Providers Plan to Up Spending on Health IT to Support More Risk
Close to two-thirds of hospitals and health systems said they plan to increase investment in health IT capabilities to enhance their payer collaboration and support increasing levels of risk.
Source: Thinkstock
- Close to two-thirds of hospitals and health systems said they plan to increase investment in health IT capabilities to enhance their payer collaboration and support increasing levels of risk.
Fifty-seven percent of 170 hospitals and health system senior finance executives surveyed by the Healthcare Financial Management Association said that they would increase investment in physicians to enhance payer collaboration and support increasing levels of risk, and 56 percent said they would increase investment in member engagement to achieve this result.
Close to half of respondents said their organizations are part of or plan to launch a provider-sponsored health plan as part of their risk strategy.
Seventy-two percent said they believe that their organizations have the capabilities necessary to support increased levels of risk and plan to take on more risk in the next one to three years.
The survey found that healthcare providers are ready and planning to assume more risk through commercial payer and Medicare contracting models and Medicare Advantage.
“The Affordable Care Act left many providers assuming that risk-based models would be the new normal, but the transition has not been as successful or widespread as anticipated,” said Richard Bajner, managing director and healthcare value transformation practice leader at Navigant, which provided analysis of the survey results.
“With most health systems anticipating continued downward pressure on margins, accepting risk can represent a lever for revenue growth, as long as providers clarify internal accountabilities and commit enough of their resources to risk models. These results show the value-based movement may be coming full circle, and this time providers will benefit from previous experiences in designing their approach,” Bajner added.
Forty-two percent of respondents said that operational processes, such as contract execution, care coordination and management, are the top challenge with maintaining risk-based capabilities.
Twenty-three percent said that scale is the top challenge, 22 percent said reporting insights was the top challenge, and 13.2 percent said that data integrity was the top challenge.
Among respondents who said their organizations would not support increased risk levels, 56 percent cited a lack of local market demand as the reason.
Provider Strategies for FFS, Value-Based Growth
Navigant predicted that providers will continue to operate in a market drive by fee-for-service (FFS) payments, but the path forward for providers does not have to be an either/or scenario.
Providers identified several strategies for fee-for-service and value-based revenue and margin growth:
- Engage physicians to drive clinical standardization through a hospital quality and efficiency program, a contract between a health system and an accountable care organization, or clinically integrated network
- Focus cost reduction on discrete areas, such as post-acute care, pharmacy care, and management of high-risk patients
- Emphasize in-network customer retention by building strong provider network relationships through healthcare IT connectivity, a shared referral management infrastructure, and common standards for access, quality and cost
“Sharing risk must be a collaborative pursuit between payers and providers,” said Kai Tsai, managing director of Navigant.
“It’s clear that providers are building the capabilities needed to support enhanced levels of risk and are planning to increase their risk assumption. Both entities need to partner more closely to lessen the gap between the supply of and the demand for risk arrangements in markets nationwide,” Tsai added.
