New Payment Models: Are You Ready?

Chris Stanley, MD, via Trustee Magazine

Core Capabilities

While managing a patient population is new to many healthcare organizations, this is no longer uncharted territory. “We can point to successful models, and we now know what works and what doesn’t,” said Christopher Stanley, MD, director in the Healthcare practice at Guidehouse. As examples, he cites early adopters like Geisinger Health and Intermountain Healthcare.  

But time, talent, and resources are needed. “This is not like flipping on a light switch,” Stanley said. “It usually takes one-to-three years of capability development and expansion before an organization would want to take on risk, especially downside risk.”

Among the various skills needed, the following five capabilities are key to success in these arrangements, say leaders involved in this work:  

  1. Clinical Integration 
  2. Data Analytics
  3. Financial Risk Management
  4. Care Management 
  5. Team-Based Care

Trustee Takeaways: Questions to Consider About Value-Based Payment

“It’s important for trustees not to think of Advanced Alternative Payment Models (APM) strictly as some type of government hoop to jump through,” said Stanley. “It’s important to place these into the larger tectonic shift (toward value) underway in the healthcare industry.”  

Stanley recommends that hospital trustees and senior leaders consider the following questions when discussing Advanced APMs and other value-based payment arrangements:  

  • What are the capabilities we need to be successful in these programs, and how can we build or buy these competencies?
  • Do we have the right people or do we need to bring in new or additional talent?
  • What’s the right time for us to enter an Advanced APM or other risk-based payment arrangement? When do we need to start preparing?
  • Should we first participate in less financially risky APMs, such as gain-share models without downside risk, as a way to learn about population health management before entering an Advanced APM?
  • Over the next 5-to-10 years, will we see a decrease in utilization of certain services and an increase in other services? How do we need to rightsize our delivery system to successfully meet the needs of this changing healthcare marketplace? What services do we need to build, buy or affiliate with?
  • How might we need to reorganize our organization, not only structurally but also to incentivize the three legs of value: improving the health status of patient populations, optimizing the patient experience and lowering the total cost of care?
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