Ten healthcare executives gathered in Chicago on October 25-26 for the inaugural Scottsdale Institute Population Health Summit. These leaders from a variety of organizations came together to discuss the current state of the healthcare industry, including challenges, lessons learned and what’s next. This whitepaper summarizes the challenges, insights and learnings discussed that organizations might consider as they transition from fee-for-service to value-based care.
Population Health Fall Summit Participants: Rob Bates, executive vice president, insurance services and population health, Avera Health; Don Calcagno, president, Advocate Physician Partners; David Classen, M.D., CMIO, Pascal Metrics, professor of medicine, University Of Utah and SI board member; Darby Dennis, R.N., vice president, clinical systems and informatics, information technology division, Houston Methodist; Luke Hansen, M.D., vice president and chief medical officer, population health, Amita Health; Cindy Kartman, clinical data analyst, population health, Amita Health; Waldo Mikels-Carrasco, Sr. director, regional population health research and policy, Michiana Health Information Network; David Mohr, M.D., vice president, clinical informatics, Sentara Healthcare; Carrie Nelson, M.D., chief clinical officer, Advocate Physician Partners; Lara Terry, M.D., medical director, population health and clinical analytics, Partners Healthcare
Organizer: Scottsdale Institute; Sponsor: Cerner Corporation
Moderator: Cerner Corporation—John Glaser, Ph.D., senior vice president, population health, Cerner Corporation
During the inaugural Scottsdale Institute Population Health Summit, executives from across a variety of organizations came together to discuss the current state of the healthcare industry, including challenges, lessons learned and what’s next. For many years, experts have projected a complete shift to full capitation. However, today, it’s clear that we will continue to live with at least a partial fee-for-service (FFS) world for a long time. As healthcare professionals straddle the chasm between traditional FFS models and value-based care, the key question becomes: how do you manage these various risk models at a given time? Disruption of payment and care models means organizations will be forced to live in two worlds—reactive and proactive—trying to adapt business operations without a standard, one-size-fits-all strategy. The variance between the percentage of patients tied to FFS, Medicare Advantage, shared savings, patient-centered medical homes, full-risk and others will continually ebb and flow, requiring adaptable people, processes and technologies.
The good news—organizations are up to the challenge. Healthcare professionals have always managed complex business models and operated on thin margins, but require management tools to do so. As the market evolves and organizations find the right mix for their local population, FFS, partial-and full-risk models will all be needed.
Balancing FFS and Population Health Management Payment Streams
Fee-for-service vs. Value-based care
Transformation driven by increasing healthcare deductibles and government policy changes has resulted in varying degrees of risk, from FFS to fully capitated value-based care. The degree of risk and composition of payment programs is unique to each local market and will continue to shift over time. Although this disruption is relatively slow, it’s important to adopt strategies to manage FFS and complex, varied levels of risk, while health systems continue to thrive with their existing revenue streams. “We speak of this as ‘managing the flip.’ It is difficult for clinicians to manage in both worlds. There is no incentive to rethink and re-engineer the way care is delivered until there is sufficient volume under value-based or at-risk models,” said Rob Bates, executive vice president, insurance services and population health, Avera Health.
The importance needs to be felt from the C-suite level down to the clinician level with aligned goals and incentives. “After all, 20 percent of a large number is still important —it’s substantial,” said Don Calcagno, president, Advocate Physician Partners. “Incentives are already in place to begin encouraging executives to better manage their risk; at the end of the day, leadership needs to be deeply engaged and knowledgeable about their risk populations to answer questions such as, ‘What percentage of business is capitated and what conditions are driving inappropriate utilization?’ Leaders in this market know how to manage healthcare operations. These are very skilled operators, managing a complex business, so we need to let them apply their management skills—they just need the right incentive and management tools to make it happen,” said Calcagno.
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