We have heard many Healthcare CFOs voice their concern that CMS will pay them less for services rendered under government health plans due to the new value-based payment models. This knee-jerk reaction to Value-Based Care is not surprising, as the model is very similar to what was attempted in the 1990s around Integrated Delivery Systems/Networks (IDS/IDN) and PHO Managed Care contracts. Back then, the new managed care initiative was focused on lowering costs and improving care, neither of which was achieved. Instead, the cost of care has continued to increase dramatically.
Learn from the Past
Those who cannot learn from history are doomed to repeat it, so we should use those lessons learned to leverage Value-Based Care into an opportunity to create a better and more cost-effective environment for patient care, and consequently a better bottom line. There’s no reason that Value-Based Care can’t be a win-win for patients, providers, and payers.
Value-Based Care payment models and care improvement can create opportunities to lower costs through process efficiency, new remote technology capabilities, team care approaches and more streamlined medicine and operations. Healthcare and payer administration operational costs must also be addressed since those costs make up over half of the healthcare industry’s expenses. The challenge for all healthcare organizations is to develop strategic plans and models to lower cost, generate process improvements, and to achieve collaboration for better care.
Data is Critical
The healthcare industry must focus on developing patient-centered data and care models that are designed to lower costs, improve access to care, and use population management based analytics to achieve positive tangible patient outcomes and more predictable protocols for chronic and complex care. It is only through industry collaboration and mutual agreement that the objectives of the Value-Based Care model can be achieved.
Value-Based Care is an opportunity to finally get the delivery, provisioning, and costs of care under control at all levels. Rather than panicking about falling revenues, we should focus on taking advantage of this opportunity because if done correctly, Value-Based Care will create healthier patients and better margins.
Have you estimated the financial impact Value-Based Care will have on your organization?
If you’d like help transitioning to Value-Based Care, read about HCIM’s Strategic Consulting services.
President & CEO
Dr. Bill Bysinger
Sr. Strategic Adviser