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From Volume to Value: 10 Essential Strategies for Navigating the Healthcare Shift

June 8, 2021
Duncan Gallagher

President of Donegal Advisory Services

Article Summary


As the transition of healthcare payment models from volume to value takes longer than expected, healthcare organizations must balance fee for service (FFS) with value-based care (VBC). The transition to VBC will accelerate, but as FFS persists and still generates adequate margins, organizations must also continue to be successful under volume-based reimbursement.

Ten tools can help health systems balance VBC with FFS:

1. A member perspective.
2. Cautious investment in hard delivery assets.
3. Accelerated investment in digital infrastructure.
4. Innovative digital engagement solutions.
5. Pricing concessions.
6. Aligned incentives.

Value-based care

As a country, we are confronting many options and philosophies regarding accessible and affordable health insurance—all of factor into healthcare’s shift to value-based care (VBC). Our choices include supporting state and national insurance exchanges, eliminating the individual mandate, repealing the Affordable Care Act, advancing Medicaid block grants, creating Medicare for All, modifying the Medicare program to enroll all who want it, and more.

当我们的社区讨论这些替代方案的优点,以及推广这些方案的领导人时,作为一个国家,我们最终必须面对一个在主流社会中不经常广泛讨论的问题:所有保险方案背后的重大挑战是越来越难以负担的医疗服务提供系统。

在这些挑战中,医疗保健行业处于基于价值和基于数量的支付模式之间的两难境地,因为负担不起推动了向价值的转变,但目前的环境仍然支持数量。为了在经济上生存下去,卫生系统必须了解驱动和维持这两种支付模式的因素,以及在价值取代数量的情况下平衡价值成功的战略。

A Consistent Rise in the Cost of Care Delivery

The consistent rise in cost of care delivery is well documented. For many years, the annual cost of healthcare services has increased at a rate greater than that of generalinflationand of the U.S. economy. As a result, healthcare expenditures as a percent of GDP now approach18 percent—more than doubling from 8 percent of the 1980s when health insurance was far less of an issue.

Many factors contribute to the consistent rise in cost, but a few elements are critical drivers:

  • Demographic trends (e.g., aging, obesity, the resultant diabetic epidemic, prevalence of chronic conditions, etc.).
  • End of life—the understandable emotional realities and many healthcare services that neither materially extend life nor sustain its quality but sooth emotions.
  • Care variation and a stubborn presence of non-standard, suboptimal care.
  • The prolific introduction of new unproven technologies (e.g., pharmacological, diagnostic, or surgical solutions, tools, and devices) without substantive, independent, empirical evidence demonstrating better or equal outcomes accompanied by equal or lower cost.
  • 医疗保健服务设置和医疗保健团队(如医院急诊或影像部门)经常无法与疾病严重程度和事故敏度相匹配,以确保始终可靠地提供最有效和高效的护理。
  • A care system whose component parts do not reliably and efficiently share information.
  • Perhaps most importantly, a care system that does not effectively engage the individual in maintaining or improving their health status.

With the social factors and healthcare services environment described above persisting for decades, healthcare service capitalism has thrived under service payment systems incenting more care—known as fee for service (FFS). But as a designed byproduct, the FFS model drives more service, more fees, higher costs, and more GDP consumption.

Stemming the Rising Tide of Cost: Alternative Payment Models and Value-Based Care

为了遏制这一成本上涨趋势,医疗服务的最大购买者联邦和州政府多年来一直以低于其他购买者的费率限制FFS付款的增长。其他大型买家(例如,大型雇主和商业保险公司)对政府支付的费用与他们以及其他所有人支付的费用之间的定价差距越来越感到沮丧。这些其他买家反过来要求更低的利率。

然而,尽管有这些支付压力,医疗成本仍在继续上升,这意味着更多的医疗服务以被抑制的速度提供。无论如何,尽管医疗保健总成本持续上升,但医疗保健组织近年来经历了显著的利润压力。在可预见的未来,由于费用增长继续落后于费用通胀,FFS下的供应商利润率压力可能会继续加大。替代支付机制将逐渐对供应商更具吸引力。

Alternate payment mechanisms including VBC payment models have been introduced. They are not new—CMS began emphasizing VBC in about2008. The VBC adoption rate, however, has been slow. Provider success rates have been slower. But to effectively address the total cost challenge, a mechanism that deemphasizes care volume through alternative, outcomes-based models seems imperative. Furthermore, providing an alternative path for viable provider margins seems not only likely but critically necessary. Providers have the training, skills, and experience to effectively address most of the critical cost drivers outlined above. They should be rewarded for doing so.

