12 Feb The Latest Insights for the Ambulatory Services Industry
Luis de la Prida, MBA – The NYBB Group
Overview: Due to changes brought on by healthcare reform, ambulatory services facilities can expect to face operational challenges in the short term and potential revenue increases in the long term.
The recent changes to the healthcare system in the United States, known as Health Care Reform, have and continue to make waves in the healthcare community. The goal of the reform is to improve the quality of patient care, reduce the costs of care, and make it more accessible to patients. Some of the changes implemented have included new insurance programs, policy changes for physicians, implementation of new technologies and payment restructures.
Currently in the U.S., there is a significant shortage of available nurses and physicians. This shortage is expected to increase to somewhere between 41,000 and 105,000 physicians by year 2030. Simultaneously, the market is seeing an increase in the number of patients needing consistent, long-term care. According to the Ambulatory Health Care Services Industry Profile by Dun & Bradstreet and M&A Source, “The number of Americans 65 and older is expected to increase by 38% between 2015 and 2025…”. This is significant because individuals in this age group spend an average of $11,000 per person per year on healthcare, $7,400 more than individuals in the next age bracket down. Individuals in this age group are also more likely to have chronic health conditions and be using government funded insurances such as Medicaid and Medicare.
Health care reform has made changes to the American health care system that aim to enable practitioners to meet the needs of citizens in the midst of the new market climate. Among the reforms that are making a difference in the way Urgent Care centers specifically operate are increases in walk-in clinics across the country, an increase in the technology available, and the implementation of MIPS, the Merit Based Incentive Payment System by the Centers for Medicare and Medicaid Services (CMS). These changes may pose both challenges and potential rewards to the industry.
The introduction of a number of walk-in clinics across the country poses a great opportunity for decluttering the waiting rooms of ERs and Urgent Care Centers with patients suffering from minor ailments. Many of the new changes, in particular the MEPS program, force private practices to spend more time with patients and reduce the number of patients that they can schedule each day. The availability of a clinic that a patient can conveniently seek care for a minor ailment without an appointment or steep cost to them can help to manage any overflow.
MIPS (Merit Based Incentive Payment System)
Created by CMS, the Merit Based Incentive Payment System is exactly what it sounds like: a payment schedule that rewards physicians with a higher percentage of reimbursement for meeting certain quality control metrics. The entire program is focused on improving the quality of preventative care, with the hopes of reducing the number of patients in need of long term care for preventable conditions in the future. The metrics include quality of patient care, how effectively they share information with other providers and the patient regarding their care, improvement of their care process and the cost of their care. While following some of the guidelines set forth can potentially create more work for physicians and their teams, and even make billing more complicated, the program offers some upsides. According to the Industry Profile, “Joining a model such as an accountable care organization or quality reporting program can take some of the pressure off ambulatory care providers by setting up a consistent revenue steam and rewarding care quality rather than quantity.”
More and more systems in the medical field are turning to electronic alternatives: electronic prescription writing, electronic patient management systems, electronic insurance billing systems and the electronic sharing of PHI between providers to coordinate patient care. Many of these technologies improve the quality of patient care and make for a smoother and more efficient care process. However, since most of these are legal requirements and standard of practice, it can be costly for providers to make the switch and difficult for them to find qualified staff.
As stated in the Industry Profile: “Revenue (in current dollars) for US ambulatory health care services is forecast to grow at an annual compounded rate of 6% between 2019 and 2023.” The success of facilities is going to be dependent on their ability to improve operational efficiency to maximize margins.
If you would like to discuss this article or schedule a private and complementary consultation, please contact Luis at Lou@nybbinc.com or 631-390-9650.