Current Issues in Healthcare Administration and Management

October 1, 2020

There are many healthcare management challenges in the U.S. today. Some of these problems have evolved slowly over time as a result of growing, complex, and diverse healthcare offerings. Rising costs in almost every area have been impacting hospitals and other healthcare providers as well as patient willingness to seek care.

But rapid change has come to healthcare in the form of a worldwide pandemic courtesy of Covid-19. Beyond the death tolls and the grinding of day-to-day life to a halt, the pandemic has prompted a reckoning throughout the country’s healthcare infrastructure, upending the economics of medical care and how it affects doctors, hospitals, insurance companies, and pharmaceutical manufacturers.

Regulatory changes have also introduced issues for providers. Other economic challenges in the healthcare industry have appeared more recently as a result of political fighting, economic changes, and technology innovation. Cybersecurity and the protection of patient records are also growing concerns.

General Healthcare Management Problems

It is important to note the impact of fraud, waste, and abuse created by healthcare providers. AMA Journal of Ethics reports: “coding and misrepresentation of clinical information (fraud) cost more than $100 billion annually and can result in unnecessary procedures and prescriptions. Whether physicians are being trained or encouraged to commit fraud within corporatized organizational cultures through contractual incentives (or mandates) to optimize billing and process more patients is unknown [1].”

Patients are also a part of the issue, according to a survey conducted by PLOS: “Physicians reported that an interpolated median of 20.6% of overall medical care was unnecessary, including 22.0% of prescription medications, 24.9% of tests, and 11.1% of procedures [2].” Filtering out these unnecessary visits and waste will help control costs and better manage valuable outcomes.

IT Management Problems in Healthcare Organizations

While information technology (IT) opens the doors for resolving some healthcare management issues, it also raises issues of security and regulatory compliance to patient protection laws such as the Health Insurance Portability and Accountability Act (HIPAA). The past years have seen an increase in cyber attacks on IT systems. According to Keeper Security: “Nearly two-thirds of healthcare organizations globally have experienced a cyberattack in their lifetime, while 53 percent were attacked within the last 12 months [3].”

A healthcare issue of growing concern is the focus on behavioral and lifestyle choices of patients to better manage their health. Adherence to treatment plans and prescription usage are helpful but patient choices such as diet and exercise also play a large role in their health.

Another health management issue is the change to value-based care in an attempt to incentivize lower-cost care for patients. Quality over quantity is the goal and providers that can resolve this issue stand to receive increased funding over competitors. Such an organizational problem will require providers to rethink standard practices and billing.

Financial Issues in Healthcare Organizations

A key financial issue facing healthcare managers is offering affordable healthcare rates despite rising costs. Parts of these rising costs are due to increased costs in pharmaceuticals, insurance premiums, and healthcare spending.

“Pharmaceuticals have been under public scrutiny following repeatedly large price hikes for vital drugs. Retail prices for 460 prescription drugs are increasing by an average of 5.2 percent in 2020 — more than double the projected rate of inflation for this year”, according to data analyzed by 3 Axis Advisors, a healthcare research firm [4].

Improvements in healthcare also allow for a larger aging population and the “the number of Americans ages 65 and older is projected to nearly double from 52 million in 2018 to 95 million by 2060, and the 65-and-older age group’s share of the total population will rise from 16 percent to 23 percent” according to the Population Reference Bureau [5].

Those over 60 require increased use of healthcare under tighter budget restrictions. In addition, healthcare spending has “between 2014 and 2018, per-person yearly spending, for those with employer-sponsored insurance, climbed from $4,987 to $5,892, an 18.4% increase” according to the 2018 Health Care Cost and Utilization Report [6]. Financial healthcare management issues can also include components such as handling payroll, patient data entry, processing insurance claims or leveraging medical coding services, medical billing and denial management, and negotiating repayment.

For some providers, the payment for services rendered can be delayed over long periods. Dealing with these internal cost considerations for healthcare revenue cycle management and healthcare accounts receivable can detract from a focus on value-centered patient care. Part of the problem is the complexity of patient billing which is something that many patients cannot easily understand.

Regulatory issues in healthcare also impact financials in several ways. The introduction of the Affordable Care Act (ACA) and subsequent upcoming repeal will impact providers as they pay to adapt to these changes each time. In another example, providers were required to upgrade to a uniform coding system referred to as ICD10. This coding change introduced complex issues that required extensive and possible costly training to update providers to the new system.

Economic Challenges in the Healthcare Industry

Healthcare management issues are also being mitigated by mergers between providers of all levels. These merged organizations can benefit from economies of scale and other cost benefits such as interoperability and consolidated healthcare leadership.

