Joe Fifer: Cost effectiveness of health: Why now?
Investors are still bullish on provider risk. Buoyed by the relative financial stability of health systems with risk-based payment streams during this period of pandemic-related service disruptions, they are investing heavily in innovators that are willing to engage in risk-based care models. Many of these innovators are based outside of traditional health systems.
Meanwhile, legacy stakeholders have been slow to adopt risk-based payment. Most alternative payment models (APMs) are still built on a fee-for-service (FFS) chassis. Just over 11% of healthcare payments made through private health plans flowed through an APM with two-sided risk in 2020, according to the Health Care Payment Learning & Action Network.a Meanwhile, the Center for Medicare & Medicaid Innovation has set a goal of having all Medicare and most Medicaid beneficiaries in an ACO with accountability for quality and total cost of care by 2030. The reality is that value-based payment, a key component of cost effectiveness of health (CEoH), is not going away.
I realize that for many stakeholders — including health plans and employers, not just health systems — the pull of the familiar is strong. But the ground is shifting under our feet, even if we can’t feel it at a given moment. And 2030 will be here before we know it. It’s also important to realize that delivering value and organizing around CEoH is about much more than payment models. It’s about better health, which is only partially achievable through healthcare. It’s about economic sustainability and growth. And it’s about the core reason most healthcare leaders entered this field: to improve lives. That’s what makes CEoH a just cause for our industry and our society. And that’s why we at HFMA are building on our previous work on improving healthcare value and incorporating social determinants of health by championing CEoH now. The healthcare industry is evolving, and stakeholders must change along with it to stay relevant.
What does that change entail? As healthcare leaders, we must change our mindset, especially in the C-suite and the boardroom. On a practical level, we need to develop greater capabilities for risk-based contracting, invest in analytics to make data-driven decisions and rally around a manageable number of effective value-based payment methods. The time for dabbling and experimentation with value-based models is nearly over. It’s about to get real. And we, as an industry, are simply not ready.
I believe in the old maxim about “practicing what you preach.” So at HFMA, we are taking the risk of increasingly complementing FFS-related content with content on CEoH. We are committed to helping leaders and organizations make the shift toward value. That’s the risk I’m willing for HFMA to take. It’s important for our society and is our new just cause.
Are you ready to take short-term risks to carve out a role in a healthcare ecosystem built around cost-effective health? Change is inevitable. But keep in mind that it’s not change itself that most people struggle with; it’s the change that happens to us.
This is your opportunity to help shape the change. Don’t let it pass you by.
a. "Measuring Progress: Adoption of Alternative Payment Models in Commercial, Medicaid, Medicare Advantage, and Traditional Medicare Programs," Health Care Payment Learning & Action Network, Dec. 15, 2021.