The Challenge to Remain Independent
Although the passage of the Affordable Care Act (ACA) in 2010 has resulted in more insured Americans–about 10 million to date–it has also created new challenges for independent physician groups and independent physician associations (IPAs). Under the current Fee-for-Service (FFS) model, payors created volume-based provider economics, where providers were paid each time they delivered a service. The new approach is “accountable care,” a model that places the focus on value over volume. Payment is tied to patient outcomes and appropriate use of healthcare resources.
But whether physicians are ready or not, the ACA is driving change across the entire healthcare landscape. At the heart of health care improvement is the so-called “Triple Aim” : improved experience of care for the patient, improved overall health for the community and lower overall costs, with a network of collaborating physicians at the core of care delivery. Although providers bear a greater portion of clinical risk under the new model, they are better positioned than payors to make proactive clinical decisions and appropriate tradeoffs. For the first time, providers have the opportunity to benefit from more cost-effective health outcomes, and many physician groups and IPAs have already been dipping their toes in the Accountable Care waters.
The Move to Value is Changing the Treatment Paradigm
Under a value-based contract, providers agree to provide health care to specific patient populations at a fixed reimbursement rate, reflecting historical costs and adjusted for population-specific risk. If a medical group is able to deliver that care for less than the target reimbursement, they share in the savings, either as part of a risk-sharing program or pay-for-performance.
Providers have always viewed high quality care as an imperative, but traditional FFS contracts were never designed to support proactive care and disease management. Today, physicians need to think differently about their medical practice, learning how to help their patients manage their chronic illnesses to avoid acute episodes, for example, or identifying which patients in their practice are clinically at-risk for high resource utlization.By focusing on the value of the health care given and the well-being of the patient instead of the volume of services provided, value-based contracts can improve quality, reduce overall costs, and improve providers’ financial performance—but only if they are able to work together and coordinate care.
Unfortunately, many physician groups and IPAs are underequipped to manage proactive care and total cost performance, and lack the strategic partnerships with ambulatory, acute, and post-acute care providers.Moreover some groups lack the strong development strategy needed to achieve the information competencies required for effective population management, and to learn how to benefit clinically and financially by managing clinical risk. To do this, providers need extensive patient information. Without it, the group will find it almost impossible to understand patient stratification––what segments live inside the total population–– or how to manage them.
Opportunity for Independent Providers
Physicians must align on value and cost savings across the continuum of care, and agree on standards of care and performance metrics. Communication and information sharing is key to care management, and the ability to analyze population health data to define patients at clinical risk for high cost care can be the difference between success and failure. The ability to manage patients with chronic disease will become a crucial competency, and physicians and hospitals must align to reduce readmission rates after acute exacerbations, one of the quality and cost-saving benchmarks. But how can providers achieve this?
Regulatory authorities have defined the conditions, collectively referred to as Clinical Integration, under which providers can collaborate to improve quality and efficiency, while remaining independent entities. In return for investment in performance infrastructure and initiatives,a Clinically Integrated Network allows direct negotiation with insurers for better payment rates, or incentives based on quality and cost improvements.
With the right implementation, Clinical Integration comprises the organizational attributes necessary to catalyze the transformation of health care delivery, while allowing independent providers to continute to benefit from existing FFS and new value-based reimbursement opportunities. Learn more about preserving independence, improving clinical quality and enhancing financial performance in Continuum's White Paper: "Driving Value Through Clinical Integration: How Independent Physician Groups and IPAs can remain independent and profitable in a changing healthcare reimbursement environment."
To discuss how Continuum can improve your coordinated care goals, please contact: Devon Swanson, (856) 782-3300 ext. 2419 or [email protected]