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Waiting to change could negatively affect business
The outcome of a decade-long debate over value-based care is clear: either adapt or a clinician’s practice will suffer. Moreover, adapting to a value-based care model now will allow independent physicians the chance to shape and impact future care models and how success is defined and measured.
For independent physicians, the debate has been whether value-based care or the fee-for-service model is better. Value-based care is a simple concept that links reimbursement for healthcare services, not just to the volume of work performed, but also the quality of the work performed. Providers receive a premium for making thoughtful care decisions that improve the total care experience for the patient. This could mean getting patients back to work sooner, treating patients with conservative therapy vs. higher acuity procedures where possible or managing the total cost of care for certain diseases, illnesses, or ailments. This contrasts with a traditional fee-for-service model in which providers are not incentivized to improve care over time across their patient populations.
As annual healthcare spending eclipses $3.5 trillion in the United States, value-based care initiatives are an opportunity to slow rising healthcare costs while also narrowing the gap between cost and quality. This new model helps shift some of the spend toward providers who are good stewards of our healthcare system. Despite the industry heading toward value-based care, some physicians are hesitant to switch their model, and by delaying, could negatively impact their business.
There’s a common misconception among providers that value-based care and its goals to lower cost ultimately mean that they will make less money. However, in the value-based world and under the proper models, physicians are incentivized to take on more responsibility for the outcomes of care while commercial payors are willing to pay more for higher levels of care if it can be measured and reported on.
Through the right tools and infrastructure, physicians are better able to understand, analyze and leverage key performance indicators and outcomes data. A deep dive into data can tell an important story. It can highlight best practices, identify opportunities for improvement and potentially uncover cost-saving measures. It is an opportunity to gain knowledge that can spark improvement in the practice and chart a path forward.
Physicians have a small window of opportunity to transition to a value-based care model—just two to three years—before they fall behind their peers. We are seeing tremendous aggregation in the orthopedic and neuromusculoskeletal spaces for example, which is making it harder for independent physicians to compete against larger healthcare infrastructures.
Over the next two to three years, independent physicians should focus on three areas of opportunity. First, they should incorporate a standard for enhancing data collection and reporting within the practice. This allows data to be parsed and sorted in a variety of ways and allows the practice to track changes in outcomes based on adjustments in treatment. Another important consideration is to define key performance indicators within the practice that lead to improved outcomes and lower costs. Finally, assign an outcomes officer within the practice to work with the collected data points and incorporate a constant improvement process into the group’s regular cadence.
By moving toward value-based care, physicians are better equipped to participate and succeed in alternative payment models like bundles and pay-for-performance. Some of the largest national health insurers, including Cigna, United Healthcare, and Aetna, report paying more than half of their reimbursements to medical providers through value-based models. This means more reimbursement to neuro and orthopedic physicians is coming from bundled payments and pay-for-performance contracts than ever before.
Without value-based care, physicians are limited to their fee-for-service contracts, which are starting to decline. Through data analytics, independent neuro and orthopedic physicians also can discover trends among their patient populations and use risk models to predict outcomes that may help lower readmission rates, which is a key measure in value-based care. During a time when increased reimbursement is tied to patient outcomes, focusing on existing data can be essential to a stronger bottom line
Physicians can ease the transition of switching over to a value-based care model by working with a company that helps them set up the infrastructure behind the scenes to harvest data throughout the practice, compare that data to what other practices are doing and provide that insight back to the practice.
The window for voluntarily switching to a value-based care model is closing quicky. It’s essential for physicians to reassess current risk models to avoid falling behind. By taking proactive steps, independent physicians will open the door to new patients and help guide what the future of value-based care looks like for their patients and colleagues while ensuring the successful future of their business.