ABC’s of Healthcare 2014: Accountability, Bundled Payments and Consolidation

Wednesday, November 6th, 2013
This post was written by Patricia Donovan

Webinar Replay: 2014 Healthcare Trends & Forecasts, A Strategic Planning Session

“Use performance metrics and hold people accountable to the metrics. The days of all the excuses have really come to an end.”

Rationalizations for the poorly performing ObamaCare Web site aside, Steven Valentine’s advice during HIN’s tenth annual Healthcare Trends & Forecasts program underscores the accountability factor in value-based healthcare.

There really aren’t any more excuses for poor clinical outcomes or wasteful spending — not with the proliferation of evidence-based, patient-centered care models and tools to track population health.

Accountability is part of the Triple Aim mentality that pervades the industry and colored predictions by both Valentine, president of The Camden Group, and Catherine Sreckovich, managing director in the healthcare practice at Navigant, during HIN’s tenth annual Healthcare Trends & Forecasts in 2014 Strategic Planning Session. Prognostications by these industry thought leaders on the care delivery and reimbursement strategies to watch in the year ahead bolster the notion that big data, risk-stratified accountable care and performance-based reimbursement are here to stay.

Although healthcare will continue to live in a fee-for-service world for a while longer, acquisition and consolidation by physicians and hospitals will continue, and integrated delivery networks powered by bundled payments are healthcare’s best bet for value and integration, Valentine said. It’s one reason he’s “bullish on medical homes: they can be effective and have in many cases been able to reduce hospital admissions by 5 to 7 percent.”

Accountability also extends to new models of care delivery — the medical neighborhood, an amped-up version of the patient-centered medical home that pulls specialists, care coordinators and community linkages into the care continuum, or the “Team Approach, One Member at a Time” population health management philosophy of Kaiser Permanente, which Valentine hailed as “the poster child for the Obama administration as to what an ACO might look like.”

Dual eligibles, whose care is often fragmented, present an opportunity to benefit for monies available for Medicare-Medicaid beneficiaries. However, Valentine urges caution in the duals arena. “Dual-eligibles are extremely difficult to manage, they are non-compliant patients. Unless you manage care really well, being in a dual-eligible managed care system will probably cost you money.”

The accountable care organization continues to hold promise, he said, but despite the proliferation of ACOs, not all have delivered as expected. He advises ACOs to shore up infrastructure and focus more on medical management.

Ms. Sreckovich, parsing the healthcare year ahead for payors, concurs with Valentine on the potential of the ACO, but also cautioned that as with other shared savings models (bundled payments and patient-centered medical homes, for example) there are hurdles to ACO implementation that remain, including their high setup cost. “Organizations have to have the right resources, staff, time, money, etc., to meet their accountability targets,” she said.

On recommended reimbursement models for ACOs, Ms. Sreckovich was partial to bundled payments, shared risk, and incentives tied to value and wellness outcomes. “Those are the payment models that health plans are starting to emphasize as they’re negotiating terms of new arrangements.”

in her payor-focused comments, Ms. Sreckovich pointed out the extreme variation in the number and types of available health plans at this time — a scenario complicated by the problematic rollout of the health insurance exchanges. It remains to be seen what impact the government’s technical difficulties will have on the industry, but as of right now, Ms. Sreckovich doesn’t expect the low tax penalties for the uninsured to be enough of a motivator for enrollment.

The recent ACA-related troubles may result in the creation of more private insurance exchanges such as the one Walgreen’s created earlier this year. The discount retailer is moving 120,000 employees to a private health insurance exchange from coverage provided directly from carriers.

For her part, Ms. Sreckovich is bullish on big data, but advised health plans “not to use data for data’s sake but instead use analytics to transform from ‘payor’ to ‘value generator.'” It is also critical to get more data into consumers’ hands, she stressed.

“So far, data for consumers has been relatively limited, which is a problem because we want consumers to make decisions based on cost and quality. So we really have to get the data to them.”

Listen to interviews with Mr. Valentine and Ms. Sreckovich.


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