Where Value-Based Purchasing is Still Nascent
HLM: What about going direct-to-employer with your offerings?
Schnieders: That's one of the things we're talking about, but you have to have the right legal model—a clinically integrated network. Our new partner, Alegent Creighton Health, which is also part of CHI, already has that designation, so we are moving rapidly toward establishing a chapter of that in Kearney.
We have to prove to regulators and payers that we are clinically integrated. That takes time. But at that point, you can go directly to employers and do exactly what you're suggesting. We don't have large employers, but we have lots with 200–500 employees. That's certainly something we can handle and it would give us an opportunity to pilot, experiment and gather data.
HLM: Is cost shifting (whereby hospitals subsidize money-losing services and payers with higher rates from commercial payers) viable anymore?
Schnieders: It's not entirely dead, but with the volume-based model, the dominant payer is where we would shift. If they're saying they won't do it; they're increasing utilization review, and implementing preauthorization to decrease utilization once they are in the hospital or outpatient, it certainly cuts down on the opportunity.
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