The Risks and Rewards of Value-Based Reimbursement

Abstract

As healthcare systems across the country shift to value-based care, they face an enormous challenge. Not only must they reimagine how they identify, engage, and manage the care of patients, they also need to determine new ways of engaging and aligning physicians and other caregivers in creating better-coordinated care across the continuum. This article explores how healthcare systems making the transition from volume to value can maximize their reward while managing their risk. As the largest not-for-profit healthcare system in the United States and the largest Catholic healthcare system in the world, Ascension is committed to making its own transition, marked by broad-based innovation. We call this goal the Quadruple Aim: improving health outcomes, patient experiences, and provider experiences while lowering the overall cost of care. Healthcare systems and providers have many value-based models to choose from, including pay for performance (P4P), shared savings, bundled payments, shared risk, global capitation, and provider-sponsored health plans. Analysis of these options should include an evaluation of market readiness (i.e., the ability of a health system to align with the needs of employers or commercial insurers in a given market). Healthcare systems also must be prepared to invest in resources that facilitate effective transitions and continuity of care--for example, care management. In addition, they need to recognize that as they focus on wellness, inpatient volumes will decline, requiring cost-structure adjustments and added ancillary services to compensate for this decline. Some healthcare systems are even exploring the possibility of becoming their own payer, taking on more risk and responsibility for the health of patients and populations.