ACA of Texas Publishes "Three Critical Healthcare Industry Trends for Outsourced Business Services" in its Winter 2017 Magazine

March 16th, 2017

Three Critical Healthcare Industry Trends for Outsourced Business Services

By Kaulkin Ginsberg

2017 will, most certainly, bring about substantial – both positive and negative – changes to the healthcare industry. Kaulkin Ginsberg believes three of the most important trends to look for in 2017 will be the growth in patient lending and financing programs, clinical integration networks, and a physician quality reporting system that support Centers for Medicare and Medicaid Services (CMS) initiatives such as meaningful use, merit-based incentives, and alternative payment models.  These changes could have profound effects on companies focused on servicing healthcare providers.

Patient Lending and Financing Programs (PLFPs) – are a growing trend in the healthcare industry due to the increased costs of medical care and widespread acceptance of high-deductible health plans (HDHPs). PLFPs typically focus on zero-interest and/or low-interest lending to patients for treatment and may range anywhere from a few hundred to tens of thousands of dollars. With little to no interest from granting these loans to patients, and factoring in the cost of a vendor providing this service, you may wonder about the benefit of PLFPs for healthcare providers.

PLFPs offer patients an alternative to the large bills they may face from a procedure by breaking the cost into smaller, more manageable, payments. As such, patients are more likely to move forward with procedures and pay their bills on time, which reduces the need for delinquent collection services and tends to improve patient satisfaction. Considering the implications for reduced costs, improved collections, and better patient and community perceptions, the benefits of PLFPs are all too obvious.

Clinical Integration Networks (CINs) – are, according to HFMA, a collaboration between physicians and usually one hospital or health system to develop and sustain clinical initiatives that focus on delivering defined quality and value. Additionally, CINs are legal entities that must abide by rules established by the Department of Justice and Federal Trade Commission. Although they are legal entities, CINs are not combined entities (i.e., merger between two or more parties) since each party retains its independent status.

CINs initially gained prevalence through their interactions with hospitals and other health systems as a means for reducing costs, increasing transparency, and rewarding healthcare professionals for performance. However, it appears that a growing number of CINs are breaking away from hospitals and health systems, and starting their own independent physician-led associations. Aimee Greeter, senior vice president at the Coker Group, suggested at the annual Medical Group Management Association conference in San Francisco that the financial rewards of hospital-led endeavors were far too low at around 15 percent, while independent models could go up to nearly 50 percent – a sizable difference.

Another driving force is the growing prevalence of value-based care models in which healthcare providers are paid for helping keep people healthy and improving the health of those with chronic conditions in an evidence-based, cost-effective way. CINs support this initiative by providing a legal entity that tracks the success of value-based care programs by physicians, which aligns their interests with patients and insurance providers. Lastly, as legal entities, CINs can be sold by physicians to financial or strategic buyers for potentially hefty sums, making them even more appealing if fully controlled by the physician groups.

Physician Quality Reporting System (PQRS) – is a quality reporting program that encourages individual eligible professionals and group practices to report information on the quality of care to Medicare. PQRS gives participants the opportunity to assess the quality of care they provide to their patients, helping to ensure that patients get the right care at the right time. By reporting on PQRS quality measures, participants can also quantify how often they are meeting a particular quality metric.

In 2015, the program began applying a negative payment adjustment to participants who didn’t satisfactorily report data on quality measures for Medicare Part B Physician Fee Schedule covered professional services in 2013. Conversely, those who report satisfactorily for the 2016 program year will avoid the 2018 PQRS negative payment adjustment. Additionally, PQRS metrics are a key component of value-based care, and incentivize physicians under the Physician Value Based Payment Modifier program with the potential for a 0.5 percent increase in CMS reimbursements.

The common denominator between all three of these healthcare trends is the focus on patient satisfaction and outcomes through value-based care services. As a result of value-based care’s goals, outsourced business services (OBS) companies need to assess their current business model and its capabilities to support these critical initiatives. For example, should initiatives like PLFPs take off, those focused solely on bad debt services will likely see a drop in the volume of third-party delinquent account placements due to greater flexibility in payment schedules. At the same time, the ability to offer PQRS capabilities, as well as other value-based services, to healthcare clients should offset losses by shifting volume towards first-party work. Therefore, it is critical that those in the OBS industry consider the implication of these trends on their businesses over the next five-to-ten years.


About Kaulkin Ginsberg

Since 1991, Kaulkin Ginsberg has provided value-added strategic advisory services tailored specifically to the accounts receivable management industry and other outsourced business services (OBS) companies. The firm’s client-centric approach covers almost every stage of a company’s lifecycle. For more about Kaulkin Ginsberg, please visit www.kaulkin.com.

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