Confronting Disruption in Healthcare

The message is clear. Tech companies and others are determined to disrupt healthcare.  Payers think it is too expensive. Patients think it is too complex.  Meanwhile, physicians are getting paid less to do more and hospitals are providing care to more complex patients with fewer resources.  No one is happy with the inefficient healthcare system as it exists today.


Disruption brings opportunities, as well as challenges. Your healthcare organization  can meet the disruption head on if it pays attention to the following trends:

  • Importance of data analytics. Thriving healthcare organizations invest in the capability to use data analytics to manage the effectiveness and cost of health care. Mercy Health Network (MHN) developed a comprehensive data warehouse that aggregates data from over 150 sources, with plans to expand to over 500 sources.  These sources include electronic medical record clinical data, billing records, scheduling data, hospital demographic data, public exchanges, and payer claims data feeds.  MHN uses this data to anticipate patient needs and proactively engage patients in self-management.  This type of data can also be used for predictive analytics to determine needed interventions while the patient is in the hospital, such as determining which patients are at risk for falls or re-admissions and developing a care plan to address these risks.
  • Patient-Centered Marketplace. MHN is focused on putting its members at the center of its business strategy. Consumers are making more of the decisions on what  healthcare services to consume and which providers to use. Consumers are demanding more cost and quality transparency from providers.  Is your brand associated with high quality in the minds of your patients? Do you deliver an exceptional patient experience? Are you being transparent about how much the patient will pay for her care, or is she going to be surprised (and shocked) when she gets the bill? Are you aligned with your hospital-based providers so you can estimate what their charges will be?
  • Need for Cost Reduction. Purchasers of health care, including the government, employers and consumers, are increasingly cost sensitive. To be seen as the provider of choice in your market, your healthcare organization must deliver value to the community: better care and better health at a lower cost. Traditionally, cost-cutting efforts are focused on areas such as supply chain, revenue cycle, clinical documentation improvement, and labor productivity.  What is needed, however, are transformational changes to the cost paradigm in health care. Are patients receiving care in the lowest cost setting? Are nurse practitioners being used effectively? What controls are in place to ensure patients are receiving medically necessary tests and therapies? Are you using data to coordinate your patients’ care to ensure they receive needed interventions.

As General Counsel of MHN, I clearly see an important role for the legal team in these efforts. My priority as Mercy Health Network’s General Counsel is to ensure the Legal Department has the right culture and is appropriately staffed to meet the needs of our organizational clients.

To be effective, Legal staff must be responsive and understand their role in managing risk. If Legal is a “black hole”, the clients will find ways to work around them, which increases the risks to the organization and leads to litigation and non-compliance.  Legal staff also need to understand their role in providing proactive, strategic guidance. They need to be “yes” lawyers, without becoming rubber stamps, carefully gauging and advising on the risk of a particular strategy.

Employing outside counsel can be an effective way to add needed competencies.  I have used alternative fee arrangements to manage these expenses.  These arrangements include fixed-fee retainer agreements for ongoing needs and not-to-exceed fees on discrete engagements.  Active engagement and management is also key.  Outside counsel are most effective when they have an in-house lawyer advising them on who to interview and how to get needed information. This approach also eases the concerns of fellow employees who are not accustomed to being interviewed by attorneys or being questioned about what they did and why.

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