The document discusses recent healthcare reforms in the United States and their potential impacts. It notes that the Patient Protection and Affordable Care Act aims to increase insurance coverage while lowering costs. Additionally, the HITECH Act promotes the meaningful use of IT in healthcare to improve quality and reduce spending. Major effects may include 45-55 million Americans gaining insurance, increased use of electronic health records and pay-for-performance programs between providers and payers. Overall the reforms seek to align financial incentives around improved patient outcomes and care coordination.

1. Health-e-World ( Healthy World)
The Economist, Technologist, Business-men, Physicians, Politicians – even right down to common man –is looking at
global scenario and wondering how to combat the ripple of issues that impact Healthcare practices; while
unearthing a mechanism that would help turn such reforms into a platform for sustained growth.
Debates, Court-Orders, View-points, Political-alignments/resolutions/sops are possibly adding another dimension of
murkiness to an already clouded world economic situation (Euro-crisis, Crude-Oil Prices, Political instability, Trade
imbalances, Downgrading investments etc.,.). Amidst all this, if there’s one thing that no one across the world
would ever compromise its Health. Surrounded by deep research and active engagement by all Govts & Public
entities, it can come as no surprise when one sees reports talking about taking it to another level and the willingness
to push harder for growth. Pledging investments and enacting reforms seems to be the mantra to reap true benefits
for 2 of the most influential domains of our lives - (i) Life-Sciences & (ii) Healthcare.
The recent turn of events in the US, coming on the back of some structured reforms in the Healthcare space; leaves
us with a compelling need to review, assess, evaluate, deduce, determine and act so with a purpose of aligning with
the changes in order to enable and expand within the framework of this new paradigm relating to Care Continuum
and Health care outcomes (Quality & Costs).
An exercise such as this would largely benefit the participants of this USD 2.5 Trillion (poised to grow to USD 4.9
trillion over next 5+Years) Healthcare industry; as we trace by capturing the background, elaborating on the nuances
that impact them and then elucidating the methods that will lead to a more comprehensive & inclusive model
dotting the contour of doing business even in the changed environment.
The various articles, whitepapers, documentary notes dissect the underpinnings outlining the approach along with a
sprinkling of tools that could help the participants derive mechanisms for implementing the recommendations to
tackle the changing environment. While this is a directional document for future-proofing your Healthcare
business, it is also an invisible consultant that provides insights into where the industry is headed highlight some of
the key markings that reveal the elements in the path to get to there….
<< NOTE to Web-Master >>:
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primarily to obtain specific profile info of the participants / readers / parties that wish to sign-up for the
white-paper… Hence, don’t include the below notes into the main document… We should ask them to
create LOG-IN CREDENTIALS – Name, Phone#, E-MAIL ID, Title, Company, Area of Interest & Issues that
they would like to discuss/cover in future etc.,. >>………

2. Diagnosing the HealthCare Industry Reforms
World over there’s a conscious move to make Healthcare affordable. Govts across the globe have embarked on
several initiatives and the one common theme that they are all pushing for; seems to be to improve Quality of Care
while reducing the costs with specific emphasis on automation. So, if Australia, Bahrain, India, Israel, Malaysia, USA
(just to name a few countries) have publicly announced Wellness programs and have earmarked funds for some
innovative automation keeping futuristic needs in mind; it only depicts the real focus that Healthcare is receiving as
an industry.
Narrowing the focus to US Healthcare, one can examine the dynamics of the industry more so when it’s undergoing
multiple reforms. While there’s a cocoon of events that spread across the canvas of reforms, the need to string all
these together to invoke the elements that act as determinants of such a driving force is vital in order extract the
best for the public and the Healthcare industry as a whole.
It’s believed that the many facets of such reforms are either already leaving a footprint or is ideally positioned to do
so when unfolded in full, and hence there’s a clear need to understand its influence even as we learn about it /
debate on it. Given that the degree of influence could be wide spread, it’s therefore critical to reflect on its
outcome, by viewing the changes thro’ the lens of its impact on the existing Healthcare practices.
So, let’s begin with some of the key enactments that have caught the attention of the Govts/Law Makers, Public &
Supreme Courts as well…
 In 2010, Congress enacted the Patient Protection and Affordable Care Act (PPACA) in order to increase the number of
Americans covered by health insurance and decrease the cost of health care.
o Reform-Impact:
.
 The Supreme Court debated and after hearing the proceedings, Justice Roberts announced the
judgment resolving the constitutional challenges facing the 2 provisions made in the Patient
Protection and Affordable Care Act. The announcement enforces the need for any Individual to
purchase a health insurance policy that provides for a minimum level of coverage at the very
least. The court also upheld the Medicaid expansion program that gives funds to the States on
the condition that they provide specified health care to all citizens whose income falls below a
certain threshold.
 Translation:

