Posts Tagged ‘bundled payment’

4 Factors Driving Resurgence in the Physician-Hospital Organization Model Today

October 10th, 2014 by Cheryl Miller

As healthcare organizations seek the infrastructure to respond to emerging payment models like accountable care organizations (ACOs), bundled payments, narrow networks and direct contracts, the physician-hospital organization (PHO) model is experiencing a resurgence nationwide.

But will it work this time? Four factors make the PHO attractive, says Travis Ansel, senior manager with the Healthcare Strategy Group, during Preparing for Value-Based Reimbursement Models: PHO Development for ACOs, Bundled Payments and Direct Contracting, a 45-minute webinar from the Healthcare Intelligence Network (HIN) now available for replay.

The first most immediate driver is independent physician alignment, says Mr. Ansel. While most markets are mature in terms of employment, there are still a number of markets where there are a significant number of independent physicians in key specialties. In these areas, the PHO model is more of an initial catchall type of alignment model, one that creates a loose tie between the hospital and the physicians in the market, and provides value to the physicians in terms of being protected as part of a larger group without having to become employed. One benefit for the hospitals is that they can align independent physicians en masse and create common incentives, instead of having to negotiate alignment models or arrangements with all independent physicians in their market.

The second driver is the increasing mutual accountability for quality and cost across providers. In the wake of transitioning payment models under payment and insurance reform, insurers and payors are trying to drive mutual accountability for patient costs to physicians and hospitals. The PHO is an appropriate response for those providers to work together to manage the cost of a population and of an episode of care in order to make sure everybody’s successful.

The third factor driving resurgence in PHO activity is the consolidation and distribution of resources that will allow providers to be successful in managing quality and cost. As healthcare reform and payment reform mature, information technology (IT) competencies, clinical competencies, care coordination practices, and exploring the patient-centered medical home (PCMH) concept are often unrealistic at the individual practice level. The PHO gives physicians and hospitals the platform to work on those care competencies together, build them in one place and then distribute them to PHO members — a “win-win for everybody,” Mr. Ansel says.

The final driver is the need for an effective framework for clinical integration. While there are already a number of clinically integrated organizations around the country, “For the bottom 90 percent of healthcare organizations in the country, clinical integration is still that thing that’s on our to-do list, but it always gets bumped to the back of the to-do list; because, we have more immediate needs, or more immediate strategic priorities,” Mr. Ansel says. Clinically integrated models are needed as a strategy to respond to payment reform, to allow joint contracts between physicians and hospitals, and to enable sharing of payments effectively, whether those are shared savings payments, bundled payments, etc. Adds Mr. Ansel:

“The PHO model provides a great initial step to building that clinically integrated network platform, and gives providers and the hospital a great model for working together to start building the competencies towards a clinically integrated network.”

Click here for an interview with Mr. Ansel.

3 2014 Trends for Health Plans

January 21st, 2014 by Jessica Fornarotto

Influencing primary care, aggregating and mining data, and embracing bundled or episode-based payments are three trends that will influence health plans in 2014, predicts Catherine Sreckovich, managing director in the healthcare practice at Navigant Consulting.

HIN interviewed Sreckovich on these trends prior to her presentation during HIN’s tenth annual webinar on Healthcare Trends & Forecasts in 2014: A Strategic Planning Session.

HIN: Where will data analytics take health plans in the coming year, and how will this shape population health management offerings?

(Catherine Sreckovich): We’re certainly hearing a lot about big data, and it will be an integral approach to merging this practice’s or population’s health, the ability to aggregate and mine data is going to be an essential capability for health plans for their predictive models. And the outputs of these models are going to enable the health plans to identify and stratify their members or population health. Member and patient demographics can also inform consumer engagement strategies to support population health. And the analytics are going to inform the effectiveness of different care management interventions and consumer engagement strategies.

HIN: Health plan case managers embedded alongside providers has become almost a de facto model. How will payors influence primary care delivery in the year to come?

(Catherine Sreckovich): There is a number of approaches evolving right now and that will continue to evolve as payors attempt to influence primary care delivery. One is the use of patient-centered medical homes (PCMHs) and other integrated models to expand the payor’s role as the primary care case manager.

In addition to paying primary care providers to hire case managers and care coordinators, payors are pushing for shared savings arrangements with these primary care providers, such as within an accountable care organization (ACO), and to push them to manage the care for those with chronic conditions.

We’re also seeing payors paying for primary care physicians to become certified PCMHs and to implement electronic health records (EHRs), either by paying directly for the certification of the technology or by adding bonus payments to their FFS rates.

Payors are also paying for incentives for primary care physicians to offer wellness programs such as smoking cessation or weight loss programs and are trying very hard to influence where and to whom primary care physicians refer their patients by giving them information about the cost and quality of other provider types, such as specialists and hospitals.

And we will continue to see that payors will target the larger primary care physician practices with whom they have a critical mass of members to achieve enough savings to offset the added costs of incentives, bonuses and shared savings arrangements. As a result, we expect that some of the smaller primary care practices will likely not receive the same level of support and push from payors.

In another example, we see payors increasingly partnering with non-traditional providers, such as retail-based clinics and community health centers to offer easily accessible primary care at lower costs. And this will certainly be an opportunity to address some of the physician supply shortages that we anticipate seeing in the next year or so as more and more people have access to healthcare insurance and coverage.

Finally, another approach payors are using is to offer members access to virtual doctor visits via webcam, for example, and other telemedicine approaches that are giving individuals access to these primary care providers to increase access to convenient and low cost primary care for their patients.

HIN: CMS and top-performing Pioneer ACOs are heavily invested in bundled or episode-based payments. Will more private payors embrace this reimbursement method as well?

(Catherine Sreckovich): Definitely. The bundled or episodic-based payment approaches are here to stay. We’re starting to see this take off in a number of states. For example, there are state innovation grants that CMS has provided to states like Arkansas, Ohio, Delaware and others looking for opportunities to implement multi-payor bundled payment initiatives. Although these are not necessarily the traditional ACO model, they built off of that ACO model.

We also see that the large health plans in various states are starting to build and develop ACOs. Key to these are the shared savings arrangements that they’re implementing with these payment approaches. So whether they’re bundled or episodic-based payments or whether they look more like a traditional ACO, if there is such a thing, we’re starting to see takeoffs on those kinds of models as payors and health plans become more creative in the development of their alternatives.

Excerpted from: Healthcare Trends & Forecasts in 2014: Performance Expectations for the Healthcare Industry