Many of these payment changes will require new infrastructures, new data and analytics capabilities, new approaches to funds flow, and new skills to support improved reporting, governance and accurate financial reporting, according to KPMG’s Healthcare & Life Sciences Institute.
In a webcast May 13, KPMG professionals Joe Kuehn, partner, and Mark Jamilkowski, managing director, discussed alternative payment arrangements and their implications for hospital finance.
Mr. Kuehn and Mr. Jamilkowski discussed a number of key items, including the following: trends in payment reform and alternative/value-based payment arrangements, impacts on financial and business processes and systems, and governance model and control impacts.
Here are five takeaways from the webinar presentation.
1. A change in care delivery financing and management will be required for health systems to be sustainable in the future. Patient care will need to shift from treating sick patients to managing population health. In terms of the finance function, that means organizations have an opportunity to reboot how healthcare is provided and paid for, according to KPMG. Also, finance will need to develop new skills, processes and reporting capabilities to manage effectively, the firm noted.
2. Finance will have to enable and monitor a larger variety of revenue streams. That’s due to the fact that fee-for-service payments are expected to phase out as quality-based incentives gain acceptance. In the future, Healthcare Effectiveness Data and Information Set-based benchmarks, along with other quality metrics, will form the basis for incentive compensation, according to KPMG.
3. The finance function is expected to have administrative and operational responsibility. That includes traditional insurance related functions of the health system, as well as making sure the clinically integrated entity (CIE) meets its periodic reporting requirements and time lines.
4. The vision of the finance function must extend beyond analytics. The vision must extend beyond analytics to “understand and administer the requirements of the CIE” and “guide the CIE through the complexities of payment reform,” according to KPMG.
5. Knowing who key financial team stakeholders are will help define reporting requirements. These stakeholders include human resources, health IT, existing provider boards and audit functions.
