Health systems get serious about value-based care

Health system executive teams are in a bind as expenses rise faster than reimbursement rates, and margins are expected to stay slim for the next few years. With few options to mitigate costs and avoid cutting services, layoffs or worse, hospitals and health systems are accelerating value-based care strategies and taking a more nuanced approach to the site of service for care.

"At University Hospitals, we fully embrace the move to value in healthcare, providing the highest quality care at the lowest possible cost to the patient while at the same time optimizing efficiency for patients, providers and payers," said Paul Hinchey, MD, COO of Cleveland-based University Hospitals, told Becker's. "Crucial to this goal is creating an effective system of care that provides patients with a wide range of outpatient access options, effectively meeting them on their own terms."

Shifting clinical services to the outpatient setting is also effective for patients when complemented by tertiary and quaternary services as part of an integrated health system. Pete November, CEO of Ochsner Health in New Orleans, said outpatient care aids in the system's overall value-based care transformation.

"As we accelerate value-based care, outpatient care is an important part of how we partner with the people on their health to keep them well, rather than treating them after they're sick or injured," he said. Health systems are also changing physician contracts to increase emphasis on the value-based components, incentivizing outcomes over volume. There is a trend toward team-based compensation as well.

Value-based care is taking center stage at Renton, Wash.-based Providence as well. The health system has commercial, Medicare and employer accountable care organizations with 1.3 million lives in value-based care contracts using quality incentives and risk agreements. The health system has its own health plan with 1.4 million managed lines as well.

"Over the next decade, I believe that the number of value-based care agreements will dramatically increase as payers continue to look for ways to affect better patient outcomes, improve quality and provide affordable coverage and care," Don Antonucci, president and CEO of Providence Health Plan, told Becker's. "Along those same lines, as demand for better patient experiences increases, I believe we will see an industry shift toward more collaborative care models to ensure tighter integration of care and better data sharing."

Hospitals and health systems are now leveraging digital technology and artificial intelligence to support value-based care efforts. Mount Sinai Health System in New York City is using AI, predictive modeling and machine learning to reduce readmissions, a key component of improving quality and cutting costs.

"Integrating digital technology demonstrates a commitment to a higher standard of care," said LeWanza Harris, MD, vice president of quality and regulatory affairs at Mount Sinai. "It is a paradigm shift in the way we think about high value care. Leveraging cutting-edge digital technology will allow us to more accurately predict readmissions and help us to drive data-driven, tailored approaches to quality improvements across our care continuum and connect patients to the right resources within the community."

Cameual Wright, MD, president and market chief medical officer for CareSource Indiana, sees a similar movement among health plans. She anticipates payers will refine their plans as members evolve and technology advances.

"I expect a greater focus on quality and outcomes with an increased prevalence of value-based arrangements with providers in lieu of fee-for-service reimbursement," she told Becker's. "I also believe there will be innovation in automation that will streamline utilization management functions to reduce turnaround times and improve member experiences."

Many health systems have built stronger virtual care networks over the last few years to deliver more convenient and less costly care during the COVID-19 pandemic. Health systems can now take a step back and improve their virtual care delivery systems.

Megan Gillespie, vice president and chief nursing officer of Advocate Lutheran General Hospital in Park Ridge, Ill., said one of her hospital's top priorities is to "invest in building a comprehensive, seamless healthcare delivery system for patients and consumers that ensures wellness and elevates prevention across all platforms to advance value-based care."

Wexford (Pa.) Hospital, an integrated delivery system including a large payer and 14-hospital system, is implementing strategies to drive value in healthcare while "moving rapidly towards a full risk model," said the hospital's President Allan Klapper, MD.

"In balancing our focus on quality, safety, equity as well as patient and employee experience with reducing overall cost, integrating strategies have been implemented between the hospitals and the outpatient environment to improve alignment while reducing redundancies and waste," Dr. Klapper said. "As care moves further into the outpatient environment, it requires a continuous reassessment of the business and operating model to ensure the highest quality and safest care in a fiscally responsible way."

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