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For children's hospitals, the move to value-based care is a choice -- and some are opting in

While value-based care isn't a mandate for pediatrics, there are still incentives to make the switch and provide the best care for patients.

Jeff Lagasse, Associate Editor

Adult hospitals are in the midst of an industry-wide seismic shift: the transition to value-based care models, which reward hospitals financially for clinically strong performance. The days when providers made their money by hustling a stream of patients out the door are coming to a close, and healthcare organizations have no choice but to roll with the coming tide.

Children's hospitals are a different beast altogether. For them, moving to value-based care isn't mandatory. A large part of that has to do with their inherently lower volume; a lot of value-based contracts are Medicare-driven, after all.

Part of it also is due to the fact that, with all of the chronic conditions that permeate the adult world, managing the cost of care is more expensive for the adult population. Not only is pediatrics a smaller field, but there's less in the way of chronic care for ailments such as diabetes, which are common in adult medicine.

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Generally, pediatrics still operates under the old fee-for-service structure, with some exceptions, such as where states have delegated some of their Medicare arrangements.

Yet some children's hospitals are making the switch anyway. Financials are a consideration in some of these cases, but for the most part the value-based pioneers in the pediatric world cite the needs of their patients in forging ahead, insisting that the clinical quality gained is worth the price of admission.

Deborah Rumsey, executive director of Children's Health Alliance, said one of the big drivers of value-based contracts is the federal government. Comprehensive Primary Care Plus programs , for example, are rooted in a national advanced primary care medical home model that aims to strengthen primary care through regionally-based, multi-payer payment reform and care delivery transformation.

"Pediatrics was left out of that because they do not have a Medicare base," said Rumsey.

So for children's hospitals, the question remains: Why make the switch?


According to Lisa Henderson, executive director of Dayton Children's Hospital, the impetus for switching to value varies from market to market. Some payers are offering pediatric programs some financial incentives.

"Some of these arrangements fit on top of fee-for-service, but it gives organizations some financial incentive without taking on the full risk of the patient population," said Henderson. "In a lot of cases it's the best thing to be doing for kids -- developing programs that span the care continuum, and focusing on prevention. There are a lot of organizations saying, 'The dollars will come, but this is what's best for the kids.'"

Niki Buchanan, business leader for Philips Wellcentive, said that there are some payer issues that can arise.

"The payer issue is that, similar to the adult world, clinicians and health systems can join into advanced payment models like value-based care contracts, so we see ACOs pop up all over the country," she said. "But pediatric organizations are hesitant to join, and if you don't join you can't utilize these value-based things."

When it comes to prevention -- one of pediatrics' holy grails -- the mindset is that they're doing something from a clinical perspective that costs a little more in the short-term, like preventing obesity, that can have a larger impact and cost down the road.

Buchanan pointed to one hospital in the northwest that's actively contributing to long-term advanced payment models, and another in Ohio that's working with payers in their market to be considered for value-based care programs. The latter already has programs in place to reduce emergency department visits, and have put best practices in place to protect children who have gastrointestinal and constipation issues. Basically, they're treating their patients the same way the National Quality Strategy measures its populations.

"If we're leaving out 20 to 30 percent of the population, children and adolescents, then all the health in adulthood doesn't have a benefit if we wait until they hit 21 years old."

For Rumsey and CHA, which is focused on supporting and promoting the medical home -- of which pediatrics has always been a core component -- the emphasis is very much on preventative care that ensures negative health events in youth don't blossom into more chronic conditions.

"We've been better than the adult population when it comes to the coordination of services," said Rumsey. "It really started with the pediatric practices. They were doing a lot of aspects of the medical home before the adults caught on. Looking at preventative care and quality measures … was a very natural fit for out practices in particular."

CHA Senior Director of Public Health Julie Harris said preventative care hasn't been a huge shift for pediatrics -- it's long been the focus -- but it's been a shift for payers when it comes to incentives for preventative care, because it's more of an investment rather than a cost-saving ROI. For that reason, it's been slower on the contracts side of things.

