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The Changing Landscape of Healthcare Economics


How healthcare executives can develop a deep understanding of the patient populations they serve.

cutting healthcare price tag

Provider compensation models will need to evolve to drive the right focus on clinical outcomes, according to one expert.

“Value-based care emphasizes clinical outcomes and tries to align reimbursement to these outcomes. This is obviously a shift from historic fee-for-service models of payment. The biggest implication for healthcare executives is that the economics of healthcare delivery are changing. For those who cannot evolve, they will be stuck in a fee-for-service world that is shrinking and less profitable,” says Bret Connor, chief customer officer for athenahealth.

According to a report from the Health Care Payment Learning and Action Network (HCP-LAN), part of HHS, the percentage of healthcare payments tied to value-based care reached 34% in 2017, up 23% from 2015. This includes shared savings, shared risk, bundled payment, and population-based payments. While still under 50%, this represents millions of patients who are recently included in these programs.

“Organizations will need to be thoughtful about the optimal patient populations to serve,” Connor says. “Individual care plans will be more important than ever. Primary care providers will play a larger role in influencing patient behavior and directing care. Finally, data will be more critical than ever-both the capture and use of key data. If clinicians are measured on the cost and quality of care they deliver, it is crucial that they have access to information from other care settings the patient visited to make the best decisions for that unique case.”

Overall, according to Connor, the complexity of running a healthcare organization will increase dramatically and financial success will depend on the ability to meaningfully exchange data while better managing the cost and quality of care.

Key tech areas

Technology will play a larger role than ever in a world of value-based care, according to Connor.

“Success will require aggregating the right patient data, adopting new care delivery models, closing key care gaps at the point of care, engaging with patients outside the point of care to influence behavior, directing care to the right places, and closely monitoring cost and quality measures against reimbursement contracts,” he says.

Related: Real-World Benefits Of Value-Based Care

There are multiple essential technology building blocks. “Organizations will need analytic tools that aggregate data from multiple systems (EHRs, RCM tools, payer data feeds) to inform quality metrics, referrals, and care delivery,” Connor says. “Software tools that enable mobile or virtual patient engagement will be important, including those that enable virtual care visits, support in-home clinical encounters, and pull in information from connected mobile devices.”

Practice management software tools will need to provide enhanced visibility into the economics of value-based care contracts, he says.

“Combined with patient engagement software, these tools will need to enable the capture of the right patient screening data and provide care planning capability that is exposed to patients. Clinical quality metrics will need to be maintained, kept in line with program-related updates, and tracked on an ongoing basis,” according to Connor. “Tools that support the scheduling and ordering of services will need to be optimized-utilizing insights from aggregated data-to direct care to the most cost-appropriate options that will meet patient needs.”

Finally, according to Connor, the clinical support tools that providers rely upon will need to prompt for the right documentation, surface care gaps that need to be closed to improve care and clinical quality scoring, support the process of directing care to the right places, and ensure that the right diagnosis codes and procedure types are selected. “At the same time, these tools need to be easy to use and allow care providers time to interact with patients,” he says.

What execs need to do

Healthcare executives need to develop a deep understanding of the patient populations their organizations serve, according to Connor. They will need to:

  • Execute the right value-based care contracts based upon the capabilities of their organizations (e.g., managing overall patient health vs. providing best-in-class delivery of specific procedures) vis-à-vis their target patient populations.

  • Put in place the right tools for aggregating patient data and tracking clinical quality metrics.

  • Upgrade their organizations’ practice management, patient engagement, and clinical decision tools to enable better care planning, scheduling/ordering, and new modalities for care delivery.

  • Ensure that their care providers are documenting in a consistent manner and closing key care gaps at the point of care.

“Survival of healthcare organizations depends upon getting this right,” Connor says. “The sustainability of the U.S. healthcare market depends upon this as well.”

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