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May 29, 2019

IN THE KNOW: ACHE Face-to-Face Educational Event

ACHE Face-to-Face Educational Event: The Financial Implications of the Push from Inpatient to Outpatient Care

Meridian’s John Pollock and Sheila Schmidt Recap this Event

“Sheila hosted a lively discussion about the trend toward outpatient care with panelists Todd LaPorte, CEO of HonorHealth, Phil DeBruzz, FACHE, Principal at the Innova Group and Scott Nordlund, Chief Strategy and Growth Officer at Banner Health.

The panelist agreed that the trend is here to stay and will likely start to accelerate as more vertical integration and consumerism overtake the industry. High deductible health plans are causing consumers to have a vested interest in changing behavior regarding their health. Meridian is wholeheartedly behind this strategy. The move to outpatient care and a focus on population health is the way to fundamentally change the industry and it starts with a change in patient behavior.  

Todd shared that HonorHealth’s gross charges from inpatient care are 56% and the inverse (44%) is from outpatient. This is a massive shift from just a few years ago. Todd believes that the macro drivers of the trend include; population health, consumerism, and systems and payors treating patients at the right level of care. Phil also pointed out that in 1985 only 10 states had obesity issues. Now, all states have massive obesity issues. This is a systemic problem that needs to be addressed and what could make a meaningful impact is preventative care that can be administered in an outpatient setting.

Scott discussed how the trend toward outpatient care will change the relationship with the acute care setting. The shift has huge implications towards the power dynamics as hospitals are no longer at the center of the helm. Health systems are finding the need to become even more physician friendly. In an effort to keep patients, Banner is focusing on creating an “experience” for their members and concentrating on creating a healthy community.

Phil talked about the need to knit the services together. Both inpatient and outpatient care are changing fast while the cost structures at these big systems are not keeping up with the change. This is leaving the opportunity for light cost structure organizations to disrupt the industry. For example, CVS’ strategy will play in the space where hospitals have historically played. Their Minute Clinics are going to expand their service offering by treating chronic conditions. They are aligning with accountable care organizations. CVS has thousands of points of care and is a potential disruptor in the industry.

Vertical integration is key to population health. When the payor and provider align, so will incentives. This event brought up an interesting conundrum. At present, the largest hotel company is Airbnb's, the largest cab company is Uber, and the largest retail store is an Amazon. Is it possible that the largest healthcare company in the future will not own an acute care hospital? Hospitals seem to become cost centers in the delivery model of the future. Since healthcare is so personalized, some panelist said that it will be hard to “Uber-ize” the industry. One thing remains true, the industry will always change and we are thankful for meetings like this where we can get together and discuss the future of healthcare with acclaimed professionals in the industry.”