Chapter 2: Population health and value-based care Bookmark has been added
Chapter 2: Population health and value-based care
Hospital CEO survey series
Value-based care and population health: two words that are probably "not new" to hospital CEOs. But these issues are starting to feel more expedient, according to our recent survey of hospital and health system CEOs. How are CEOs preparing for value-based care and population health, and how does MACRA fit into these strategies?
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Putting population health into high gear
Even though the shift to value-based care is occurring more slowly than CEOs anticipated, executives are developing and expanding innovative delivery and payment models to get ahead of where the industry is headed. CEOs are focused on the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) and physician activation. They also are looking into strategies to generate physician buy-in and inspire behavioral change, which will help them be better prepared for the transition to population health and value-based care.
Value-based payment models reward efforts to improve quality and reduce cost. Under these models, payments to hospitals and physicians are based in part on episodes of care, and providers might face some financial risk. The use of value-based payments is increasing due to policies such as MACRA, initiatives from the US Centers for Medicare and Medicaid Service's Center for Medicare and Medicaid Innovation (CMMI), state Medicaid programs, and, to some extent, private-sector health plans. Many CEOs said that population health is key to their success under value-based care payment models.
Hospital CEOs weigh in
Population health requires data and analytics to identify at-risk patients and target services that reduce their use of expensive and low-quality care. Under a population health model, providers manage care—from preventive and maintenance care to acute care and long-term care–for a defined population. Those who are most successful often deploy innovative delivery models; analyzing data and trends in a population's health, quality, and costs; and bearing financial risk. Value-based payment contracts reward providers for successfully executing these processes.
Many of the surveyed CEOs expressed concerns about operating in two different systems (fee-for-service and value-based contracts) and having misaligned incentives. Moreover, moving toward population health and bearing financial risk will likely require a large population.
Even if health systems are not yet seeing value-based and population health-management contracts, they should still prepare. CEOs agree that the industry is moving in this direction, and say their fellow CEOs should focus on health outcomes and costs of their patient population. CEOs told Deloitte they intend to partner and grow business purposefully and create incentives and support for physicians to operate in a new model. Health systems preparing for value-based care and population health also should consider expanding their patient network and reach. Groups managing the care of larger populations will likely be able to better manage their margins and financial risk.
"The transition to population health and value-based payments is a concern, but also a huge opportunity for our country to provide better health care at lower cost."
—CEO of a large nonprofit health system
Moving forward in an uncertain environment
Hospital CEO survey series