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How best to navigate uncertainty in healthcare

nilesh chandra | health data management | 10 november 2016

This first appeared in Health Data Management.

Over the last eight years, the healthcare industry has faced a significant transformation. The recent surprise results of the US election have put some reform efforts into question and brought about significant uncertainty which will hamper decision making and threatens to slow some of the progress on some initiatives currently underway.

Given this is the time for many organizations to conduct their annual strategic planning/ budgeting, this uncertainty poses significant risks for paralysis in decision making. With that context, it is important to step back and reflect on the broader trajectory of the healthcare industry to better understand the areas where change is unlikely to have a major impact.

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- MACRA is here to stay: MACRA was passed as a bipartisan legislation and is unlikely to have significant revisions in the near future. Given that MACRA is the single largest regulation driving business models for Providers, this means that a significant amount of uncertainty surrounding reimbursements and revenues is simply out of the equation.

- Technology led disruption, the consumerization of healthcare, greater use of data analytics and business model innovation are likely to continue: These secular trends are enabled by advances in technology and changing consumer preferences, and not regulation. As a result, we still see these trends continuing into the future and business model innovation is likely to continue to drive the agenda for senior leadership as they look to offset revenues impacted by the shift to pay for performance.

- Maintaining a focus on cost optimization is always good business practice: Over the last few years, cost optimization has received a lot of attention and driven the executive agenda. As an industry, there are still opportunities to realize cost savings, whether in IT or in the supply chain. In planning ahead for uncertainty, now is a good time to revisit the cost base and redesign operating models to squeeze out additional efficiencies.

As the industry grapples with post-election uncertainty, it is important to remember that many of the secular trends behind the industry transformation are likely to persist, irrespective of any short-term change in regulations. Uncertainty does not have to lead to a paralysis in decision making. The industry will obviously adapt to whatever change comes its way.  Focus on these secular trends can drive the healthcare agenda and help industry leaders navigate the uncertainty that lies ahead.


Nilesh Chandra is a healthcare expert at PA Consulting Group

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