Success in the new value-based healthcare world: Integration of important clinical and financial models

Mike Schweitzer, Richard Doane, Glen Champlin and Joseph F. Damore

Management in Healthcare: A Peer-Reviewed Journal, 2018, vol. 3, issue 2, 113-131

Abstract: This paper discusses many factors that are critical for organisations to successfully transition from fee-for-service to value-based payments. US federal and state government and commercial payers have developed new payment models such as accountable care organisation (ACO) and bundled payment programmes. Premier member healthcare organisations joined in learning collaboratives to share leading practices and leverage claims data to accelerate their successful transition. Nearly 75 per cent of Premier’s ACO Collaborative members achieved savings in the Centers for Medicare & Medicaid Services (CMS) Medicare ACO programmes as compared with 57 per cent of all organisations in the programmes. More importantly, 48 per cent of Premier Collaborative ACOs shared in the savings as compared with 23 per cent of all Medicare ACOs that included a hospital. In the first year of the CMS Comprehensive Care for Joint Replacement programme, Premier Collaborative members represented 6 per cent of the programme participants but achieved 11 per cent of the total US$37.5m in Medicare savings. This paper outlines the potential impact of risk scores on a group not coding to the highest level of accuracy and specificity and failing to receive shared savings using the metrics in a prototypical 50/50 gainshare value-based payment contract, as well as a group that improved its performance in coding and experienced a 0.2 increase in average group risk score for 2,000 lives, and an additional US$120 per member per month that resulted in shared savings from the payer to the provider of US$1,032,000. One health system narrowed its post-acute care network, reducing length of stay by 5-7 days, and achieving readmission rates of less than half the national average. Another case study demonstrated a US$6.2m savings in a blood utilisation management programme across its 22 acute care hospitals over three years. Nine key capabilities enabled these organisations to achieve success in better managing population health. These leading practices are helping to bend US healthcare costs.

Keywords: value-based care; value-based payment models; ACO; bundled payments; CIN; care coordination; high-value network; population health management; alternative payment models (search for similar items in EconPapers)
JEL-codes: I1 I10 (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:aza:mih000:y:2018:v:3:i:2:p:113-131

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