When I entered the field of medicine, the goal was clear; to make patients “better.” Through my hospital-based training and practice as an internal medicine physician, I developed a strong interest in illness prevention — how can we keep patients from coming here in the first place? The answer became crystal clear. What wasn’t clear was how to focus on preventative care in the current structure of the U.S. health care system.
Our health care system was brilliantly set up to handle acute bouts of care — antibiotics for an infection, a broken limb or injuries from an accident. In this way, it made sense to pay providers like other tradespeople are paid: a fee for services rendered. When your car breaks down, you go and get it fixed, hoping to never have to get the same issue fixed again.
As the country’s disease burden has shifted more to chronic care, the care delivery system has expanded, and we’ve grown to conceptualize people as more than objects to be “repaired” or “tuned up.” Wellness is now understood as ongoing, where habits (ideally healthy) impact your overall health, including how often you get sick, need to see a doctor or visit a hospital. Today, this way of paying for health care repairs is antiquated.
Slowly, the system is changing toward fee-for-value versus fee-for-volume.
Physicians and provider groups are more often rewarded for delivering high-quality care and lowering costs. In 2018, only 39 percent of health care payments were strictly traditional fee-for-service. The remaining 61 percent of payments were tied to value, quality, bundled payments, shared savings, or capitation.
Some of the most well-known Alternative Payment Models (APMs) are Accountable Care Organizations, Medicare Advantage plans, Medicaid Managed Care, Maryland’s unique global hospital budget and even commercial insurers in the individual and group markets. Almost certainly, APM participation will grow in the future, and one of the greatest barriers to wider implementation now is provider willingness to take on financial risk.
De-risking alternative payment models for providers
It is no surprise that providers may be hesitant to go “at-risk.” They trained in a fee-for-service world, and every tool they used was calibrated to optimize performance in the system. Investing in practice transformation, IT, and interoperability is not only a lot of work but also not cheap.
Most providers are also likely exhausted (and demotivated) by so much disruption and change. Administration burden never seems to abate, and then there is the complication of operating during a global pandemic. Not to mention that value-based payment models that include downside risk can result in providers potentially losing money if their care doesn’t meet thresholds of quality or value.
But there is significant potential upside for providers in APMs. To illustrate, in 2018, 60 percent of providers who engaged in value-based contracting with one major commercial insurer received shared savings. Even more importantly, quality of care did not decline, while the cost of covered medical care decreased — a triple win for patients, providers, and payers.
Recent history shows that provider interest and readiness are the main drivers of APM adoption and success. So, how can we motivate success?
One of the main goals of APMs is to breed innovation and collaboration in care delivery.
While some health plans, employers and provider groups who place fees at risk can innovate internally to meet the demands of value-based care, it often makes sense to outsource.
So many already outsource for financial services, patient navigation, remote patient monitoring, chronic disease management and more. “Tech first” startups partner with risk-bearing entities to help them keep their patients healthy while receiving the lowest dose of health care necessary.
That means preventing unnecessary urgent care or ER visits, guiding patients to in-network providers, remotely managing chronic diseases to avoid flare-ups by partnering with provider groups and payers and — importantly — doing so in a way that gives providers the resource team to be more proactive and responsive.
Providers already know that a large portion of excess health care spend is due to ED visits, readmissions, out-of-network provider visits and chronic disease flare-ups requiring repeated hospitalization.
With standard fee-for-service billing and brick-and-mortar care practices, these are all but impossible to prevent.
Keeping more patients healthy at home and supporting providers appropriately with a team and technology to manage them will maximize the opportunity to see the positive returns when fees are at risk. It will also give you back time — time spent responding to patient emails, phone calls and visits that could have been best responded to in another way. Time to spend on patients who need the extra attention.
In a time of ever-mounting change, APMs may seem like “just another burden” piled on providers. But APMs are not daunting (or a gamble) if you’re aligned with good partners who can help you to deliver the best care possible to your patients that also improves clinicians’ (and their patients’) care delivery experience.
Isn’t that what we all hoped to do when we first started our medical training?
Ronald Dixon is an internal medicine physician.
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