Public and private payers, including Medicare and some of the nation’s biggest health insurers, plan to hasten the migration of the healthcare reimbursement system from pay-for-volume to pay-for-value. The acceleration in the pace of change from fee for service to risk-based reimbursement is likely to reshape the healthcare business over the next three to five years.
While all healthcare stakeholders will be affected, the pioneers of this approach to healthcare financing will be large, integrated delivery systems (IDNs) and accountable care organizations (ACOs). Some of these organizations already take varying amounts of financial risk, but the percentage of their revenues coming from shared savings, bundled payments, and global or partial capitation is certain to rise in the next few years.
To prepare for these imminent changes, these organizations must rethink their near-term financial and clinical strategies. They must consider not only how to make the transition to new payment models, but also how to maximize their reimbursement in the new world of population health management. A key part of their strategies will be health IT, which will continue to evolve in tandem with the changing reimbursement landscape.
Released today, iHT²’s latest research report,”12 Things You Need to Know About Value-Based Reimbursement” draws insights from industry analysts, leading healthcare providers, and healthcare IT leaders to describe the strategies some large healthcare systems and ACOs are using to prepare for the impending acceleration of the shift to value-based reimbursement.
The report was put together by:
– Brian Drozdowicz, Senior Vice President & General Manager, Caradigm
– Robert Fortini, PNP, Chief Clinical Officer, Bon Secours Medical Group
– Marcia James, Vice President for Accountable Care, Mercy Health System
– Mark Wagar, President, Heritage Medical Systems
– David Wennberg, MD, MPH, Adjunct Associate Professor, The Dartmouth Institute and of Medicine, Chief Executive Officer, Northern New England Accountable Care Collaborative
Key takeaways from the report include:
1. The conversion of the healthcare industry from pay-for-volume to pay-for-value isn’t going to be easy or pretty, and it won’t happen until providers decide they have to assume risk, Wennberg says. “That’s the chicken-or-egg issue people will have to figure out from a policy standpoint. It’s just a lot easier to do what you’ve always done and make money at it than to take risk if you don’t have to.”
2. A certain amount of scale is required for success. Whether an ACO is hospital-led or physician-led, it needs deep pockets to build the necessary infrastructure and hire sufficient care managers.
3. Providers will have to become accustomed to the idea of delivering high quality care within a budget.
The paper provided the following twelve recommendations to consider in making the transition to value-based reimbursement:
1. Make sure you have enough primary care physicians and other clinicians to provide comprehensive preventive and chronic care
2. Restructure physician comp to align provider incentives with value-based care.
3. Create patient centered medical homes or use existing PCMHs as building blocks for your ACO.
4. Focus on care management for high-risk patients as well as other segments of the population that could become high risk in the future.
5. Automate as much of population health management as you can while emphasizing human contact for high-risk patients
6. Embed care managers in practices wherever possible to create close relationships with patients.
7. Don’t try to manage population health with your EHR alone, but use applications built for population health to help accomplish your goals.
8. Integrate claims data with clinical data to provide breadth, timeliness, and adequate detail for analytic purposes.
9. Find ways to obtain timely information from hospitals and health plans about admissions, discharges, and procedures
10. Use predictive modeling to intervene with patients who are likely to get sick in the coming year.
11. Use registries to track patients’ health status and make sure they get the services they need.
12. Apply financial analytics to budgeting, using historical data on costs and, if possible, activity-based cost accounting.
For more information about this report, click here