Moving Ahead on the Long Road Toward Value-Based Healthcare

By The SHSMD Team posted 02-13-2018 04:54 PM

Futurescan 2018-2023: Healthcare Trends and Implications brings together an impressive lineup of guest authors who provide wide-ranging insights on the important issues facing hospital and health system leaders over the next five years. In particular, this year’s Futurescan provides important evidence of progress regarding healthcare’s long road toward value.

Mike Leavitt, former governor of Utah and former secretary of the US Department of Health & Human Services, draws on his vast experience to put the long-term future of healthcare payment reform in perspective.

He urges providers to move beyond the current political and policy uncertainties and to focus on the shift from fee-for-service to value-based reimbursement. In Leavitt’s estimation, the nation’s healthcare system is 25 years into a 40-year journey on the path to value, and although progress may at times seem slow, the direction is clear.

Leavitt reviews the payment initiatives emerging in both the public and private sectors. While acknowledging that results to date have been modest, he emphasizes that there are encouraging signs that value-based payment can spur providers to improve the quality of care, reduce costs, and be more responsive to consumers.

Richard L. Gundling, senior vice president of healthcare financial practices at the Healthcare Financial Management Association, offers an insightful perspective on healthcare consumerism, pointing out that out-of pocket costs and the process of paying for health services have become major sources
of dissatisfaction for many Americans.

To address the problem, Gundling says providers must focus on developing patient-friendly billing practices, provide empathetic and compassionate guidance on patients’ options for payment, and avoid sending surprise bills. He also urges providers to pay increased attention to consumers as decision makers, given that insurers and employers are increasingly shifting to high-deductible health plans and incentivizing patients to “shop” for services.

Cybersecurity experts John Riggi and Patrick Pilch of professional services company BDO deliver a fascinating review of the challenges online threats pose to hospitals and health systems.

  • They urge healthcare organizations to take the following important steps:
  • Introduce cyber hygiene policies and a cybersecurity training program for employees.
  • Identify and address any potential weak points in information technology systems.
  • Implement threat monitoring and analytics tools capable of detecting an attack, and apply investigative capabilities to understand what went wrong and assess the damage.
  • Develop an internal and external crisis communications plan that is aligned with risk management.
  • Make sure your organization has adequate cybersecurity insurance.

Equity of Care
Eugene A. Woods, FACHE, president and CEO of Carolinas HealthCare System and immediate past chair of the American Hospital Association board of trustees, offers thoughtful insights on the link between care disparities and social determinants of health.

Woods points out that despite providers’ best intentions, enormous differences in healthcare quality, access, and outcomes persist because of factors of race, ethnicity, income, and geography. He goes on to stress the key role that social determinants of health play in driving disparities.

He lays out an agenda for how providers can address the problem. For example, they can use data analytics to assist with hotspotting, optimize their workforces to reflect the diversity of their communities, and seek greater collaboration with a wide range of community partners.

Woods also advises leaders to incorporate health equity goals and outcome measures into their organizations’ strategic plans.

Emergency Care
James J. Augustine, MD, a member of the board of directors of the American College of Emergency Physicians, highlights the rapid changes taking place in emergency care. He says the future of the field is being shaped by:
  • Changing consumer expectations that demand new and more affordable options for emergency and immediate care
  • Pressure from both businesses and commercial and government insurers to lower medical costs
  • The increasing prevalence of urgent care centers and walk-in clinics
  • The emergence of new models, such as freestanding emergency departments, microhospitals, and telemedicine
  • Steady growth in hospital-based emergency department volumes
Augustine advises leaders to strategically determine the most effective ways for their organizations to respond to these developments while remaining mission focused.

Don King, lead for the Healthcare Executive Leadership Council of the American Hospital Association’s American Society for Healthcare Engineering, reviews current and future trends in healthcare facilities management.

He emphasizes the following implications for healthcare organizations:
  • As capital investments shift away from the main hospital campus, an increasing number of providers are buying or renting former retail buildings to bring services closer to the community.
  • The need to withstand earthquakes, floods, and other catastrophes will tax the budgets of many healthcare organizations as they make costly enhancements to strengthen their facilities.
  • In this age of growing societal violence, hospital leaders need to undertake facility improvements to enhance patient and caregiver security.
  • With the threat of narcotics theft on the rise, hospital and outpatient facility pharmacies must increase pharmaceutical safety.

Role of Employers
David Lansky, PhD, president and CEO of the Pacific Business Group on Health (PBGH), provides an important perspective on the role employers are playing as a driving force in transforming healthcare.

Lansky says businesses want providers to be more responsive, improve the quality of care, slow the escalation of medical costs, and increase the affordability of services.

He highlights the shift toward greater direct contracting with providers by self-funded employers and public purchasers of health insurance. Lansky says examples such as accountable care organizations and bundled payment models are being driven partly by employers’ frustration with the lack of progress health plans have shown in addressing their concerns.

Looking to the future, he says businesses can seize opportunities with self-insured employers by:
  • Understanding their own performance in terms of cost and quality
  • Talking to local employers
  • Redesigning care to continuously improve value
  • Engaging in regional community efforts

Provider Health Plans
Paul H. Keckley, PhD, a healthcare consultant and thought leader, sheds light on the trend toward provider-sponsored health plans (PSPs).

Keckley notes the difficulties these plans face in the marketplace but also explains why many hospitals are embracing PSPs as a strategy to avoid being excluded from narrow health networks, gain insights into the pros and cons of assuming greater risk, and position themselves for population health.

He points to three potential paths moving forward:
  • For hospitals that already sponsor plans, the focus will be on enrollment growth and benefit design innovation, with special attention paid to contracting opportunities in Medicaid and Medicare.
  • For hospitals that are not currently offering plans but are located in markets where sponsorship makes sense, the time may be right to consider a PSP strategy.
  • For hospitals in markets where sponsoring a PSP is not feasible or prudent, participation in shared-risk arrangements with payers will be an important option.

Futurescan provides important insights into how healthcare organizations can proactively respond to key trends in the field. Of course, hospitals and health systems must continue to focus on the basics of cost management and continuous improvement in clinical care. These eternal verities will only help to advance value-based care for purchasers who demand it, for consumers who expect it, and for communities across the nation that deserve it.

By Ian Morrison, Ph.D.
Healthcare Futurist

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To order print or digital copies of the publication (individually or in packages of 15), visit It’s a great resource to share with your leaders to help your organization prepare and plan for the future.