3.  PPACA will create new Provider-Structures to enable Accountable Care Organizations
 It’s believed that roughly 45- 55 Million US Citizens will now enroll for Health Care
insurance of which 33 Million would have got added onto the system by 2018
 An additional 55 Million people are expected to reach the Age of 65 by 2020 pushing
the envelope on Medicare & Medicaid
 In 2009, the American Recovery and Reinvestment Act (ARRA) was introduced and the provisions under the Healthcare
Information Technology for Economic and Clinical Health Act (HITECH) promoted “meaningful use” of IT such as EMR/E-HR,
MPI, and such other tools that garnish the criteria for managing Healthcare dispensation. While this was a key influencer in
2010, there are specific expectations set for 2011, 2013 & 2015. More so when this viewed along the lines of the mandate on
Providers to adopt ICD-10 codes by 2013/2014 and the resultant emphasis to drive effective population & disease
management - leading to wellness programs.
o Reform-Impact:
 2010 proved to be the year organizations ramped up their approach to meet the Stages 1, 2
& 3 thro’ EMR adoption and Hospitals increased their EMR Adoption Model metrics (EMRAM)
in Stage 4 by more than 3%. Consequent to this positive momentum in the EMRAM, the
EMR-related applications increased significantly leading to doubling of the number of hospitals
entering Stage 6. The thrust towards Accountable Care Organizations becomes significant
because the approach is meshed with improvements in Quality of Care and reduction in Costs.
 Translation:
 $20B stimulus fund was distributed as part of the American Recovery & Reinvestment
Act (ARRA) to encourage Providers to use electronic health records (EHR)
 The ARRA/HITECH funding proved essentially important to the U.S. healthcare industry
because IT budgets dipped to less than 40% in 2010 and is now back-up to ~50%+
in 2011 & 2012. Hospitals have improved their capital expense spend from 46.5% to
48.3% of their IT budget to ensure compliance and to earn “meaningful use” incentive.
 There’s a likely hood of an additional spend in the range 14-15% to meet the
mandated requirements over the next 3-4 years and use of IT to enable adoption as
well as to drive efficiencies. It’s open secret that it encompasses EMR, ICD-10, RCM
improvements relating to Pay-for Performance and integrated business analytics.
 With Healthcare costs set to increase at 6.7% annually until 2017 to meet these
reforms & growth, there’s also this constant push to ensure that Quality of Care is
improved thus decreasing the spend on Care Continuum process incorporated thro’ Care
Coordination, Prevention measures, Patient Safety criterion, Disease management/control.
 Payers are pushing providers towards Pay-for-Performance which is estimated to see
an additional 5% increase. The estimate seems to have gained validity as roughly 80%
of the Providers seem to agree as against the 10% that have currently adopted it.

4. The expectations from all the above reforms and its associated impact can also be categorized & viewed in the
backdrop of its allied process(es) that constitute the entire chain from Patient to Provider to Payer and Population
as a whole…
A functional view of such a distributed model can be depicted as shown below for easy understanding –
Patient Centric Engagement - Privacy /Access / Safety / Communication
Provider Operational Management - Contract Adherence / Financial Administration / Clinical Compliance / IT
Payer Related Platform - Payment Integrity / Auditing / Responsiveness / Population Health Index
Research & Wellness - Clinical Trials / Drug Discovery & Formulations / Medical Devices Development
PATIENT Centric PROVIDER Specific
Efficiencies & Quality
Improvements
Improvements
Integrated
Outcome of Overall
REFORMS
PAYER Oriented LIFE-SCIENCES Enabled
Responsiveness and Population Research, Development &
Management Wellness Initiatives
Let’s examine the issues across each process block and see how they can be tackled. The solution elements involving
IT specific implementation will be covered in another article/document. This is more of a holistic view that leverages
each other’s process linkages & dependencies arising out of adherence to the structural reforms as mandated.
 Patient Centric Impact
 Patients having to opt for some Minimum Insurance Coverage bringing some 50M into ambit
 Employers are already beset by increasing Healthcare coverage cost by say at least 10%
 The Care Continuum process extends to home based care for overall cost reduction
 Communication and tracking vide Patient portal with focus on prevention based cure / care
 Patient Commitments or out-of-pocket expenses is expected to grow dramatically from $300B
in 2010 to $ 450B over the next 6-years at CAGR of 5.84%
 Patients expectations on Quality of Care, Response to situations is expected to grow 2.2x
 Bad debts arising out of Financial hardships of Patients have remained a constant factor of
costs even as costs increase Y-o-Y thus posing as an added element of risk for Providers