The Shift from Fee for Service to Value-Based Care: Slow but Inevitable

CMS has been a strong advocate for VBC—importantly, through both Republican and Democrat administrations. Since the latter 20th世纪以来,CMS支付方式的变化推动了医疗服务行业支付方式的变化。如成本报销、预期支付、收费表、基于资源的相对价值体系等,都是后来行业采用的CMS的原创设计。

虽然越来越难以想象VBC支付不会成为更普遍的供应商补偿方式,但采用仍然缓慢。FFS机制不会很快消失,对今天的供应商取得财务成功仍具有重要意义。世界最大经济体的五分之一是基于FFS模型建造的。这种比例的改变需要时间。新的关键能力和能力的识别、创建和采用肯定会时断时续。期望它。但是在VBC系统下的成功是可以实现的。VBC的使用率也将随之提高。\

Ten Strategies for Balancing Value with Volume

As healthcare makes its shift towards VBC, organizations must carefully navigate a balance of FFS and VBC payment. Ten strategies will be critical to that balance:

  1. A member perspective: Increasingly measure market share in new members, not patients. As health systems are more and more paid for managing populations, it becomes less productive to count patients. Recruiting and retaining members into care systems and products will be important as well as the cultural shift towardspopulation healthit implies.
  2. Cautious investment in hard delivery assets: Carefully examine investment that builds delivery capacity in general. Think telemedicine and digital engagement versus patient facilities and exam rooms.
  3. Accelerated investment in digital infrastructure: Invest in a cloud-based analytics platform (e.g., the Health Catalyst®Data Operating System [DOS™]) that can provide and/or support the following:
    • Real time or near-real time data on member and provider activity.
    • 数据驱动的设计。
    • 预测模型-干预,引导成员从急性护理事件转向更有效和及时的预防性初级护理。
    • Disciplined unit cost management—model and benchmark operational efficiency in all care and support settings.
    • Quality measurement tools and outcomes reporting.
  4. Innovative digital engagement solutions:利用技术和整合护理团队重新设计,以加强成员关系、参与和健康系统品牌。
  5. Pricing concessions: Establish competitive pricing to position health system services with engaged, savvy consumers expecting and demanding transparency and a total value proposition.
  6. Aligned incentives: Align physician, management, and team member compensation incentives to reward value and advance the drivers of success under VBC.
  7. Network management:建立有效、高效的护理系统网络,使会员护理持续在网络中。一个真正能提供最优价值的护理系统,将在流程和信息上得到很好的整合。成员将从护理网络的护理中获得临床和经济上的好处。
  8. Payer-provider trust and collaboration:构建支付方-提供者协作。由此产生的信任将使各方受益,对提高VBC的采用率至关重要。公平、透明和公平的支付人合同是基本必要的。提供者必须按照价值指标来执行,如果不这样做,就会承受经济上的痛苦。支付方伙伴必须及时分享信息,并承认自愿保险对健康计划的经济效益超出了特定合同的成员。
  9. Clinician and administrative alignment: Develop agovernancestructure to bring clinicians (employed and independent) and administrative leadership together to design strategy and build VBC management infrastructure. Both leadership and clinicians work together to design incentive pools to create the right risk/reward for their networks. Vigorously monitor performance against benchmarks by reporting on opportunities, outcomes, and results, with a dedication to driving transformation by rewarding great performers and incentivizing those who can do better.
  10. Physician leadership and accountability:确定和发展医师领袖。通过报告机会、结果和结果,以推动转型的决心和决心,积极监测系统和医生个人绩效的基准。奖励优秀的员工和领导者,激励那些能做得更好的人。

Strategy, Partnerships, and Data Build Stability Amid Economic Uncertainty and the Shift to Value-Based Care

医疗支付模式将不可避免地继续向价值进军。Persistent affordability challenges and populationtrends将确保一个不断发展和日益具有挑战性的景观。在资本主义经济中,规则为每个人而改变,创造了一个市场机会。在新规则下最迅速地开发出成功能力的组织将比那些没有这样做的组织拥有竞争优势。

While health systems can’t prudently commit wholesale to VBC, those who cling too long to FFS place at risk their long-term viability. As a result, organizations must build strategies to increase their clinical, operational, and financial agility and promote sustained investment in competencies critical under VBC while continuing to balance value and volume.

Additional Reading

Would you like to learn more about this topic? Here are some articles we suggest:

  1. The Medicare Shared Savings Program: Four Tools for Better Profit Margins and High-Quality Care
  2. Resetting Payer-Provider Arrangements for COVID-19 and the Evolving Improvement Journey
  3. Six Steps Towards Meaningful, Ongoing Healthcare Performance Improvement
  4. Value-Based Purchasing 2020: A 10-Year Progress Report
  5. Expanding AI in Healthcare: Introducing the New Healthcare.AI™ by Health Catalyst

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