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August • 18 • 2020

Red Signal Report – Value-Based Care

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Contributors: Kelly Macmillan; Dave Terry; Brian York; Ben Gardner; Bob Hanscom

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Summary

Currently, less than 20% of Medicare spending is value-based. By 2025, CMS wants to have close to 100% tied to VBC contracts. Outcome: $1 trillion of healthcare risk will shift from government to U.S. hospitals, health systems, and physician practices.

This article belongs to the Coverys Red Signal Report SM series.

The U.S. federal deficit is at an all-time high, and healthcare spending makes up the biggest and fastest growing share of it. To get healthcare costs under control and “bend the cost curve,” the Centers for Medicare & Medicaid Services (CMS) is moving from a volume-based reimbursement model to one based on value, which shifts healthcare risk from their books onto provider organizations.

This represents a major opportunity for healthcare providers to grow their businesses. To be prepared, providers need to fully understand what programs are available to them, whether they’re positioned to win or lose, how their performance compares to that of their peers, what opportunities they have to earn new revenue, and their level of risk to financial loss.

Forward-leaning provider organizations are bringing together key stakeholders from their risk management, clinical quality, contracting, and medical management teams to assess the risk contracts they currently have, as well as other programs they may be interested in pursuing. Once that initial step is taken, risk can be defined and and downside protection programs structured that match with the risk tolerance of the organization.  
 

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Copyrighted. No legal or medical advice intended. This post includes general risk management guidelines. Such materials are for informational purposes only and may not reflect the most current legal or medical developments. These informational materials are not intended, and must not be taken, as legal or medical advice on any particular set of facts or circumstances. 

 

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