Changing payment systems, aging population, a shrinking Medicare Trust Fund, the growing use of Medicare Advantage, massive uncertainty in all three branches of the Federal government, all impact how healthcare providers plan for the future. Such an impact falls just as heavily on the technology vendors that serve them.
In light of the NIH study outlined elsewhere in this week's issue, we turned to one of those vendors to see how anticipated changes are affecting their plans. Bill Miller has been CEO of WellSky (formerly Mediware Information Systems) since July, 2017.
"The so-called 'Silver Tsunami' is already creating a 'silver rush' in post-acute care," he told us. "As Baby Boomers generate the need for more non-hospital and innovative care, more health care providers and companies than ever are turning an eye to this burgeoning area of care that has been previously overlooked."
To cope, he continued, post-acute care providers have to begin to leverage their data to lead the revolution toward what he calls "intelligent care." The path forward tracks through predictive analytics. To get there, WellSky has been recruiting brain-power from academia, from competitors and from other healthcare companies, he said.
"Our new management team is a different set of people," Miller explained. "85% of the team is new and has come from large providers, payers, and EMR companies such as Cerner, Optum, and McKesson; people with depth of experience. Not only has our management team grown but revenues have doubled, the average size of deals we are in has tripled, and our overall staff has gone from 420 to over 1,100. WellSky Home Health and WellSky Hospice (formerly known as Kinnser Software) are leading the charge for us."
Asked what is driving this, Miller could have cited his leadership or the quality of WellSky products and services but he did not, diverting instead to industry-wide influences. "There is a tsunami in post-acute care," he began. "The 'Big Three' see an opportunity to provide software across the PAC continuum. This has created an atmosphere where they are all becoming pretty aggressive. But this is not unique to healthcare; it has happened in every industry to some extent: opportunity is followed by capital, leading to consolidation. Today we are seeing more capital available than there are places to put it. Investors are pursuing medical devices, IT, and acute care in addition to us.
Miller sees the rush to move capital into post-acute care as a net benefit for technology companies. "We are looking at a future that features mostly large providers but both large and small payers," he said. "And the momentum on the payer side is not going to slow down. They will continue to either invest in, partner with, or engage with post acute care providers. I see it every day in our client base. Look at Humana as an example, with their acquisitions of both Medicare home health and non-medical home care providers. Payers are motivated to direct 'steerage,' moving their members to the most cost-effective care location."
For this reason, he concludes, payers will continue to acquire providers. "It all depends on the economy," he continued. "The intent of the dynamics will not change, to save money, to move providers toward taking on more risk. I anticipate still more change, strange bedfellows, more capital, and significant changes in reimbursement policies that will affect us as systems providers."
He quickly added that this net benefit depends on tech companies' ability to continue to deliver on their commitments, continue to excel at what they do, and partner with those providers that are going to thrive. The key indicators, in Miller's view, will be how companies like his continue to provide good claims platforms, enable cross-provider interoperability that promotes a longitudinal view of patients across systems, and, perhaps most importantly, make significant investments in security.
Long existing more in executive planning meetings than in practice, interoperability is now possible because of infrastructure investments made during the early years of the recovery, 2009-2011. Miller believes it is more than merely possible in 2019. "Look to what the payers want," he warned. "The insurer has a voice, a loud voice, that will force competitors like Cerner and Epic to cooperate. They will not be given a choice."
"Protecting patient data has been lax, especially within regional hospitals," he complained. "As dollars shift into PAC even more, data becomes more and more important. Therefore, it becomes inherent on us to treat that data securely. In healthcare, especially among smaller providers, data security sophistication is below the mean. But make no mistake, we will not exit 2019 with the prevailing philosophy of 'it won't happen to us.'
"There will be fines but the hit to reputation will be worse. Healthcare providers seen to be lax with data security will quickly find themselves with empty beds and idle staff. Nobody possesses more sensitive data than healthcare does, more than Marriott and Target combined. Even the type of physician someone is seeing becomes sought-after data. Healthcare has to be as iron-clad as government is, perhaps more."
As a closing comment, Miller told us to be on the lookout for new acquisition announcements in the new year, fueled by investment partner TPG Capital, based in San Francisco.
©2018 by Rowan Consulting Associates, Inc., Colorado Springs, CO. All rights reserved. This article originally appeared in Tim Rowan's Home Care Technology Report. homecaretechreport.com One copy may be printed for personal use; further reproduction by permission only. firstname.lastname@example.org