With the current shift to value-based reimbursement, providers are facing noteworthy changes as healthcare consumers are under more financial pressure than ever before.
Enrollment in health savings account/high-deductible health plans is at an all-time high. The 2014 census by American's Health Insurance Plans shows that the number of health savings accounts and high-deductible plans has increased by 15 percent over the past few years, from 11.4 million in January 2011 to 17.4 million in January 2014.
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Out-of-pocket costs are also on the rise, causing more individuals to shop for healthcare as they would for other services. Rather than simply choosing the closest doctor, today's consumers want the best value.
A recent survey found that 83.7 percent of healthcare consumers say cost influences their decision on where to go for care. With an array of plan options available through healthcare exchanges, these individuals now have the flexibility to make more informed choices than they did in the past.
These changing dynamics are influencing how providers consider ways to attract and retain patients. Meeting consumer demand for convenience and affordability, during a time of increased transparency, requires new approaches.
The growing urgency to respond to these shifting patient demands has led to an increase in accountable care organizations nationwide.
According to the latest count from Leavitt Partners, nearly 750 ACOs exist today, and 23.5 million lives are covered by these ACOs.
While the Medicare Shared Savings Program and Pioneer ACO Model cover about 7.8 million of these individuals, the majority receive care from commercial ACOs.
In addition, the 2014 National Scorecard on Payment Reform estimates that 40 percent of all commercial in-network payments are now value-oriented – either tied to performance or designed to reduce inefficiencies.
What's driving the move to value-based payment models?
The trend toward value-based payments will only accelerate as consumers insist on greater transparency in the cost and quality of their care as well as a better patient experience.
These demands are driven by a number of market forces, including:
The decline in employer-paid health benefits and the rise of health insurance exchanges. More people are now covered by HDHPs, which puts more financial responsibility on patients.
The rise of health insurance exchanges. Individuals are now required to have health coverage or pay financial penalties. These consumers are very focused on value and cost.
Higher levels of transparency. With greater access to financial and clinical information via online and mobile channels, patients can easily compare providers, read reviews and take a more active role in managing their care.
These trends, along with public and private efforts to better link reimbursement to the overall health and well-being of patients, are positioning value-based care models for continued growth.
Aetna is a part of The Health Care Transformation Task Force, a coalition of private payers, providers and employers, which earlier this year pledged to put 75 percent of its payments into value-based models by January 2020.
Likewise, the Department of Health and Human Services committed to put 30 percent of payments in value-based models by 2016 and 50 percent by 2018.
Which value-based model will help you keep pace with change?
Value-based models offer providers a way to stay ahead of the curve while delivering better quality care and a better patient experience at a lower cost. There are many options for these models along the spectrum of risk, ranging from pay-for-performance to ACOs to joint ventures.
Picking the right value-based contract depends on a provider's readiness for value-based care and its specific goals. Key factors to consider when making this decision include:
The size of the organization. For small and medium sized practices, pay-for-performance or patient centered medical home models may be the best fit. These options allow practices to implement new models without more complicated arrangements with outside care providers.
Larger organizations, such as hospitals, health systems and integrated delivery networks, often find ACOs and high performance networks to be the right match because these models require more complicated integration between hospitals and physician practices.
During the selection process, look at the types of organizations that have had the most success with the models you are considering.
The organization's willingness to take on risk. As the amount of risk escalates, so does the need for care management, disease management and utilization management capabilities. Evaluate how quickly your organization can scale to meet the demands of value-based care.
The organization's willingness to invest in technology. Population health requires specific IT to help effectively identify and manage high-risk patients. The size of investment required will depend on what already exists in terms of informatics, care management and patient engagement, and what is needed for population health.
Before moving forward, carefully evaluate how much your organization can financially commit to these efforts.
As providers move toward alternative payment models, they will consider the infrastructure they have in place and make investments to support value-based payments over time. While these investments are a serious undertaking, many providers are able to make this shift more efficiently by collaborating with a payer.
Providers can leverage a payer's capabilities and expertise in managing risk and population health, relatively new territory for many hospitals, health systems and practices.
As providers advance their transition to value-based care, they can gradually assume more risk in the collaboration, maturing to a new model type when ready. This allows providers to maximize the financial rewards of delivering high-quality care.
What can you expect moving forward?
The market is evolving, and payment models are changing. With the growth of high-deductible health plans, health insurance exchanges and new technologies that support increased transparency, there is greater need for options that focus on value.
By taking action now and finding the right path, providers can stay one step ahead of these trends. They can also meet patient demands for access and affordability while improving outcomes.
By applying the experience and expertise of an organization that has implemented a number of different value-based models across a variety of settings, providers can reap a wealth of benefits. Payer-provider collaborations have proven to support the delivery of more efficient, patient-centered care – which is key in today's evolving healthcare environment.
Daniel Finke is CEO of Accountable Care Solutions from Aetna.