Health system execs see a value-based care tidal wave ahead

Healthcare leaders have been talking about the transition to value-based care for years, but without significant movement away from fee for service. That could all change in the next three years.

The current economic climate, with tightening margins and increased costs, is pushing health systems to finally make a move.

"We will continue to see margin pressure resulting from reimbursement rates not keeping pace with inflationary trends that are escalating staffing and supply chain costs," said Cliff Megerian, MD, CEO of University Hospitals in Cleveland. "As a result, you will see health systems optimizing their operations, which may include footprint re-evaluation, increasing focus on value-based care and greater utilization of digital technology, such as remote monitoring and telehealth services."

Dr. Megerian also sees more partnerships and expanded services as the growth mechanism for health systems instead of the traditional brick-and-mortar projects and acquisitions.

"Innovative thinking is critical for success, and quite frankly survival in our industry, so health systems should already be investing in growing in-house expertise dedicated to indeating new models of care," said Dr. Megerian. "But in three years, these efforts should be producing tangible results."

Hospital and health system CEOs see many of the same challenges plaguing 2023 continuing over the next year, including staffing shortages, workforce challenges and increased supply costs. Artificial intelligence will gain momentum to provide some relief in these areas, but won't be the entire fix.

"The next three years will be financially stressful for most organizations; as a response, they will seek additional ways to enhance value and lower total cost of care," said Greg Poulsen, senior vice president and chief policy officer of Salt Lake City-based Intermountain Health. "They will find that accepting additional accountability for total health and total cost of care will provide greater opportunity to be successful at both enhancing health and improving financial performance."

There is a true need for hospitals and health systems to redesign their connection with their communities and provide true population health services. Efforts to tackle social determinants of health and close the gap in health disparities will be the next measuring stick for health system success.

"Because of the growing prevalence of health inequities, there will likely be an increase in the uptake of innovative activities to address increased resource consumption," said Joseph Webb, CEO of Nashville (Tenn.) General Hospital. "[The] United States healthcare social entitlement programs, e.g., Medicare and Medicaid, are experiencing continuous escalation of costs driven by systemic health inequities. Expect to experience growth in value-based initiatives designed to improve health outcomes, population health management, and reduce costs among statistically indicated at-risk populations."

Hospitals are shifting patient care to encourage more efficient resource utilization and better quality care. That means serving patients virtually or in the outpatient setting when possible, and reserving inpatient beds for the sickest patients, and patients who truly need a higher level of care. Health plans are also focused on developing value-based contracts and directing patients to the low-cost site of service for care.

"Health systems will be more focused on value-based care three years from now," said Vi-Anne Antrum, senior vice president and chief nursing officer at Cone Health in Greensboro, N.C. "This will include transitioning more and more of the care delivery system into the ambulatory, community-based, mobile and virtual options. Health systems will partner with current payers and/or move into the payer space to reap the benefits derived from creating a higher level of value-based care."

Bill Munley, market administrator for the southeast division of Shriners Hospital for Children - Greenville (S.C.) also thinks value-based care will "dominate payer contracts." He also predicts the volume of Medicaid enrollees and uninsured as well as underinsured patient volumes will increase.

"To deal with this, health systems should form mutually beneficial alliances now more than ever," he said.

The non-traditional healthcare entrants have a natural focus on value as for-profit entities including Amazon and Walmart. These companies are still finding their footing in healthcare and there is a big opportunity for health systems to partner with them to stay on the cutting-edge of healthcare delivery, and provide a more seamless patient experience.

"These partnerships will create renewed need for the ability to share data and information safely and securely, so patients experience seamless and safe care delivery," said Karyn Baum, chief transformation officer of Essentia Health in Duluth, Minn. "I hope that continued focus on value-based care and population health will lead to these partnerships, and appropriate AI use, beginning to improve life expectancy again and allow us to make up some of the ground we lost over the past few years."

Copyright © 2024 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.


Featured Whitepapers

Featured Webinars