Bill FeraIn the wake of declining payments and the ongoing transition to a system aimed at rewarding, or penalizing, based on patient outcomes, healthcare providers face continuous pressure to drive down costs, improve processes, and be better stewards of resources. The industry's next imperative is the pursuit of innovations that can reduce costs and create value.

Several key areas illuminate the trend toward delivery system innovations.a

Care transition programs seek to better coordinate care for patients at high risk of returning to the emergency department (ED) or to inpatient care. Penalties for readmissions and “never events”—and the emergence of new bundled payment programs—have triggered the next wave of transition initiatives. Innovations range from centralized call centers that schedule follow-up appointments with primary care physicians to personalized audio care instructions and educational videos that can be reviewed by smartphone or computer. 

Evidence-based guidelines and consensus-based best practices yield better information on which treatments work best for which patients—and whether the benefits are in line with the costs. From processes and checklists designed to standardize care to clinical and operational protocols, these innovations help reduce unwarranted variation in care and guide the delivery of high-quality outcomes at lower cost.  

“Lean” production tools reeducate the healthcare workforce to identify waste and redesign processes for removing it. The Lean approach has helped accomplish a wide range of goals, such as reducing length of stay in the ED, decreasing stock-outs in materials management, and minimizing patient wait time.

Population health management programs stratify patients into well-defined risk groups and execute different care strategies based on each group’s needs. These programs require robust business analytics and data management, captured in a way that facilitates structured decision-making. Aided by the right technology, providers can continuously innovate by using appropriate care interventions, proactively managing patient outreach, and monitoring compliance with evidence-based guidelines. 

e-Health initiatives can extend capabilities and patient interactions beyond traditional care settings. From a cost management perspective, e-Health offers a robust value proposition for providers, including conducting follow-up visits to avoid readmissions; providing physician-to physician consultation to improve diagnoses and potentially decrease emergency flights and patient transfers; connecting with patients between periodic appointments for motivation, course correction, and overall disease management; and addressing physician workforce shortages. 

In health care, the need for new approaches to historic industry challenges has never been more acute. Containing costs without cutbacks in coverage or services calls for new ways of thinking and acting. Through such evolving approaches, many providers are reaping the benefits that innovation can have in ensuring success on the next horizon of integrated, value-driven, patient-centered care.


a. These trends are discussed in a recent Ernst & Young report, New Horizons: Innovation, for the healthcare industry.

William A. Fera is a member of the Ernst & Young LLP Advisory Health Care practice and is based in Pittsburgh, Penn. Follow Bill on Twitter: @BillFeraEY 

The views expressed herein are those of the author and do not necessarily reflect the views of Ernst & Young LLP.

Publication Date: Monday, October 07, 2013