Providers are going through rapid change in how their business is conducted, delivered and paid for. When you combine this change with industry consolidation and payer shifts, the uncertainty can be paralyzing. A few insights to help untangle the knot.
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Navigating Payment Reform Amid Industry Consolidation
We hear a lot about how one health system can transition to value-based care. But as rapid consolidation continues, how do two or more systems approach a merger when they're at different stages in their value-based journey?
RN: There is no one-size-fits-all solution for this scenario. The key is to have a clear line of sight into the competitive strengths and weaknesses of the new unified system's portfolio of services. This is more strategic than simply “catching up” the system that's behind. This is especially critical from a market perspective.
In some markets, you may want to pivot strategically to pursue risk-based reimbursement contracts, and in other markets you may need to remain focused on competing well in a traditional setting. The important thing is to consider these strategies from a unified perspective, and make measured, data-driven decisions.
Providers have a good sense of CMS' direction toward valuebased payment models. What can they expect from otherpayers?
RN: We've consulted on many CMS programs—those that have worked well, and those that have not. The successful CMS programs are likely the ones commercial payers will adopt. Another option for providers is to tackle commercial payer uncertainty head-on. A provider with sizable influence in their market, and a solid grasp on their current contracts, can start to initiate those discussions with payers rather than waiting for them to take the lead.
The ACA insurance coverage rules have been law for two years. Is there more certainty around payer mix as a result?
RN: Not exactly. We've unraveled some of the mystery around the exchanges. In 2014, nobody knew who was going to enter the exchanges and what that risk pool was going to look like. Now we have a much better idea. However, they're still trying to hit the right premium price to offer on the exchanges and we're seeing a shifting membership. To simplify, the front end of the ACA allowed greater access to insurance coverage through the exchanges and Medicaid expansion.
More recently, there has been more focus on payment reform. There are still too many new insights coming through the public payers, and the dust has nowhere near settled in terms of understanding the efficacy of these programs. It was intentional, through the ACA's design, to experiment with payment reforms and vet different strategies before adopting industry wide.
What insights does Truven Health have to share with providers?
RN: We own a significant source of healthcare data which we use to help our clients make informed decisions. For example, how are my fee-for-service contracts relative to competitors in my market? How is my hospital positioned to take on risk-based contracts? Do I have a nuanced strategy to successfully straddle a fee-for-service and value-based reimbursement environment? We provide our clients with data driven insights into their current market position in terms of reimbursement and utilization, as well as projecting those components in the future.
For more than 40 years, we've been committed to delivering leading performance improvement solutions built on data integrity, advanced analytics, and domain expertise to help our clients improve healthcare quality and access while reducing costs. For more information, please visit truvenhealth.com
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