Most healthcare business innovators are contemplating how to succeed in today’s fast changing environment. Whether they are health systems preparing for greater risk, physicians anticipating a new payment world, or emerging companies hoping to develop 21st century interventions, health policy awareness and engagement is a strategic imperative to advancing business priorities.
Why a business imperative?
It may be hard to think about investing time and resources in the policy environment with all its unknowns when you already face day-to-day challenges. Yet the health policy environment is likely already having a major impact on your business in many ways.
First, health care is one of the most highly regulated markets in our country. Federal rules provide a complex web of standards and requirements for all sectors of the industry. States are also increasing oversight due to pressures to address costs, transparency and consumer protections. For example, in my home state of Colorado, the Division of Insurance just recently finalized new standards for network adequacy, influencing health plan arrangements with providers. Many states are considering similar or even farther reaching actions.
Second, the public sector represents an increasing portion of the total payer landscape. In 2014, federal programs provided coverage to almost 110 million people (Medicare, Medicaid/SCHIP, Military, Veterans Administration). The Affordable Care Act (ACA) has also afforded new coverage to an additional 12.6 million exchange enrollees and there are 8.2 million people with federal employee coverage.
The government’s role as a major purchaser acts as a driver of health policy, impacting its business partners and also influencing private sector actions. For example, while many health plans have been working on payment reforms for some time, recent decisions by the government to restructure Medicare payments to promote care integration provide significant momentum for private plans in pursuit of similar arrangements.
Finally, policy begets more policy. As we continue to see major shifts in the health care environment driven by policies to better align systems of care, health companies should anticipate refinement and change for years to come. We must remember the Affordable Care Act and new payment rules are in their infancy. The political environment will also drive policy tweaks or even major overhauls.
How can policy be used to advance business priorities?
Most successful businesses are evaluating policy to promote their priorities in some way. This involves evaluating anticipated changes in the policy environment and measuring them up against business needs. Organizations may conduct an environmental scan of federal and state policies and use of other analytic tools.
Many strategically focused organizations also use policy to drive business decisions. For example, even before ACA’s enactment, many health plans had already evaluated its implications and made business decisions about how aggressively they wanted to engage in the exchange market. Blue Cross and Blue Shield plans played big, having representation on virtually all exchanges with the goal of gaining market share in year one. Other plans decided to dip their toes in the water and entered fewer markets. These decisions involved a strategic analysis of the rules and regulations as measured against business priorities.
Industry-leading companies go a step further and try to shape the future policy environment. Here the question really is – Do you want to shape future policy or do you want it to shape you? For example, last year, health plans and other partners advocated for new site neutral payment policies in Medicare that would pay hospital outpatient departments at physician reimbursement rates. The coalition leading this effort spearheaded active lobbying, coalition building, and other advocacy efforts. They were successful in gaining new site neutral pay rules in the Congressionally approved budget (Section 603). This debate lives on and organizations continue to dedicate time and resources on both sides of the issue.
Four Ways to Deploy Policy Strategies
Depending on your company’s size and priorities, you may choose to engage in the policy process in a variety of ways, from limited to broader scale. Most larger health organizations today have a robust, multi-pronged approach to policy engagement that includes policy analysis, government advocacy, and campaign giving. If you are just getting started, you may want to consider these strategies:
Stay abreast of the latest. There are many resources that can help you stay educated about emerging health care policies. Government websites and health policy news sources are tools worth regularly monitoring.
Use scenario planning. Hypothesizing about what may be coming and developing multiple strategies to address a variety of policy outcomes can position you ahead of competitors. Policy experts can help guide this work.
Identify and align with partners. By leveraging your business relationships you can gain important insights about emerging policy issues. These partners should also be key targets should you decide to take a proactive approach to policy engagement through advocacy. Associations, such as ACAP, have been extremely successful in driving policy forward for health plans.
Weigh in, be heard. All health care businesses should build relationships with their local, state and federal officials. Policy decision-makers can help promote your goals.
Please let us know how DeltaSigma can help you define and implement a comprehensive health policy strategy.