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One Thing CFOs Are Not Worried About, And One They Are

Analysis  |  By Marie DeFreitas  
   July 08, 2024

Value-based care looks promising, some market disruptors not so much.


At the HFMA conference this year CFOs dove into some of their top concerns and gave insight on areas where they are less concerned. Value-based care is a term that’s been thrown around healthcare for a while, with some health systems being more concerned about implementing this model than others. CFOs assured attendees at HFMA that a value-based care model is important, but that doesn’t mean it's easy.

Value-Based Care, Not For The Faint Of Heart

Value-based care is a sector it seems every CFO hopes to become more involved in. Michael Allen, chief financial officer at OSF Healthcare System spoke about their organization’s costs climbing up 15% over two years, and how they had trouble dealing with this, citing data access challenges in the mix as well. He also spoke about their struggles finding the right payer partners to create an incentive system that is transparent, and also incentivizes both parties to win together.

“It’s hard if you can’t get a transparent partner,” said Michael Allen.

Damschroder stated that health systems looking to shift to value based care must be ready to weather the storm, and examine the cost to scale.

“You can’t be in it for a year or two and think you’re going to turn it around,” he said.

Health systems should examine any and all options to stay on top of the national payers, including joint ventures to expand areas of care.

“I’d say it’s the least transparent place where commercial insurers are,” Damschroder said.

Are Disruptors Actually Disrupting?

Next, the discussion turned to CFO’s perception of market disruptors like Walmart and Amazon. Despite their moniker, there doesn’t seem to be much cause for concern.

While companies like Walmart and Amazon have the chance to disrupt and destabilize parts of the healthcare sector, they don’t seem to be in it for the long haul.

“Primary care economics don’t work on their own. You have to either be connected on the payer’s side in a value-base play, or you have to be able to make some money off it in another way,” Allen said.

“That’s why none of these are working. The private equity play into medical groups isn’t working.”

Damschroder emphasized that these companies are only in the business to make money, adding “When the risk gets too big, there’s not the same responsibility.”

Cook brought up her organization’s effort to push an on-demand virtual care visit option to offset Amazon’s offering and how it wasn’t received well, citing very low visits.

Marie DeFreitas is the finance editor for HealthLeaders.


A value-based care model won’t happen overnight

Transparency will be key in implementing VBC

Market disruptors like Walmart and Amazon do not currently pose much of a threat

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