Industry consolidation is omnipresent, and the belief exists that the US healthcare market will continue to consolidate. If the trend does continue, in just a few years the hospital provider landscape will look very different, down to 400 - 600 hospital organizations from the current 1600: a reduction of approximately 70%1! Similar changes are also expected in the U.K. In a survey of U.K. hospital executives, 76% will look for collaboration partners in the next three years2. Consolidation is fueled by the quest to achieve better outcomes at lower costs. However, the reality is that the expected economies of scale are not yet being realized. Optimizing clinical operations is critical to delivering less expensive care and enabling growth. By eliminating unwarranted variations and enabling automated, standardized workflows, healthcare providers are able to consistently deliver the highest quality of care, improving the patient experience, and making care easier to access across the care continuum.
Typical hospital systems were not designed to operate across a multi-facility setting. In today’s environment, combining operations to leverage synergies is much more complex than a simple combination of the individual institutions. Such consolidation is having a significant impact on imaging service lines due to disparate hospital processes, systems, and siloes of data. Historically, workflow lists were based on modality and anatomy, an approach which is no longer feasible in today’s healthcare environment.
Running an imaging service line as a collection of numerous, unique hospital based Radiology departments can lead to variability of care across a system and a poor patient experience. Furthermore, inefficiencies and unwarranted variations can increase costs and negatively impact patient outcomes. For example, when a subspecialist is needed to interpret a study which was acquired at another facility, this can add time and cost, and, could delay the patient diagnosis and treatment.
Such care delivery challenges are further complicated by changes in legislative reform. Changes are not confined to the U.S. alone—they are observed world-wide, irrespective of the type of healthcare delivery model. In the U.S., providers are continually working to thrive under the shifting landscape and to comply with the sweeping legislative reform by the Centers for Medicare and Medicaid (CMS) known as the Protecting Access to Medicare Act (PAMA).
The American Clinical Laboratory Association recently deemed PAMA the most extensive reform of the Medicare Clinical Laboratory Fee Schedule since its establishment in 19843. Passed in 2014, some elements of PAMA have already been implemented. Other elements are delayed, but not indefinitely. Without adjustment and optimization, bottom lines will certainly be impacted, but providers can minimize the effect of reimbursement cuts by proactively investigating opportunities for efficiency gains.
Shifting Provider Landscape: Did You Know?
* PAMA is estimated to save Medicare approximately $4 billion in the first five years of implementation4.
* PAMA originally mandated that CMS fully implement the Appropriate Use Criteria (AUC) program by January 1, 2017, but CMS recently announced that it will begin the program on January 1, 20205.
* IDNs include hospitals or hospital systems, large medical groups, long-term care, outpatient centers, pharmacy, and/or managed care.
One component of PAMA that has yet to go into effect is the requirement that providers prove that advanced diagnostic imaging services, which include MRIs, PET scans, and CT scans, meet Appropriate Use Criteria (AUC). This requirement is important because it will help avoid unnecessary imaging services that do not improve patient welfare6, which some experts estimate account for 20-30 percent of high-tech imaging procedures7. CMS will require that a provider use a clinical decision support mechanism to demonstrate compliance with AUC expectations to avoid significant reimbursement issues.
So, what’s the answer? Hospitals looking to prosper in light of these changes need to start with a long term plan – or the “why” for an imaging service line. Optimized workflows coupled with clinical decision support software can enable a healthcare system to streamline operations today while planning to effectively integrate and create the right structure to effectively deliver care long term.
The use of simulation modeling, at a departmental or hospital level, can help healthcare providers identify the optimal way to transform their processes and meet their long term goals. For example, by using digital twins, different scenarios can be compared and assessed in a cost-effective way, allowing providers to implement operational excellence by analyzing potential layouts and processes. As a "what-if" tool, Workflow Simulation predicts the operational and financial impacts of the proposed solutions through quantitative feedback to help decision makers quickly identify the optimum solution. In addition, this approach can be used to conduct virtual stress tests to examine the robustness of current operations in certain situations including higher patient volumes, more complex patients or staffing shortages.
