The future of value-based care is a crucial issue that impacts all of us. Healthcare costs continue to rise, a concern that is fast becoming one of the greatest threats to the security of future generations. This challenge is exponentially growing and is largely self-inflicted.
In 2018, Axios estimated Americans spent 3.65 trillion dollars on healthcare. That equates to over $11,200 per person. Analysts predict that cost to continue to rise. Let’s take a look at the high-priced world of healthcare.
Shifting models highlights the need to invest
Shifting from a fee for service based reimbursement to value-based reimbursement is one way to halt rising costs. It’s too early to measure/quantify results, but on paper the theory makes sense. The major challenge is not with the idea but rather within the execution.
The burden of implementing a new payment model for providers is immense. Claims data serve as a dashboard of performance for healthcare organizations. However, it’s arguably an inaccurate snapshot of success and failure of care. Often such data are more a reflection of non-clinical processes within the revenue cycle and documentation of the care that was provided.
That means these complicated processes require hospitals to act. Investing in technology and education in ways that benefit end users is a starting point. Additionally, investing in case management, patient scheduling, care coordination, and nearly every function of the revenue cycle is necessary. The potential revenue ramifications are higher compared to the former fee-based system.
Patients ultimately will undoubtedly benefit from this additional investment from providers; however, we are asking a great deal from the organizations and people that provide our care. There needs to be a shared responsibility from non-provider healthcare companies that contribute to the overall cost of healthcare.
Navigating the spend
Insurance conglomerates must also be held accountable for controlling healthcare spend. Profits for major payers have soared in recent years, and the cost of insurance continues to rise for employers and individuals. The exponential increase in cost has not translated into better care. It’s hard to identify other services or goods that increase in price without providing a greater benefit.
Here at Harmony, we now employ more than 500 people nationally. One of our tenets is ensuring our people have affordable benefits. Our open enrollment period starts next month, and the preparation each year is our own version of Groundhog Day. The cost to offer benefits at no additional cost to our team members is a significant investment. Our leadership team meets each year to review options:
- Do we continue to subsidize for the increased cost and sacrifice the opportunity to invest elsewhere?
- Or do we ask our people to share in the burden?
Our answer each year is unanimous: we do the right thing and cover the increase as a company. The out of pocket payment remains consistent, and even then, we feel the reward for our people is expensive.
Assessing resources and costs
The cost of benefits to consumers is obvious and the initial factor most of us see. The back-end impact of payer/provider relationships is less noticeable, but may have an even greater effect.
Payers armed with soaring profits are ahead of the game in the world of value-based health outcomes. They have already invested into data analysis to the point of being able predict which claims to deny. They also have historical information on how organizations react to those denials.
No payer should pay a claim that is incorrect. However, it’s crucial our payers work with providers and not against them. Denied claims increase a hospital’s cost to collect. In many cases, revenues are completely lost. Many revenue cycle leaders I speak with believe they are trying to hit a moving target with unequal resources.
Our consultants with experience on both sides of the house (hospital and payer) have proven to be invaluable resources for our clients. They know the game and refuse to give up out of frustration. There are many successful provider/payer relationships, but far too often the conflicting motivation ends with one side losing. That side is almost always the provider. It’s important we understand when our providers lose that we all do and that the cost of care in any system will continue to rise.
The bottom line
The future of value-based care is rife with complicated challenges, but there are solutions. Deregulation of the health insurance industry and litigation reform would be ideal first steps. In lieu of those, we must find common goals for the greater good of society. Insurance companies and profits are not bad, as many have invested into technologies and many areas that improve patient care. Our goal is not to assign blame but rather to inspire cooperation and increase awareness. The best plans are only viable when all parties have common goals. The affordability of healthcare should motivate our best.
We’re here to empower you
At Harmony Healthcare, we think differently about our clients.
- We deliver solutions differently.
- We build client relationships differently.
- We’re focused differently.
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