials for Success In The New Healthcare World

One of the many challenges physicians are facing this year is transitioning from volume-based payment to value-based payment. Medicare Access and CHIP Re-authorization Act also known as MACRA replaces the current Medicare reimbursement schedule, fee-for-service, with a new value-based care framework that’s focused on quality, value and accountability. This transformation is the most important industry-wide effort that it will impact millions of healthcare providers across the nation.

MACRA offers two reimbursements path models, Advance Alternative payment Models (APMs) or the Merit-based Incentive Payment System (MIPS). The MIPS model is an incentivize model which consolidated three existing Medicare quality program into one. Many independent medical practice will opt for MIPS due to its incentivized benefits and potential to increase net revenue through payment adjustments, that in some cases, reward value in primary care rather than volume.

With such dramatic change, independent medical practices are asking: What can we do to thrive under this new value-based care equation?

In this article, I present some tips to aid the solo and small healthcare practices on how to better utilize information technology tools under value-based care framework. In addition, we look at how to improve financial results, while reducing overall costs.

5 Tips for Small Independent Practices to Succeed

1. Robust investment in analytics to predict re-admissions.

Understanding the patterns in your data allows you to act on trends before they become cost-draining issues.

For example, by analyzing data information about patients being treated. Small practices can more readily flag patients that are likely candidates for readmission. Then tailor patient engagements and interactions specific to these patients. From there, make the quality improvements that can lead to better clinical outcomes. The cost of investing in a population health management solution can help to generate higher savings overtime.

Remember, the only way to report on those outcomes – and get paid for the service you provide – is through quality data. Look to IT solution such as a population health management system to help provide the quality data your require.

2. Empower Patients to Take Control of Their Own Health

Independent Health practices should focus on the specific attributes of their communities to move toward a quality driven model. Strategies that personalize delivery and empower patient’s to take better control of their own health are the most likely to succeed.

For example, a physician who serves a predominate Hispanic population may want to consider developing diabetes prevention programs. These programs could focus on aiding in limiting the spread of the disease.

Development of such programs can help small independent practices better define information technology tools. For example, data-driven tools. These tools provide insight on cost and quality metrics, and provides the data needed to make care decisions that are consistent with effective clinical practice.This may improve service delivery and greater value-based outcomes.

3. Deliver continuous access to mission-critical systems and data

No matter what size your organization is, no organization can afford downtime. In healthcare, system failures cost more than money. They can cost lives. When the flow of data is disrupted, the effect is viral and impacts patient health and safety, internal processes, and revenue.

High availability is no longer a nice-to-have, it’s a must have. Across all industries, High Availability (HA) is measured in nines. “One nine” refers to 90% systems uptime, “five nines”, a standard reference point, refers to 99.999% uptime. Downtime that occurs during peak patient care hours will have a larger impact to your organization than downtime occurring in off-peak hours.

For high availability configurations your IT needs to ensure there are no interruptions in flow of data and that patient and administrative functions are being performed according to standards. High availability for healthcare should:

Allow for scheduled system maintenance and upgrades without disruption in service
Respond to unplanned system outages
Scale to meet your volume requirements
Reduce the burden on your internal IT resources
Employ fault-tolerance and automated failure detection
Provide 99.999% uptime

Solo and small healthcare practices that have previously regarded downtime as inevitable, or necessary evil, must adapt to increase availability requirements. As the volume of information exchange across increases – so will the amount of revenue lost per second of downtime.

4. Form alliances to help meet requirements and maximize payments

A great method to help maximize payments under CMS payment policy is by forging an alliance with other healthcare organization. The right alliance may help with meeting requirements from payers and patients for delivering quality.

Given the central role that technology plays in today’s health are environment, carefully consider the IT implications of any new alliance before committing to the partnership. Considerations that can assist in ensuring a successful clinical partnerships include:

Put a premium on sharing – Many organization will have different technologies that need to work together. Invest in integration platforms that make connections nearly seamless, which can streamline and simply information sharing.

Insist on interoperability. Many organization have invested in EHR or EMR technology. Forcing alliance partners to change technologies for the sake of uniformity only creates more confusion and disruption. Implementing an integration model that allows information to be meaningfully used in different clinical systems will increase interoperability.

5. Secure your data

Healthcare data is the new frontier for aggressive hackers seeking an easier and more lucrative way to conduct identity theft. The estimated cost of a healthcare breach is quantified as $200 per-patient record. This does not include lost business and financial resources. Keeping your applications, patient data and system secure will aid in maximizing your payments under CMS.

When it comes to healthcare data, you can never be too secure considering the facts. Here are steps you can take now to help you practice better secure your data:

Recognize that changes in policies must come from the top levels of an organization
Assess the 5 Rs in your security strategy: risk, redundancy, replication, recovery and responsibility.
Review and update your HIPAA compliance regularly. By achieving HIPAA compliance you will also increase your cybersecurity posture.

