Seizing the Moment: Learning from the Pandemic to Rethink Care

Rob Cetti – President

COVID-19 has forced health care organizations to reconsider the idea of “business as usual.” The transactional, fragmented experiences that have historically defined American health care continue to present problems as the public health crisis lingers.

At the pandemic’s onset, most health care providers experienced a significant reduction in patient volume as elective and other services were suspended and patients hesitated to seek care, even for necessary treatment and diagnostic services. Since a lot of these interactions were tied to fee-for-service payments, many providers saw a dramatic drop in revenue. A recent government report from the Office of Health Policy quantifies this decline, showing that Medicare payments dropped 33% in April 2020 relative to the same period in 2019. Although payment amounts rebounded by the end of the year, the damage had already been done, and providers saw cumulative payment deficits ranging from 7% to 9%.

Although some organizations may focus on the fact that fee-for-service (FFS) rebounded, more forward-facing entities will view last year’s numbers as a call to action. Now is the time to learn from the experiences of 2020 and put clinical and financial structures in place to better navigate, weather, and even thrive during unexpected and volatile times.

Patients and doctors have changed their frequency and criteria for things as simple as a routine medical check-up. And, unfortunately some of the most fragile patients appear to be avoiding care that could positively improve or prevent decline of their health. It’s imperative that we transition to a model that embraces the needs of our most fragile patients and accelerates whole health management needs of all.

The good news is that such structures already exist in the form of value-based care (VBC) arrangements. Those organizations that were involved in more advanced VBC arrangements before the pandemic’s start were better prepared to withstand the fluctuations in payment and provide more consistent, high-quality care to patients. This is because VBC agreements, especially those with capitated payments, are designed to stabilize reimbursement and reward proactive care management, incentivizing organizations to address social determinants of health and other factors that are accelerating the rate of chronic conditions. