Trend | Healthcare Business Trends

The Ongoing Pursuit of Better Payment Models

Trend | Healthcare Business Trends

The Ongoing Pursuit of Better Payment Models

HFMA will be your source for all things related to payment trends, as it may be one of the hottest topics in our industry. 

Payment trends may be one of the hottest topics in our industry. It is a discussion, however, that has been going on for years.

Healthcare finance professionals have long grappled with economic issues and experimented with payment models. My own experience goes back to my first CFO position at Saint Michael’s Medical Center in Newark, N.J., where we implemented a new experimental reimbursement system. It was based on DRGs under which groups of relevant services were covered with single payments, with coverage also provided for bad debts and charity care. A few years later, the federal government adopted DRGs as the national reimbursement model, and the approach continues to be used today.

That experience was an enormous challenge. And reflecting on it, I see how invaluable my HFMA membership was during that period, because it provided me with access to timely education, resources, and a forum to connect with others facing similar challenges. It is a scenario that has repeated itself time and again throughout my career as HFMA has consistently led the way in providing the latest research and tools necessary for staying on top of payment-related trends, including managing the volume-to-value transition and implementing patient-friendly billing practices.

This past summer, HFMA released the results of its latest study analyzing performance results of accountable care organizations and other population-based value-based payment models. The study, conducted by HFMA, Leavitt Partners, and McManis Consulting, with support from The Commonwealth Fund, was different from others in that it focused on market-level, rather than model-level, impacts of value-based payment (VBP). The researchers found that early years of VBP models did not show a reduction of the total cost of care or improvement in clinical quality outcomes at the market level. Potential explanations include limited prevalence of VBP models in many markets, lack of strong financial incentives for managing the total cost of care, healthcare organizations’ preference for an incremental approach to risk, and employers’ reluctance to change benefit design. Based on these findings, the report recommends moderating the growth in total cost of care by continuing movement toward models that increase financial incentives; balancing the benefits of competition with those of integration; and supporting more transparent sharing of cost and quality information.

For more information on the study and its findings, I encourage you to read our Total Cost of Care study. While you’re there, be sure to check out HFMA’s other payment-related resources. With HFMA as your partner, you’ll be well equipped to not only take part in discussions about today’s payment models but also imagine ways to make them better for tomorrow.

About the Authors

Kevin Brennan
FHFMA
CPA

Advertisements

Related Articles | Healthcare Business Trends

Column | Coronavirus

U.S. faces a challenging road to recovery after COVID-19

President Biden faces an enormous challenge in achieving his promise of distributing the COVID-19 vaccine nationwide and bringing the nation back to economic prosperity. Time will tell if the President can delive on that promise.

Column | Capital Finance

Liquidity levels in a COVID world: Why healthcare finance leaders should be paying attention

Amid the COVID-19 crisis, many hospitals and health systems are finding they have excess liquidity levels on hand. As a result, they face a question of whether, and how, the should unwind their excess liquidity positions in favor of a more streamlined cash management process.

Blog | Financial Sustainability

NFP hospital profitability plummeted in 2020 despite expense mitigation strategies, Moody’s reports

Profits were down in the not-for-profit and public healthcare sector in FY20, but management strategies helped to increase liquidity amid the COVID-19 pandemic.

Sponsored Content | Budgeting

40% of hospitals reconsidering traditional budgeting amid pandemic: HFMA poll

A n October 2020 HFMA survey, by Strata Decision Technology, found that the COVID-19 pandemic prompted many U.S. hospitals to consider moving from a traditional budgeting process to rolling forecasting, with one in five already having made the move.