The growth of local collaborations and specialty pharmacies, and the significant change in focus on outcomes highlight industry banking trends impacting Central Florida throughout 2014.
“As healthcare entities try to get their arms around surging expenses, their goal is to reduce costs,” said Michael Miller, Vice President of healthcare banking for Fifth Third Bank in Orlando. “Institutional payers, insurance companies, Medicare and Medicaid are reducing what they pay for healthcare services. The only way for providers to make money is to reduce costs. The goal for payers is to focus on outcomes, not procedures, to reduce costs. They want to pay for the value and effectiveness of the treatment process, not the number of procedures in the process. Similarly, providers need to focus on improved outcomes to reduce treatment and procedural costs to be profitable under the lower reimbursement for payers.”
Even though healthcare costs as a whole haven’t declined, their rate of growth has slowed significantly over the last five years, noted Miller.
“However, not everyone is seeing this,” he cautioned. “There’s also a cost-shifting going on between employers, insurance payers and patients that’s led to increased payouts for some and reduced payouts for others. Right now, we’re in a transition phase. There’s been an upheaval in the marketplace and people don’t like change, but things are changing.”
Miller, Fifth Third Bank’s chief investment strategist Jeff Korzenik, and other local experts have been making the rounds in the community, discussing healthcare’s economic impact in Orlando.
“Healthcare has been a major economic catalyst through collaborations by companies in the Lake Nona Medical City area,” said Miller. “Florida Hospital, Nemours and Sanford Burnham are all continuing to grow there and produce new jobs, not only healthcare jobs, but construction jobs as well. Florida Blue is also playing a major role by taking substantial space in Medical City and focusing on better delivery of health insurance.”
Specialty pharmacy is another area for growth in 2014, said Miller, noting that more than 21 specialty pharmacies in Central Florida create a sizeable pool of skilled workers to assist in pharmaceutical delivery and treatment management.
“Drug research is expensive, leading to expensive treatments,” he said. “For example, treatment for Hepatitis C can cost more than $84,000 for a 12-week treatment, and if the patient isn’t compliant with the treatment, sometimes they have to start over. This can lead to increased costs for the insurer. So when the specialty pharmacy is monitoring patient compliance with treatment and ultimately the treatment outcome, it saves money in the long run.”
Because CMS and insurance payers focus on outcomes and scrutinize expenses, specialty pharmacy is providing better pharmaceutical services while also improving patient monitoring concerning treatment.
“They’re monitoring compliance with the treatment protocols, side effects, helping people work through health issues at home, or getting the healthcare they need at the most affordable price for everyone,” said Miller.
The recent great advancement in treatments for various diseases will reduce providers’ expenses long-term and create the best outcomes financially and for the health of the patient, said Miller.
“For diseases that we used to just be able to stabilize symptoms, we now have a cure,” he said. “For instance, Hepatitis C can now be cured with proper treatment. This means that both treatment costs are reduced by not having to treat the numerous medical complications the disease creates, and the numbers of deaths from the disease are being reduced in the long run.”
To help providers better control outcomes and lower costs, Fifth Third Bank provides capital and loans for physicians to acquire online reporting systems for treatment information by updating computers and software to make reporting more efficient.
“For example, upgraded software can allow providers to combine medical records from different locations and multiple healthcare providers,” he said. “Patients can access their information through an online portal that allows them to research diseases, find doctors and specialists, view their medical and drug history and even view their billing information. Doctors and patients alike will be able to easily pull up that information in any setting.”
The capital Fifth Third Bank provides will help providers create efficiencies in operations, improve client service and payment collections, said Miller.
“The technology will also ease the payment and information transmission process for healthcare providers and insurance companies after the treatment is provided,” he said. “For example, hospitals receive payment from insurance companies in a lump sum. That lump sum can represent 200 patients and thousands of treatments. Technology can now process those payment records and funds to allocate them to the correct patient’s accounts. This improvement in efficiency of tracking patient records, accounts, and payments through technology can reduce costs for everyone in the long run.”
