Ian Morrison, Ph.D., a consultant and futurist based in Menlo Park, Calif. , writes about whether hospitals should focus on population health or bundled payments.
He notes that there’s “growing skepticism among many respected industry experts who question whether population health, providers at risk and Accountable Care Organizations are really the right answer. They fear these models may all turn out to be a bridge too far. Instead, they argue, we should get the basics of healthcare delivery right first. Then we should use bundled payment–type models as our lead foray into financial incentives that promote improved care coordination and clinical performance delivered by focused, high-performing teams.”.”So, there is a plausible … conclusion that meaningfully incenting providers to deliver care by taking financial risk for a defined population they serve (across the continuum of care) is an impossible dream that will end in failure. Therefore, we should settle back on bundles and other less grandiose improvement initiatives instead.”On the contrary, I still believe that our best hope for sustainable health care may well come from large integrated systems of care competing on the basis of cost and quality for a defined population.”
“Overall, my forecast can be summed up as follows:
“Integrated systems with their own health plans, regional scale, direct contracting and Medicare Advantage contracts is the end game for some large players who are preparing for population health risk.”
“Many hospitals will be caught between two paradigms for the next five years (at-risk vs. fee-for-service), but the direction is toward more risk-bearing on the basis of value through a variety of constantly evolving partnerships and risk-sharing arrangements.
“Bundled payment for procedure-oriented care presents a major step toward promoting value and care coordination that does not require population health (frequency risk).
“And finally: Value-based payment trends are not enthusiastically embraced by providers. So expect public payers to make more payment innovations mandatory, not just voluntary.”
Aetna’s planned $37 billion purchase of rival Humana, which would make Aetna the biggest health insurer, would accelerate the consolidation of health systems as hospitals seek more leverage in negotiating with insurers whose increasing size gives them vast negotiating power.
The deal would make Aetna a major player in the surging Medicare Advantage business and would bolster Aetna’s presence in Medicaid and in Tricare coverage for military personnel and their families. But everyone in the healthcare sector would be affected, directly or indirectly, including Federally Qualified Health Centers.
Modern Healthcare noted that Aetna’s announcement came a day after the Medicaid coverage provider Centene said it would buy fellow insurer Health Net to help Centene expand in the California Medicaid market, the nation’s biggest, and give it a Medicare presence in several other western states.
As private-sector-employer-based insurance has shrunken, the big insurers are expanding into public programs at an ever faster clip.
The biggest problem is that they underestimate how tough it is to compete with established insurance carriers.
Planning carefully for this competition “can help determine whether it’s best to enter as an independent plan, partner with an established entity that brings the right capabilities, or to take delegated risk from a health plan for an attributed population.”
Further, “to maximize the benefits, providers need to know exactly what patients are attributed to the plan—and fiercely manage each and every individual accordingly. For the sickest and riskiest patients, that means delivering care differently—more targeted and coordinated across points of care—to drive savings in a major way.”
“Most provider-turned-health plans are at least somewhat well-positioned to improve the quality and reduce the cost of patient care across a network if incentives are appropriately aligned; this of course is fundamental to running a profitable plan.”
“The best plans go to great lengths to learn and document every last issue about their patients to get this right, and then receive higher payments from CMS for those riskier patients.”