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Get Ready for Healthcare Conglomerates

Philip Betbeze, for HealthLeaders Media, April 14, 2011
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Eustis gives some credit to a restructured financial system from the Chicago-based revenue cycle consultancy Accretive Health for making the transition to a risk-based system of reimbursement for commercial payers, saying it’s obviously essential that many of these metrics be tracked in real time, with reminders generated to care providers so that those action can be taken to prevent potential
bad outcomes.

Ability to take on risk

Familiarity with payers’ struggles to hold down costs was critical in making this change, Eustis contends. Fairview’s willingness to take on risk came from its early discussions with Medica as well as demonstrations from Accretive that proved it could provide its clinicians better access to data upon which to make appropriate care decisions.

“Now we can stratify individual clinical risk from patients, and cost-of-care data from payers,” he says. “We’re accepting a lower rate increase than what we had traditionally done, but that requires you to have confidence that you’ll be able to deliver
the results.”

Fairview was confident it would do better financially with a contract that increased the FFS portion of the payment in the neighborhood of 2% to 3% annually as opposed to 6% to 7%, Eustis says. The process required health plans to share claims data with Fairview to help determine its standing on quality of care within the market.

“Turned out we were performing better than market already, so we had already created value,” says Eustis. The payers agreed to recognize the value of the work Fairview had already done on quality, and created a pool to reimburse more if it continued to improve.

Internally, Fairview had to build a care management system, which it did with Accretive’s help, Eustis says. “That means you follow patients through the continuum, identifying which patients are in critical need of intervention and how you intervene.”

It sounds simple, but this is not an easy thing to do, he says. Much of the disease management and care coordination work that is necessary to improve on costs has traditionally been provided through payers. But Medica’s experience in this arena helped Eustis and his team build that capability within Fairview, which now boasts of employees who act as health coaches and disease managers.

Accretive, for its part, agreed to share risk in the project by making an investment in that labor force using its own funds.

“There’s risk on their part as well,” says Eustis. “They might not recoup their investment.”

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1 comments on "Get Ready for Healthcare Conglomerates"


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