Attorney Kara Friedman told Becker's ASC Review about the biggest challenges her healthcare clients faced in 2018, how they can address those issues and what obstacles they'll encounter in the coming year.
Ms. Friedman represents health systems and other providers in alignment transactions and associated regulatory matters, including a specialization in health planning.
Note: Responses have been edited for length and clarity.
Question: What do you expect will be your healthcare clients' major challenges in the coming year?
Kara Friedman: The continuing destabilization of the health insurance markets and the lack of an effective payment model.
Q: What were the top three issues facing your healthcare clients in 2018?
KF: 1. Population health management in the face of a fragmented healthcare delivery system. Relatedly, how can a healthcare provider educate and motivate individuals and families to take steps to prevent and manage costly diseases? This sounds like a public health issue, but ultimately, reducing the cost of care by preventing illness and disease, slowing the onset and reducing the severity of disease is the primary goal of payers, and healthcare providers are ultimately trying to sell the right widget to insurers.
Over the last few decades, we have developed a very good understanding of the vital role of lifestyle choices in disease prevention and management. But where a provider fits in to this challenge — and how providers can be properly compensated for reducing demand for care in a world of fee-for-service medicine — remains an unsolved mystery. I have learned so much in my practice about the increased demand for kidney care, which could [in part] be avoided with relatively inexpensive, ongoing preventative screening and disease management. But we just keep building the supply for dialysis services and managing hospitalizations and the co-morbidities of end-stage renal disease rather than building an effective, broadly accessible primary care system to prevent and manage the causes of kidney failure.
2. Our nonprofit health system clients face emerging competitive challenges from strong, independent for-profit multispecialty group practices, payer-owned service providers and private equity-backed ventures with an entirely different business framework from a hospital. These threats seem particularly prevalent in the last couple of years and may be tamping down demand for hospital services in a way that will reduce hospitals' ability to provide uncompensated care and otherwise cross-subsidize low-margin and no-margin services.
3. Providers must develop innovative care models like affordable in-home urgent care services and telemedicine in a way that aligns with reimbursement mechanisms and with legal requirements. This is something that we, as attorneys, are routinely brought in to analyze and develop strategies for.
Q: How should healthcare providers prepare to address those issues?
KF: Providers need to position themselves for disruptive innovation and build and strengthen their issue advocacy capacity, as well as engage their local, state and federal legislatures on behalf of their communities. For example, if telemedicine and health data management apps reduce the cost of care and improve outcomes, we must remove the regulatory barriers from making those effective tools and provide a mechanism to reimburse for those services.
Thought leadership has never been more important, and providers need to start learning more from past mistakes. To innovate, providers must accept – even embrace – failure. I, of course, am not saying that I want to encourage failure. Health systems do, however, need to shift away from a culture that can't acknowledge failure toward one where it is understood to be part of the process of improvement. Lack of continuity of care and related fragmentation are failures that are difficult to recognize when no umbrella leadership exists to ensure that not only is everyone rowing in the same direction, but also that care is provided by the right provider, at the right time and at the right place.