"We're better able to demonstrate across populations the extent and scope of care being delivered, because pediatrics is so focused on prevention, and immunizations are so important," said Harris. "We can do proactive outreach so we catch kids up in time. That's enabled for the Children's Health Alliance pediatricians to achieve a 20-percent higher immunization rate than the other comparable populations. We're demonstrating to payers that there is value."


Many pediatric hospitals don't employ the pediatricians in their market -- a trend that comes and goes. Dayton Children's does, and in its case it was about getting the pediatricians and the acute care hospital around the table and asking themselves what they're going to do, what the goals are going to be, and ultimately how they'll fund the volume-to-value journey.

"In a lot of cases, the pediatric hospital is coming to the table with some of the dollars to get some of these programs off the ground," said Henderson. "Depending on the arrangement, there are rules on who can fund what in what situations. In our case, Dayton Children's said, This is really important, we want to tackle this model, and we understand the payer arrangements will likely come later."

There's a mixed opinion as to whether provider organizations reap an immediate financial benefit from the switch to value.

"If there's not an incentive to see a child six times between 0 and 15 months, and the insurance provider doesn't necessarily reimburse all of these visits, that can be a burden on the practice, so obviously they want to be on programs with Medicaid that cover that," said Buchanan. "If not, those visits become costly over time, especially if the child is sickly. It's not the standard today."

The reason teens in particular benefit from population health tools, Buchanan said, is not due merely to tracking the total cost of care, but seeing if they're accessing data across the network, if they're getting lab data from the local lab with whom they partner, and if they're tracking the child in the EHR and all of that data is in one repository. That's what happens among adult populations, and doing so in a pediatric setting can help close the care gap.

CHA for its part has adopted some tailored standards from the state that are in some cases more rigorous than the national standards, said Harris. Those standards have been one of the drivers to incentivize primary care to understand and demonstrate the work they're doing in a way that can be recognized with the certifications in pediatrics.

The key, she said, is around preventative care. One has to look proactively at patients who have received care that's part of the scheduled care goals, and respond to those in a timely manner to get those families into the facility to actually receive the care. Implementation of the work becomes accelerated when using solutions outside of the EHR.

Henderson said engagement from pediatricians and primary care providers has been fundamental to Dayton Children's success. She expects more children's hospital will eventually decide to make the switch to value.

"Typically, in all of these national models, Medicare does it first, and eventually Medicaid will, and it'll take a little more time because Medicaid is driven state-by-state," she said. "But I think pediatrics is going to get there. Again, because it's a small part of the population, it's not the focus for a lot of organizations, but they're uniquely positioned to sort of set the tone. We can see what adult hospitals are doing, and it gives us an advantage."

According to Buchanan, a carrot or stick approach works best with pediatricians.

"Some of these organizations bring their physicians along and try to persuade them to do the right thing, but unless there's a stick or some kind of penalty, you won't see large groups of pediatrics groups change," Buchanan said. "A more proactive approach with reimbursement and incentives would be the best approach, because whenever Medicare and Medicaid do something, payers tend to follow.

"It's going to take some kind of incentive or disincentive approach to really change," she said. "We can continue to ignore it, but all we're doing is setting up 18 to 21 years of a behavior in patients who are going to have challenges we could have addressed in early childhood."

Rumsey pointed out that pediatrics is a small portion of the total cost of care -- about 8 percent of the total. What CHA would ask of players in the industry is to make sure they're investing in the right areas. A small investment in pediatrics can go a long way toward bending the cost curve downstream.

"As plans adapt to value-based contracts, there are opportunities for them to invest in where they need to," said Rumsey. "We really need to make sure the commercial marketplace is innovating. There's going to continue to be a shift, but if payment doesn't follow for many of these things we're investing in, it will be difficult to sustain. The intent at the provider level is there, but they need to make sure they can sustain that in a meaningful way."

Twitter: @JELagasse

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