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Clinical Integration: Potential Tool to Stem Expected Health Care Spending Increases

Friday, July 31st, 2015

A new report issued by the actuaries at the Centers for Medicare and Medicaid Services estimates that healthcare spending will rise at an average rate of 5.8 percent over the next decade. This, they report, is due to a better economy, more people covered by insurance and an increasing number of Americans hitting their golden years.

By 2024, according the CMS estimate, healthcare spending will have grown to become 19.6 percent of the nation’s gross domestic product!

To put things in perspective, in the years immediately before 2014, the average increase in healthcare spending was reportedly around four percent per year. But the CMS projections now suggest a growth rate of 5.4 percent annually between 2014 and 2019, with a rise to 6.2 percent between 2019 and 2024.

Why? Expected healthcare spending increases are being attributed to a mixture of people who are now more willing to spend their own money on care because of signs of a recovering economy, an increasingly elderly population projected to use more medical resources, and an increase in some drug costs.

A worried Tevi Troy, president of the American Health Policy Institute, told HealthLeaders Media: “Medicare/Medicaid spending is starting to crowd out all other spending to the point where all government spending is going to be for health care and service to the debt.”

At the moment, it seems that high-deductible insurance plans and reduced payments to doctors are among just a few things currently holding down the rate of spending.

Skyrocketing healthcare spending is a clear and present danger, and a URAC policy paper published just last month suggested that this sort of fiscal crisis could be on the horizon under the largely unchecked conditions of the present. It noted that:

Without assurances that the purpose, structure, and activities of a provider organization are aimed at producing better care at lower cost, aggregation could lead to higher prices with no improvement in quality or increase in value.

While not simply lamenting the potential future, the paper suggested a possible way to remedy the problem of expansion without proper governance through the application of clinical integration. CI is an accreditation product available through URAC.

URAC’s “Clinical Integration and Accountable Care: Validating Compliance and Driving Integration. Is It Possible to Do Both?” white paper noted that a successful application of clinical integration standards, as part of an overall accountable care framework, can help “validate performance” and thus hopefully lead to saving money by reforming several key areas in the provider community:

  • Leadership and governance;
  • Alignment of providers;
  • Clinical management and coordination; and
  • Integrated infrastructure.

It was additionally noted in that paper that “[t]he clinically integrated network must demonstrate that it is delivering cost efficient, high-quality care while improving the overall health of the population it serves.”

Noting that URAC offers accreditation for both clinical integration as well as ACOs, it was pointed out:

URAC standards and accreditation process assures an organization, either a clinically integrated network or an ACO, has the proper structure, governance, tools, and infrastructure to demonstrate it can manage its population.

Clearly, through both the URAC white paper and the subsequent CMS report, there would appear to be a need for the healthcare community to adopt business practices that will be sustainable in era of tightened resources and increasing demands on performance.

Clinical integration seems to be a viable tool for bringing about positive change in that regard.

As AHPI’s Troy said, “we have to have a more value-driven health system. It can’t be dependent wholly on third-party payments… It’s easy to say, but getting there is hard to do.”

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For 25 years, URAC has been the independent leader in promoting health care quality through accreditation, education, and measurement. URAC offers a wide range of quality benchmarking programs that reflect the latest changes in health care and provide a symbol of excellence for organizations to showcase their validated commitment to quality and accountability. URAC’s evidence-based measures and standards are developed through inclusive engagement with a broad range of stakeholders committed to improving the quality of health care.

For more information about URAC, contact us.

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