Health Care 2014: How should health care companies, providers, and insurers react to change in the industry?
A few months ago there was some news out of Seattle that made health care industry watchers sit up and take note. Group Health, a nonprofit which provides health care and coverage for over 700,000 people across Washington and Idaho, released a memo saying that they needed to cut $250 million in costs in order to react to the current volatility shaking the industry. This is a staggering amount of money for a regional provider. The difficulty of making these cuts is magnified by Group Health's ongoing need to invest in new technologies and react to industry and regulatory changes.
Of course, I could point to other examples of how changes in the industry are improving patient outcomes, creating new efficiencies, and opening up new avenues of information between patients, doctors, nurses, and administrators. The point is that change is coming to the healthcare industry and change is always a "double-edged sword". If companies aren't careful about how they manage and react to change, the promise of new investments may never materialize.
Caiman Consulting’s highest growth industry sector right now is health care. This year we’ve helped several companies with engagements ranging from content management and digitization, customer data analytics, and relationship management (customer growth and retention). We’ve also had the opportunity to speak with and listen to several health care and health plan CEOs speak about the future of health care. While there may not be consensus on where healthcare is headed, they do share common concerns. Rising costs is on top of every list.
Several factors are disrupting health care as we know it. Government policy-making and regulations are well-publicized, especially with most provisions of the Affordable Care Act taking effect in 2014. Even without the influence of public policy, there is a wave of change transforming the industry which raises many troubling questions. How can the industry contain costs and increase operational efficiency without sacrificing patient care? How will patient privacy be protected in the age of online medical records? The Medicare population is expected to grow from 44 million to 79 million people by 2030 - how will the system accommodate that explosive growth, and minimize seniors' need of institutional care?
There are no easy answers. One good first step is to have the right partners - companies that know technology and are experienced at working in changing environments. At Caiman we feel our job is to help companies strategically plan and prioritize their investments, and to help manage those investments so that they maximize return and minimize the need to cut staff or standards of patient care.