5.  Provider Specific Impact
 HIPPA implementation & PHI safety costs and compliance measures – a function of sunk cost
 ICD-10 has been mandated to be implemented by 2013 and Clinical Coding Integrity check
 Adopting EMR/E-HR along with clinical decision support systems for coordinated care &
Quality of care. Integrating Clinical and patient management data provides for cohesive analysis
 Engaging Physicians & Physician groups to enhance medication management and added referral
 Negotiate with Physicians to improve margins while knocking off support function costs for them
 Pre-Authorization, Eligibility tracking and incorporating within claims and document management
for medical records and doctor notes exchange with defined parties for validation
 Contract Management and tracking Over & Under payment by Modality / Physician. Also being
able to check for CPT level consistency across cure, impacting revenue & cost of claims
 Compliance & Governance Reporting with multiple level of auditing increases operational costs
and the need to infuse mechanisms to improve efficiencies & productivity can’t be ignored
 The physician-owned practices represent 54% of PCMHs and with hospitals wooing them into
their fold it’s believed that 22% have already opted for such a major amalgamation of entities.
 34% of hospitals reporting negative margins and subsequent reduction in cash reserves have
adversely affected their spend limits but with “meaningful use” stimulus and the sharing of cost
gains through Accountable Care model; have raised hopes for resurrecting hospital business
 The need to measure and monitor Quality of care and the impending Pay-for-Performance
criteria is pushing hospitals to consider utilization and innovative care continuum approaches
 Provider Oriented Impact
 Medicare / Medicaid reimbursements are expected to move from the current levels of 38% of
the US National Health care expenditure to about 47% within the next 3-4 years. This is
much like a mandated spend and margins are not a factor for consideration
 Population Health Management thro’ Wellness programs, Disease control will now form part of
the Payer expectations. Reduced Medicare payment in the case of preventable hospital
readmission
 Population Stratification and Patient identification for preventive and continuous cure increases
cost at one level – at least in the short term but improves overall expenses over long term
 Unable to directly influence Quality o Care on providers but engaging actively thro’ National
Quality Standards implementation program will help track Physician outcomes and derive
meaningful Pay-for-Performance index by Practice/Modality
 Deducing & Negotiating INS plans based on Demographical needs can be derived for better
cost control
 Increase in the Providers expectations for being more responsive and reasonable in pay out
within stipulated time period adds the costs from the point of adherence to such demands
 Conducting Recovery Audits, Quality Improvement audits, Compliance audits will also increase
costs at one level and this can only be compensated thro’ efficiencies and optimized work flow
framework

6.  LIFE-SCIENCES Impact
 Integrated view of diseases laced with demographic characteristics strains and tracked against
clinical trial outcomes would be critical for more coordinated care
 Research findings like Stem Cell advancements, therapeutic findings would help in better drug
discovery & formulations leading to medication that manages both preventive cure as well as
continuum of care thereby reducing Healthcare costs over time
 Comprehensive and related diagnosis & prognosis management also leads to reduced
Healthcare costs and would enable Physicians to adopt modern methods & techniques for
advanced cure / implementation
 Advancements in invasive & non-invasive implants lead to more sophisticated medication/care
 Disease vector and signature analysis will be used for more advanced diagnostic methods
As can be seen from the above by evaluating all of the impact and the measures that are needed to be taken this
article / whitepaper has covered some of the key aspects of how to manage the Healthcare business in the reform
driven world that US is propitiating.
The mechanics (Process, People/Culture, Engagement models), automation (IT – H/w, S/w, N/w, data) and business
recommendations (Use of Analytics, Interfaces) will be addressed through a separate article that would map against
the various implementation needs that the constituent participants of the Healthcare industry would need to meet
the desired outcomes.