The COVID-19 pandemic has changed the landscape of healthcare dramatically. The pandemic has highlighted the challenges—and opportunities—across the industry:
- The fragile state of fee-for-service (FFS) and the limitations of the current financing mechanisms in healthcare
- The spike in demand for alternative care delivery sites such as virtual care and telehealth—and the need for a more consumer-centric experience
- The realization that value-based care and sustainable revenue diversification must be part of a health system’s long-term strategy
What We’re Hearing
Over the past few months, Lumeris virtually convened our health system partners and corporate subject matter experts to discuss how health systems and provider-sponsored plans are recovering and the opportunity to come back stronger in light of COVID-19. Below are four key takeaways from our discussions:
#1: Fee-for-service is broken
COVID-19 has exposed the frailties of FFS and the need to accelerate toward value-based payment that supports a sustainable healthcare delivery system while simultaneously meeting the broader community’s health needs.
- Risk contracting will accelerate. Lumeris care management, data and analytics, and physician engagement capabilities enable us to be more prepared than ever to manage this risk successfully—and we continue to innovate and share best practices across markets. Embrace this risk and create your new future.
- There may be no better time for physicians to leave the fee-for-service model behind. Engage with PCP leadership and your compensation consultant to create a deliberate plan to transition compensation to risk, support your physician enterprise with the tools to manage the risk successfully, and protect them with a downside risk mitigation strategy.
#2: Address short-term FFS impacts while preparing for the longer-term move to value
Health systems are on their path to recovery—but the demand for healthcare has not returned to historical levels. It may be tempting to pursue all FFS opportunities, but it won’t set the system up for future success. There are a few tactics that healthsystems can employ in the short term.
- Don’t panic! Do not feel pressure to sign any amendments to your value-based contracts in the short-term.
- Don’t let quality be the barrier to capturing value. In Q3 and Q4, focus on reconnecting care, prioritizing patients for in-person or virtual visits and identifying opportunities to positively impact quality scores.
- Engage physicians sooner rather than later. Now is the time to work with physicians in closing gaps in care; a second COVID wave may derail plans for end-of-the-year campaigns. Help prioritize outreach by considering the length of time since a patient’s last PCP visit, overdue cancer screenings, uncontrolled conditions, and non-adherence to medications.
- Embrace virtual solutions for more than patient care. Virtual solutions can be used to increase access, meet quality metrics for 2020, and manage care in the clinical setting. It can also increase attendance and interaction at CIN board and committee meetings, medical staff meetings, and department meetings.
#3: Set a strategy to meet your goals
Creating a glidepath and consistent activities that move the health system to value are more important than the speed in which the system moves business from FFS to value.
- Capture the value you create—and invest in population health. Health systems can start these conversations outside of FFS contract negotiations by proposing additional quality or infrastructure payments based on programs that increase the quality of care. Use these dollars to further invest in infrastructure to accelerate the system’s ability to keep the population healthy and create value.
- Risk contracts provide the resources necessary for patient engagement. It is unlikely that your health system will have only risk arrangements now, but it is beneficial to have a plan to grow FFV business. Consider how new patients can be engaged. For example, a direct-to-employer strategy starting with your own employees may help de-risk the path to risk in the commercial population.
- Collaboratively develop a prepayment model with your closest payer partners. Prepayment mitigates swings in healthcare demand that create a win-lose relationship between payers and providers in a FFS model. Providers can learn from prior attempts to capture prepayment as they navigate contracting and risk payments in a pandemic and post-pandemic landscape
#4: Patient engagement is imperative to creating value
- Deliver value as a health system and articulate it to payers and patients. In a value-based model, the health system—not the payer—is more capable of delivering high quality care and managing population health to the patient member through its provider network. Health systems may benefit from this dynamic by creating and cultivating a patient-centric brand that builds loyalty.
- Your system’s front door is virtual. Whether or not the care is provided virtually, patients will initiate a relationship with your system virtually which is also the first chance for patient engagement. Create an experience that provides resources and direction to the patient that keep them engaged in your system.
- A network must be adequate, marketable, and desirable. Your provider network is adequate when the size of the network aligns with the right value-based right contracts and populations that can be managed effectively. A network is marketable when it moves from thinking about competition to co-opetition through clinical integration. Finally, a desirable market is measured by the patients, who providers think of as “members.” Market desirability is about brand loyalty.
- Harness the power of social determinants of health. Work with IT and others to integrate social determinants of health (SDOH) data into the workflow and into providers’ practice. SDOH data may be used as context or for care direction, especially for virtual care.
Building a sustainable future
As health systems continue to navigate the changing healthcare landscape amidst their pandemic recovery, it is clear that the status quo is unsustainable. Through conversations in market with client partners and other market leaders, we believe that progressive health systems are using the current environment to drive their organizations toward a more sustainable future—anchored on value.
As an operating partner, Lumeris is committed to helping health systems make a successful transition. While the journey is different for each market and organization, we can help de-risk the path. We can help your system prioritize strategic objectives, provide the enabling capabilities that help drive value faster and improve health outcomes across all your populations, today and in the future.