With new payment structures that reward quality and outcomes, many provider organizations are now rushing to understand the true cost of care across the continuum (episodes, disease states, populations), rather than in traditional departmental or entity silos. To tackle this, they are taking action by implementing advanced decision support and business intelligence systems that provide the information they need in real-time vs. retrospectively.

[See also: Clinton urges IT pros to help healthcare.]

Children’s Hospital of Atlanta, Mission Hospital in North Carolina, Legacy Health in Oregon, St. Luke’s University Health Network in Pennsylvania and West Virginia United Health System are examples of organizations that have major initiatives in place to make cost data liquid and combine it with quality data. This blending together of clinical outcomes and business operations could not come at a more critical time, for our healthcare delivery system or for the patients it serves. 

In healthcare, we all know that without margin, there is no mission. But our path towards profitability has hit a roadblock. Forward thinking organizations understand that a traditional revenue cycle management approach has limitations in a system that is shifting towards capitation and outcomes-based payments. If revenue becomes fixed, the only way to drive margins is to drive down cost while maintaining or improving outcomes. 

This transition comes at a time when the cost of healthcare is becoming a mainstream consumer conversation. For evidence, look no further than the recent cover story of TIME magazine called ‘A Bitter Pill’.  While many may disagree on controversial points raised, what is undeniable is that it is stunning that an article on healthcare costs is the longest one in the magazine’s history.    

A week earlier, a New York Times story described how a college senior tried to help out his 62-year old uninsured grandmother by asking 100 hospitals to quote a price for her total hip replacement. Half of the hospitals responded, with quotes ranging from $11,100 to $125,798. The other half either could not or chose not to provide a price.  But there was a twist to the story – not only was his grandma’s hip OK, but it turns out she didn’t actually even exist. The writer was a student conducting research on healthcare costs.

Our perfect fire
So, whether the pressure is coming from new payment structures or from consumers, there is no doubt that the right answers are out there right now for healthcare, with many providers and other key stakeholders leading the way. The question is whether we are listening to the ideas and taking action – using this fire as an opportunity to build a new and very different healthcare system.

This is our 1871. 

This is our ‘perfect fire’.  

This is our moment.  And this will be our legacy.  

It's time to build.

Dan Michelson is the chief executive officer of Strata Decision Technology and a more than 20-year veteran of healthcare.