OM: Health Reform Reinventing Human Service Landscape

How Health Care Reform (& A Few Other Factors) Are Reinventing The Health & Human Service Landscape

Open Minds Executive Briefing; Monica E. Oss, 4/30/2014


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Where are we with health care reform? How will those reforms reshape the health and human service landscape?  What should management teams be thinking of in terms of strategies for thriving in a post-health care reform environment?  Those three important questions are the focus of this month’s OPEN MINDS management newsletter.

It’s clear that the 2010′s health care reform legislation and the parity legislation that preceded it in 1996 have had a significant effect on the strategic landscape for the field.  On the parity side, the Mental Health Parity and Addiction Equity Act has required that insurers and employers provide coverage for behavioral disorders at the same level as other illnesses. On the health care reform side, the Patient Protection and Affordable Care Act (PPACA) is having many effects on the health care field. Some of the provisions of the PPACA with the most significant impact on the care of complex consumers include:

  • Policy and political concerns about U.S. health care costs
  • New science with better definitions of “behavioral disorders”
  • More affordable analytics and communication

Rising health care costs are a growing concern in our national political discourse. U.S. health care spending as a proportion of GDP is at an all-time high – now over 17% of GDP (see Will Health Care Reform Bend The Cost Curve?). The continuing increases are due to a combination of factors – an aging population and longer life expectancy, increases in expenses due to chronic disorders, the expense of new treatment technologies, and more. These increased health care expenditures are causing issues with U.S. economic competitiveness, and creating political pressure to decrease health care spending. Medicare expenses, at 4.6% ($580.0 billion) of total spending is the single largest driver of health care expenses (see National Health Expenditure Projections 2012-2022). But, Medicaid expenses—and how they are being addressed by state governors and legislatures—are adding significant changes to the field (see Medicaid Spending & Enrollment Detail For CBO’s May 2013 Baseline).

At the same time we have had significant changes in policy and purchasing models, there is also a scientific revolution afoot. Our understanding of behavioral health disorders and their treatment is growing through “new science”, and with it the “best practices” in serving consumers. What is considered “best practice” is changing. Examples include the use of genetics and epigenetics to predict the incidence of illnesses and the effectiveness of treatments for schizophrenia, depression, addiction, autism, and dementias (see What’s New In Diagnostics For Cognitive Disorders? A Lot!). There are also new modes of treatment that span from remote monitoring (see New Remote Monitoring Applications) to support recovery, to long-acting pharmaceuticals, to neurotech devices (see The Evolving Neurotech Market: New Science Creating New Tools For Future Consumers), to virtual reality (see Virtual Reality Isn’t For Geeks Anymore), to applied models of cognitive behavioral therapy and cognitive retraining (see Why CBT? Why Tech-Enabled CBT?). These new modes of treatment are offering more options for consumers to chart their own path to recovery.

Finally, we have the decline in the costs of both analytical technologies and communication technologies. The cost of data storage and the tools to analyze large amounts of data has declined precipitously – making “big data” a reality within and among many organizations in the health and human service field (see Why & Where ‘Big Data’ Matters In Health & Human Services and Big Data To Survive, Sustain & Succeed). At the same time, the cost of telecommunications tools—hardware, software, and bandwidth—is on the decline. This has enabled every area of commerce to push out to consumers a wide range of data-driven tools, and the ability to connect real time with consumers on the use of those tools.

Taken alone, each of these megatrends has the potential to greatly change the behavioral health treatment landscape. But taken together, and combined with the parity legislation and the PPACA, the disruption to the field is both stark and rapid.

For clinical professionals, these trends have implications on their role in the delivery system. The preference of insuring organizations to move away from fee-for-service to value-based reimbursement models favor larger organized systems of care, rather than private practices. In addition, the use of technology is affecting clinical practice in two ways. First, e-health is eroding geographic boundaries to service delivery. And both payers and consumer prefer “tech-enabled professionals” who are able to use decision support tools in clinical practice.

For service delivery organizations—from hospital systems to community mental health centers—the insurer preference for value-based contracts with provider organizations is creating competitive pressure on two levels. First the competition for consumers, with intense competition for partnerships with insuring organization who direct consumer referrals.  Second, the cost of the infrastructure and technology for new value-based contracts, for new compliance requirements, and for consumer preference and engagement, is increasing the size and scale needed to compete.

Finally, for consumers in need of behavioral health treatment services, the new environment is one of challenges – but also has opportunities for better care. At a macro level, the reduced rate of uninsured people the U.S. coupled with parity is creating the access to coverage for behavioral health services that have long been missing in the U.S. system. And the political pressures to reduce overall health system costs is fostering more consumer-centric models of service delivery, with more rapid adoption of new treatments and tech-enabled services. For the engaged consumer, armed with new technologies, the opportunity to direct and participate in treatment is greater. But despite these mega changes in the field, the proportion of the total cost of health care services borne by consumers continues to increase – which will continue to raise issue of equity.

So what of the future of behavioral health services? The continued path of “integration” of behavioral health in terms of service financing and care coordination will continue. The pressure to create “value” for funders will force provider organizations to manage populations rather than services; to invest in new coordinated service delivery models for the consumers with the most complex needs; and to create innovative alternatives to institutionally-based treatment. The role of clinical professionals will be altered by technology – by the need to embrace the use of decision support tools and the shift to tech-enabled interfaces with consumers. For consumers, changes in policy and technology offer new choices and a new and more active role in treatment planning.

For all stakeholders, these disruptive innovations present both challenges and opportunities.   What we can be certain of is that the role of every stakeholder – including consumers – will be different. Understanding the framework for change is key to minimizing the negative effects and capitalizing on the promise of innovation – and right now, the key to that framework is health care reform.

Oss, Monica E. (2014, April). How Health Care Reform – And A Few Other Factors – Are Reinventing The Health & Human Service Landscape. OPEN MINDS, The Behavioral Health & Social Service Industry Analyst.