Five Steps to Enhance Margins in a Volume or Value World

Becker's Hospital Review

In what seems like a weekly occurrence, press and political pundits are promoting conflicting messages about healthcare’s movement from fee-for-service to value-based payment models.

On one hand, Medicare cancelled its mandatory bundled payment programs late last year, and we’ve recently seen an exodus of accountable care organizations (ACOs) from Medicare’s Next Generation ACO Model.

Yet, in January, Health and Human Services Secretary Alex Azar used one of his first public appearances to suggest that value-based care “needs to accelerate dramatically.” Furthermore, private sector momentum continues to grow, with the nation’s largest private payers now paying out approximately half of their reimbursements via value-based models.

Through this volatility, one fundamental truth is clear: While the future of value-based contracting is foggy, the industry remains committed to the value-based care concept. And we have to, given how much we spend on healthcare with inconsistent quality outcomes in return. With expenses rising faster than revenues even for high-performing systems – all at the top of a strong economic cycle – providers have a minimal margin of error to make value-based investments that don’t yield a positive return, or even reduce top-line revenue.

Now more than ever, it’s critical for providers to both drive revenue and margin growth, while also preparing for an uncertain value-based payment future. Following are no-regret strategies providers can pursue now that, if completed in succession, can help achieve these dual purposes.

  1. Emphasize in-network customer keepage 
  2. Consider Medicare Advantage partnerships 
  3. Engage physicians to drive internal clinical standardization
  4. Focus care coordination on patient populations driving negative margins
  5. Reduce total cost of care in targeted areas

Read Full Article

About the Experts

Back to top