How best to navigate uncertainty in healthcare
During the last eight years, the healthcare industry has faced a significant transformation. The recent results of this week’s US election have put some reform efforts into question and brought about significant uncertainty that will hamper decision making and threatens to slow the progress on some initiatives—including those employing information technology, as well as others.
Given this is the time for many organizations to conduct their annual strategic planning and budgeting, this uncertainty poses significant risks for paralysis in decision making.
President-elect Donald Trump has campaigned heavily on some healthcare platforms, most significantly promising to repeal or greatly reformulate the Affordable Care Act and Obamacare. This period of uncertainty, between the November 8 election and inauguration, is likely to stall healthcare organizations’ progress on major initiatives, and that could impede providers’ strategic and operational decisions until the new federal vision is much clearer.
With that context, it is important to step back and reflect on the broader trajectory of the healthcare industry to better understand the areas where change is unlikely to have a major impact.
- MACRA is here to stay. MACRA was passed as a bipartisan legislation and is unlikely to have significant revisions in the near future. Because MACRA is the single largest regulation driving business models for providers, this means that a significant amount of uncertainty surrounding reimbursements and revenues is simply out of the equation.
- Technology-led disruption, the consumerization of healthcare, greater use of data analytics and business model innovation are likely to continue. These secular trends are enabled by advances in technology and changing consumer preferences, and not regulation. As a result, we still see these trends continuing into the future, and business model innovation is likely to continue to drive the agenda for senior leadership as they look to offset revenues impacted by the shift to pay for performance.
- Maintaining a focus on cost optimization is always good business practice. During the last few years, cost optimization has received a lot of attention and driven the executive agenda. As an industry, there are still opportunities to realize cost savings, whether in IT or in the supply chain. In planning ahead for uncertainty, now is a good time to revisit the cost base and redesign operating models to squeeze out additional efficiencies.
As the industry grapples with post-election uncertainty, it is important to remember that many of the secular trends behind the industry transformation are likely to persist, irrespective of any short-term change in regulations.
Uncertainty does not have to lead to a paralysis in decision making. The industry will obviously adapt to whatever change comes its way. Focus on these secular trends can drive the healthcare agenda and help industry leaders navigate the uncertainty that lies ahead.