Between diminishing reimbursements and the transition to value-based care, sole and independent healthcare providers face ever-increasing pressure to reduce healthcare delivery cost. In order to protect margins business operations need to be manage more efficiently

Value-based Care Equation

The Holy Grail to achieving optimal value-based care, is to find less expensive ways to provide optimal care in a lower cost environment that is also accessible. More Specifically, in order to thrive in the era of value-based reimbursement, small independent health care organizations will need tools that allow them to measure their outcomes.

China’s Gray Revolution – Why China May Invent the New Business of Aging

Discussions of China tend to focus on size – a nation of over 1.3 billion people certainly deserves attention from business and investors worldwide. But, ‘total’ numbers reveal little about underlying social and market dynamics nor the opportunities they may present.

China is undergoing a ‘gray’ revolution. While discussions of aging and innovation almost exclusively focus on the industrialized economies of Europe, North America, Japan and the tiger economies of Asia, China may be the venue to watch, and for innovators to engage in what’s new in aging. A convergence of forces — demographic transition, family dynamics, and institutional readiness provide a promising market for innovations in health delivery, eldercare and aging services.

Disruptive Demographics in the Middle Kingdom

Gray China – Asia Studies Monitor data indicate that life expectancy in China was a young 41 years old compared to 65 and older in Europe and North America in 1950. China is closing the longevity gap. Today, life expectancy in China has jumped to nearly 79 years compared to 82+ years in western industrialized economies.

According to the United Nations, the number of people over 60 in China is approximately 167 million. Imagine – an entire nation of older adults larger than the total populations of Germany and France combined. In only 10 years, China’s older population is projected to be 248 million and by mid-century 437 million people or more than the total projected population of the United States in 2050.

Living Globally But Aging Alone – Two socio-economic factors shape China’s aging today: fewer children and economic development. The oft-cited one child one family policy, instituted in 1979, has been effective in managing population growth. It has also resulted in a fundamental change in China’s support ratio (the number of people working compared to the number of people over retirement age). According to the Center for Strategic and International Studies, China’s support ratio is more than 5 working people for every older person, by 2030 it may be only 2.5 working adults, and by mid-century ~1.6 working age people to every adult over retirement age.

Globalization brings change to even the most traditional families. Economic opportunity is growing fastest in China’s urban centers. Income for younger workers may be 3X higher in cities than in rural regions. Consequently, many adult children are leaving the family home for work in other regions. An extraordinary number and proportion of elderly Chinese are aging alone. China Daily reports that an estimated 80 million (of the nation’s 167 million 60+ population) older adults live alone. If accurate, these numbers reflect more than 47 percent of the older population aging alone compared to 30 percent of older people “home alone” in the United States – greatly challenging the commonly held belief that family tradition and culture shapes the alternative futures of aging around the world.

Care Gap – The family has traditionally provided eldercare. Consequently, China has an underdeveloped aging services system. Today there is a growing care gap to meet daily and long-term care needs. Community senior centers are slowly emerging in cities and some rural areas. The China National Committee on Ageing estimates that about 25 percent or 30 million older people need long-term care due to disability and disease. Compared to an estimated 50-70 long-term care beds per 1000 older adults in industrialized economies, there are only ~10 per 1000 older people in China. 2008 data indicates that most of these beds are already filled. Beyond facilities, the formal “careforce” in China is approximately 30,000 workers – estimates suggest that 10 million workers may be needed.

Innovating a New Industry of Old Age in China

An underdeveloped network of aging services and related institutions is a problem for China, but it may also be an opportunity. Institutions are generally biased in favor of ‘yesterday’s’ definition of a problem and yesterday’s range of available solutions. Simply applying models of aging services from other nations, many designed decades ago, will not necessarily meet China’s needs. Aging in China will require engineering new organizations that combine public and private providers, services and technologies. China’s demographic imperative to do something now, without a real legacy of service providers wedded to established practices and technology, is an opportunity to invent a new business of aging. Recognizing the clear need, China’s Ministry of Civil Affairs Wang Hui declared in a People’s Daily interview “We want to turn elderly care services into an industry in the long run.”

Insight & Innovations

What are the opportunities for creative public-private partnerships, technology and services to support China’s aging population? Remote family care, health & wellness and aging services are three categories that could draw upon China’s existing capacity, a wide variety of global companies, NGOs and technologies to implement a uniquely Chinese eldercare services industry in the near-term.