“As the business of providing healthcare becomes more complex, so does the process of treating individual patients. Instead of looking through a myopic lens that only allows a provider to see a patient with an illness, clinicians and their multidisciplinary teams are now collecting socioeconomic information as part of the care process. Where a patient resides, employment, family situation, etc. all affect an individual’s health and clinicians should include this information throughout the care process” notes Health Catalyst [7].

Disruptive technology is promising the potential for amazing advances in healthcare administration. First is the use of medical devices to gather health information directly from patients such as pulse, blood pressure, and blood sugar monitors. These “connected devices” are part of the growing Internet of Things (IoT).

“The global internet of things (IoT) healthcare market valued $56.1 billion in 2017 and is expected to reach $267.6 billion by 2023, witnessing a CAGR of 30.2% during the forecast period (2018–2023). Among all components, medical devices held the largest share in the market in 2017. Further, in the category of medical devices, wearable external devices contributed the highest revenue to the market” says P&S Intelligence [8].

The prevalent use of smartphones by patients offers a unique opportunity to manage healthcare problems with mobile applications. Providers can offer services like appointment scheduling, billing, as well as records and test result communication. In tandem with increased communication with patients, telemedicine offers the benefit of long-range communication between patients and doctors and appears to be well received by both healthcare organizations and millennial patients.

Technology innovations also allow providers to set up cloud storage for medical files allowing quick and convenient access from any location. Providers must address the security concerns here including those created by organizational problems such as improper employee training. While some health records were compromised due to malicious activity, a large portion was due to unintentional disclosures by staff.

Finally, providers have the option to use big data and artificial intelligence analytics in many areas to improve efficiency and identify problem areas. Staffing is expected to become problematic in future years with projection from a report from the Association of American Medical Colleges (AAMC) that the U.S. will face a shortage of between 54,100 and 139,000 physicians by 2033 [9].

While it is possible to do more with less and leverage solutions to these problems to efficiently utilize a decreased provider pool, too much of a deficit will impact the cost of receiving care. This is especially true considering the length and cost of educating and training medical providers. Healthcare staffing services are available to mitigate the effects of project needs.

Healthcare and Covid-19

Already, the coronavirus has led to sweeping changes in who can receive care and how they access it. Millions of Americans, newly out of work, are also newly uninsured. Millions more who still have insurance have been forced to delay necessary but noncritical treatments. At the same time, doctors across the country have been granted broad flexibility to treat patients remotely, using telemedicine, instantly reshaping services ranging from routine checkups to addiction treatment.

According to the Kaiser Family Foundation: “With more than 31 million workers filing unemployment claims between March 1 and May 2 as the coronavirus crisis hit the nation’s economy, a new KFF analysis estimates 26.8 million people across the country would become uninsured due to loss of job-based health coverage if they don’t sign up for other coverage. May will become eligible for ACA coverage through Medicaid or Marketplace Tax Credits [10].”

Another effect of the Covid-19 pandemic is in healthcare employment. “The healthcare industry is typically one of the fastest-growing industries, with an average of 8,500 jobs being created every month. However, in March 2020, only 200 jobs were created. The industry saw its largest decline in the last three decades, with 43,000 jobs cut, according to the US Bureau of Labor Statistics [11].”

Because of the for-profit nature of the U.S. health system, services must be cut to balance the books. Unfortunately, for healthcare workers, that means they’re on the top of the chopping block. Salaries are always the largest expense at any medical facility and thousands, if not millions, may be joining their patients in need of medical assistance.

Although the Coronavirus has created significant changes to healthcare in the U.S., some changes may be viewed as positive, including:

Acceleration of Telemedicine
Increase in HRAs
Greater healthcare preparedness
Greater reliance on nurse practitioners or physician assistants

It remains to be seen how many of the Covid-19-related changes to healthcare will be permanent. As positive cases and death counts dwindle and the possibility of a vaccine becomes closer, some of these effects may be temporary. Others may become permanent. Like much of the world during the pandemic, it’s a case of wait-and-see.

Final Note on Management Problems in Healthcare Organizations

Many issues are arising within this complex healthcare system. Providers are facing increased costs, regulatory changes, coding updates, inefficiencies, security issues, and disruptive technology.

A key challenge is increasing interoperability between disconnected providers and leveraging technology to make up for decreasing staff and an improved focus on value-based care over quantity treated. This includes improving preventative approaches to managing population health.

One interesting option to reduce costs is to outsource vital tasks to a trusted third-party healthcare service organization. While many problems are facing the healthcare industry, the future is bright and improving daily.

Contact Nearterm today for more information about our services.

Nearterm helps healthcare organizations meet their staffing needs as part of our overall 360 RCM Managed Services. Our national client base includes hospitals, clinics and other provider types that need healthcare professionals who are credentialed, certified, vetted, professionally managed, and located in the United States.

Nearterm resources can work from remote locations and/or on-site, whatever your organization requires of them. Contact us for a consultation and quote for healthcare professional services today.

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