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Allen Miller, CEO, COPE Health Solutions

Key Trends in 2018 for Health Care Organizations Moving to Value-based Payment and Population Health Management

Allen Miller
Chief Executive Officer
COPE Health Solutions

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Original Publish Date: February 6, 2018

Healthcare is in a tumultuous time and what's for certain is that nothing is for certain. The passing of the recent Tax Cuts and Jobs Act of 2017 (TCJA) has broad but still not completely understood implications for the business community and economy, including non-profit health hospitals and health care systems, generally adding more complexity and uncertainty. It is also unclear what impact the elimination of Accountable Care Act (ACA) individual mandate penalties will have on uninsured rates. This uncertainty has not stopped, and perhaps has fueled, interest by employers and investors in creating alternative health care financing and delivery models, as evidenced by the recent announcement between JPMorgan Chase, Berkshire Hathaway, and Amazon.

That said, amidst all of the change and noise, there continue to be consistent themes that will enable successful strategy formulation and execution for health care organizations focused on thriving in pluralist payment environments, working to incorporate value into their strategy, and managing both health and costs at a population level. One theme we'll continue to see is fewer health care dollars per person. The baby boomers continue to age into Medicare, and the ACA Medicaid expansion and exchange products continue to cover many Americans. There simply will not be not enough money at the federal, state or employer level to continue to support the continued growth in total health care costs seen in the U.S., particularly given the level of clinical practice variation and inefficiencies in the system, and with expected steep increases in Medicare Advantage enrollment.

As we kick off 2018, we see that some healthcare organizations are "hunkering down" as they try to ride out the wave of uncertainty and focus on reducing costs, improving performance, and enhancing revenue cycle. Others, particularly those in the process of moving to value-based payment contracts and willing to take financial risk for outcomes and costs, continue to push toward their transformation goals. We believe there are great opportunities ahead for these organizations, particularly as they focus on improving performance under value-based payment contracts, including Medicare opportunities such as Next Generation or Medicare Shared Savings Program (MSSP) ACOs and Bundled Payment for Care Improvement Advanced (BPCI Advanced). Success will require significant delivery system reforms, such as developing well-organized local provider and Community Based Organization (CBO) networks that can combine access to the right level of care at the right time and place with social services support, as well as enhancing care management and utilization review capabilities while leveraging evidence-based clinical practices and strong data analytics.

Health care organizations that make the right investments in transforming their provider network and population health management capabilities and are strategic and data driven with their transitions into taking financial risk through value-based payment contracts will be well positioned to succeed.

As we look ahead and consider what will impact these organizations, here are a few of the most pressing points that we should keep an eye on:

These are among some of the most critical trends impacting health care organizations that are in the process of transforming and moving to risk and population health management, while continuing to operate in environments still often dominated by volume-based models. Still, there are many other unknowns that may emerge. The big continue to get bigger as M&A activity continues, and we see more and more interesting partnerships emerging that will change the healthcare landscape, such as CVS' acquisition of Aetna and, as mentioned above, the announcement from JPMorgan Chase, Berkshire Hathaway and Amazon that they will kill off the "health care tapeworm."

Also, let's not forget the power of other disruptors and innovation. All of those fitness trackers and wired home devices can be better integrated into care plans, member incentives, cost sharing for health systems interested in innovative coverage of their own employees, and partnerships with other employers. From advancements in precision medicine and the continued growth of retail clinics to new technology like 3D printers, health care can expect shake-ups this year and in the years ahead. Successful health care organizations will take into account all of these trends and considerations (and more) as they continue to work to transform their organizations.

Allen Miller is CEO, COPE Health Solutions, a national consulting firm that focuses on all aspects of strategy, population health management, CMS demonstrations, DSRIP and workforce development for clients across the health care continuum. For more information on how to successfully move to risk and optimize value-based models, please contact Allen Miller at amiller@copehealthsolutions.com or (213) 259-0245.