The shift toward value-based care is swiftly realigning compensation for providers, placing a renewed emphasis on higher quality services at lower costs. At the same time, the industry is seeing trilateral movement from hospital-created health exchanges, employers and insurers toward narrower networks in order to maximize reimbursements and reduce costs.1 As these dynamics continue to evolve, hospitals and oncologists cannot rely on a business-as-usual approach to strategic planning. At Oncology Solutions, our value-based planning takes a novel approach to the traditional environmental assessment by focusing real-time attention on:
- Referring physician market dynamics via hospital-captive provider networks and balance of external independent physician profiles;
- Government reimbursement via alternative payment models;
- National, regional and local commercial payer reimbursement strategies;
- Deep-dive onco-analysis to identify cost savings opportunities across the care continuum with focus on ED visits, readmissions, end-of-life care planning, etc.; and
- Hospitals’ and oncologists’ IT adoption and maturity.
There are several reasons why value-based oncology strategic planning is vital to your institution:
1) The U.S. Department of Health & Human Services (HHS) has set a goal of tying 30 percent of traditional, fee-for-service, Medicare payments to quality or value through alternative payment models, such as Accountable Care Organizations (ACOs) or bundled agreements, by the end of 2016, 50 percent by 2018. Additionally, HHS has set a goal of tying 85 percent of all Medicare payments to quality or value by 2016, 90 percent by 2018, through programs such as the Hospital Value-Based Purchasing and/or the Hospital Readmissions Reduction Program. This is the first time in the history of the Medicare program that HHS has set explicit goals for alternative payment models and value-based payments.2
2) Population growth and increased aging will drive an exponential increase of newly diagnosed cancer cases and cancer survivors. As 70 percent of cancer patients will be on Medicare by 2030, hospitals must factor in an increase in their Medicare populations and a representative decline of commercial patient mix.
3) The 2016 implementation of CMS’ Oncology Care Model (OCM) further signals the adoption of value-based cancer care reimbursement. In brief, under the OCM, practices will enter into payment arrangements that include financial and performance accountability for episodes of care surrounding chemotherapy administration to cancer patients.3
4) There is a shift in the compensation structure which reimburses not only for productivity, but also for quality and cost of care. This hybrid compensation model incentivizes cancer programs to reduce the total cost of care; it also encourages physicians eligible to participate in oncology service line co-management arrangements to streamline inpatient and outpatient cancer care in order to create cost savings opportunities.
5) Health care is entering a world of “YELP” ratings at the consumer level, driving patient-directed consumer preference for specific providers. Patients are more aware of, and more sensitive to, health care quality and direct-to-consumer costs and are factoring these considerations when determining where they should seek care. To succeed in this evolving consumer-driven environment, health systems and oncologists must appeal to value-driven purchasers. Documenting current ratings compared to national standards and level of price/cost transparency can work in your favor by motivating ongoing quality and process improvement and translating these efforts into exceptional results for patients.
Value-based strategic planning is essential for setting your goals and implementation plan within the 2020 oncology eco-system. As preliminary results emerge from oncology risk-based payment pilots, it is clear that realigning incentives to achieve “value” in cancer care is of greatest importance in an often fragmented care delivery system. To be proactive for your organization, please call us today at 404.836.2000 or email us at [email protected] to learn more about how we can assist you with valued-based strategic planning.