Health systems redesign value-based care

Big Tech and retail giants continue to expand into healthcare, investing more money in value-based care and putting more pressure on hospitals and health systems to bend the cost curve and prioritize digital health investments capable of providing value. 

With more competitors entering the sector —- and patients increasingly shopping for the best value for their care —- hospitals and health systems are upping the ante when it comes to the shift away from fee for service. 

Health systems, many of which are beginning to see margins increase after a tumultuous three years, also see success in value-based care models as the key to ensuring long-term financial sustainability.

"At the top of our list is provider transformation," James Rohrbaugh, CFO of Pittsburgh-based Allegheny Health Network, told Becker's. "We believe that we can transform ourselves to be financially sustainable in the long run through value-based care. An important element of that to us is the provider and payer partnership."

Allegheny Health Network is in a unique situation in that its parent company is Highmark Health, which operates Highmark Health Plans. Highmark Health acquired Allegheny Health Network for $1 billion in 2013. 

"When we think about the challenges we're facing and the opportunities, the biggest one is the fact that we can figure out ways to align opportunities for providers and payers to work together better, to benefit the payer's members and our patients," Mr. Rohrbaugh said. "I think at the top of the list is to be able to leverage that, because that, from my perspective, that's a really unique opportunity for us in terms of how we make sure that we're financially stable."

Scottsdale, Ariz.-based HonorHealth, a six-hospital system, is also accelerating its push into value-based care and sees partnerships as the key to strengthening its presence there. 

"HonorHealth believes in leveraging partnerships, in a variety of forms, that will enhance its ability to meet a fast-growing community need and in as comprehensive a set of services and programs as makes it an effective network for value-based risk contracting," CFO Lisa Montman said. "We have joint ventures that have allowed us to expand into a wider catchment area, with specialized services that tap into unique partner expertise, with more physician alignment in ambulatory care settings and more physician engagement in managing value-based risk."

One partnership that grabbed headlines last month was Altamonte Springs, Fla.-based AdventHealth joining forces with Wellvana Health — a value-based care startup — to redesign its primary care strategy. The objective is to improve outcomes, reduce the cost of care and expand access by empowering primary care physicians to focus on high-quality preventive care.

The primary care redesign aims to offer a more balanced approach to health, driven not just by sick care, but also wellness and prevention, according to Bryan Stiltz, CEO of AdventHealth's primary care network. 

"That starts with integrated, accessible and affordable primary care," Mr. Stiltz said. "Guiding our high-performing network through the transition to full risk requires a dependable and innovative partner. Wellvana has the skilled team, actionable technology and customized delivery model to help us provide whole-person care to more people."

Wellvana said its participation in CMS' ACO REACH, Medicare Shared Savings Program and Medicare Advantage initiatives offer "a custom path to risk" for physicians in its network, prioritizing health equity and increasing access for underserved populations.

Accountable care organizations are also a critical component of CMS' value-based care goals. CMS CFO Megan Worstell told Becker's that ACOs are essential to achieving the agency's goal of "having all beneficiaries in the traditional Medicare program cared for by providers who are accountable for costs and quality of care by 2030."

Commercial payers also expect value-based care to take off in the next decade, but increasing standardization and price transparency will make it more challenging for insurers to differentiate themselves based on cost. 

"Instead, payers, including health plans, will be judged on their ability to work with providers to reduce health disparities and effectively manage chronic conditions through value-based arrangements," Howard Weiss, vice president of public policy and government engagement of EmblemHealth, told Becker's. "Payers that are most aligned with provider groups that are willing to take financial risk based on their performance will be better situated to succeed in this environment."

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