Today, virtually all health care CFOs appreciate the need for their organization to demonstrate value.  It’s no longer as simple as chanting the mantra “volume is everything”, like many of us have for so many years.  Not only are we in a delivery cost crisis, we are in an insurance crisis. Now is the time for hospitals and physicians to integrate economically and clinically and focus on the efficacy of care. Now is the time to align economic incentives among the providers. Now is the time to figure out the economics of the transformation we are in.   We aren’t quite ready to kiss employer sponsored health care goodbye.  But most of us know we can’t ignore insurance exchanges, co-ops and consumer transparency.  The good news is we have some time to pilot innovation – but it is not unlimited.  The bad news is we must get started now as the transformation from volume to value and related cost-management takes time and effort.

Following is a quick quiz to see how your organization is progressing toward the value-based payment and care world ahead:

  • Have you defined the size and scope of your primary care network and laid out the plan to develop it?
  • Can you and your physicians demonstrate with practical, real life examples how your organization is helping to bend the cost curve and why this is good economically for them and the hospital?
  • How does Wall Street view your strategy to accept “payment risk” – is it a credit strength or negative outlook in your credit report?
  • Do we engage our members/patients with outreach and medical management programs that help mitigate population based payment risk?

Warbird Consulting Partners has partnered with Valence Health of Chicago, a leader in value-based care analytics and payment model innovation, to help address these strategic financial and operational challenges.  Lower fees for service payments and deteriorating volume is accelerating around the country. We think now is the time for carefully experimenting with new payment arrangements, risk arrangements, “bundling” and forecasting the potential impacts on your P&L. Take a look at population health and risk through a financial lens and plan your forward thinking strategies accordingly.

David Kirshner, Healthcare Director and Sr. CFO Consultant, Warbird Consulting Partners