Remote Family Care – China’s 4-2-1 family structure, four elderly parents, a young couple, with one child is Asia’s sandwich generation. Insurers that currently offer life products in China, e.g., Allianz, Ping An, may find that their growing market of young urban consumers are a cross-sell opportunity for a product to provide home care services to their parents living near or a region away. Other firms that may find family care services an adjacent opportunity to their core business are banks and money transfer agents that facilitate funds transfers from children working in cities to their rural parents. Insurers and banks could aggregate these demands and source homecare, maintenance and other services to public or approved private providers.

Maintaining regular social connection with family is critical to the health and wellbeing of an elderly parent – but it is also important to young parents seeking family advice and grandchildren learning about their past. An estimated 384 million Chinese are now online – not the same as human touch, but ‘virtual’ touch may replace no touch at all. AgeLab field research indicates that selected senior centers in urban areas have one or more Internet connections. Community centers and senior housing, such as those offered by Provincial governments, Society Care (established 1950) and Modern Care (established 1990) should make these services an investment priority and promote their use. Introduction of easy-to-use video conferencing applications and Internet social networking sites such as China’s Kaixin, Weibo, QQ and Youku are the new tools to connect the generations.

Health & Wellness – Maintaining good dietary habits becomes more important with age. But, eating, and eating well, is a social activity. Older adults that live alone become less interested and, eventually less able, to prepare a nutritious meal. Working within the context of traditional Chinese cooking, food companies (e.g., Groupe Danone, Nestle, General Mills) may find easy-to-prepare, easy to digest, high nutrition ‘functional foods’ be successful in China’s fast growing aging market.

Managing chronic disease (particularly hypertension, diabetes, heart disease) in China, as in every other country, is critical to wellbeing across the lifespan as well as managing the personal and public cost of disability. Disease management services that focus on diet, physical activity, medication compliance, and behavior modification (e.g., smoking cessation) are expanding into developing economies and reaching disadvantaged elderly. Healthways, for example, partners with Fleury S.A. to provide disease management and wellness services to 40 million Brazilians. In Singapore, the Tsao Foundation provides social care services and operates clinics that are a model of integrative medicine using the best of both traditional Chinese and western medical practice.

Telemedicine may be one of the best investments for an aging China. Telemedicine is not a second best alternative to care. The Scottish Centre for Telehealth, in partnership with Cisco, has shown that telemedicine can produce an over 90 percent patient satisfaction rating. NGOs, telecommunications companies and large health services providers (e.g., Partners HealthCare Center for Connected Health, University of Rochester) could be valuable partners to connect rural elderly and caregivers with specialists within China and around the world.

Aging Services – ‘Smart’ elderly housing will be a growing need. Public housing that provides a common smart technology infrastructure may facilitate the delivery of services that can be scaled across a province or the nation. For example, selected senior housing facilities in Singapore share a common information communications technology infrastructure, e.g., Internet access in each unit. Rethinking housing as a platform for technology-enabled services may optimize the integration of ‘intelligent’ devices and services already on the market (e.g., monitoring and health management applications offered by Philips, GE, and other firms in the global Continua Health Alliance) supporting safety, disease management, and social services.

Despite advances in technology, caregiving remains a high-touch business. The careforce shortage in China is critical. Development of professional programs and certification of formal caregivers would benefit from collaboration with long-term care companies and aging services organizations with expertise in training and the use of new technologies (e.g., HelpAge International, Home Instead, Golden Living). In addition to the training, expertise and services, investment in large-scale (provincial as well as national systems) health and homecare information management systems may help families understand the range of available services and government to ensure the highest quality of care.

Aging in China is not just about the elderly. It is about the wellbeing of all people in China as well as its performance in the world economy. Changing demographics, lifestyles, and an institutional readiness for innovation are converging to create an extraordinary opportunity for business, aging services and ultimately China’s people to build an “elder care services industry”. If successful, it might just become another leading export.

MIT AgeLab Research Assistant Victoria Lee conducted field research in China and translation of references in preparation of this article.

Further Reading

– Coughlin, J. & Pope, J. “Innovations in Health, Wellness & Aging-in-Place: Development of a Consumer-Centered Approach to Intelligent Home Services”, IEEE Engineering in Medicine & Biology, July-August 2008.
– “An Investigation of Development Issues of Urban Senior Apartments in China,” China East Normal University, 2007
– Coughlin, J., Pope, J., Leedle, B. “Old Age, New Technology and Future Innovations in Disease Management and Home Health Care,” in Home Health Care Management and Practice, 18(3), pp. 196-207, 2006.
– U.S. Census Bureau, International Data Base
– “A Forecast and Research on the Development Trends of Aging Chinese Population” China National Committee on Aging, 2006
– “A Whitepaper of the Development of Senior Cares in China,” State Council of PRC, December 12, 2006,
– “Demands and Development of Senior Apartments in China,” Beijing University, 2003,
– “Market Research of the Development of Senior Apartments in Beijing,” China Academy of Science, 1998,