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Making Total Cost of Care Contracting Work

By Philip Betbeze  
   December 03, 2015

Much of the failure of capitation back then stemmed from a lack of transparency around the cost of care, he says. HCSC has learned that lesson, he insists.

"Now, we provide them with not only the data but also help in translating that data into actionable information and the tools they need to succeed in these models."

It's one thing to identify the patient population for which providers are accountable, but it's at least as important to help providers understand the interventions they need to make, says Hamman. That means providing them with analytics, care management techniques, and outreach to the highest-risk patients.

To help ensure success for both sides under capitation, HCSC takes on the role of provider education, Hamman says, adding that the biggest impact of the cost of care is and will remain the physician's pen. Where they refer and, more important, understanding the cost and quality impact of those referrals is at least as much the insurer's responsibility as the provider's. Radiology, lab, and other commodity-type services like colonoscopy can have a huge impact on the cost of care, Hamman says.

In most cases, they have had few problems with physicians changing where they refer based on the information on cost and quality provided by HCSC.

"That's been very encouraging," he says, especially given the aggressive time frame HCSC is pursuing in incorporating total cost of care contracting as a bigger piece of its overall book of business.

Whether it's the employer base or government programs like managed Medicaid or Medicare Advantage programs, there's very little tolerance for the trajectory healthcare costs are on today, he says.

"We need to act fairly rapidly in looking to engage with providers who are willing to reconsider how healthcare is delivered."

There will be winners and losers, Hamman says.

On one end are those who are trying to hang on to the fee-for-service infrastructure to retain as much of the revenues as they can under the old model, while some are very eager and understand the necessity to change.

"Those are who we want in our core network," he says.

Reprint HLR1115-4

Philip Betbeze is the senior leadership editor at HealthLeaders.

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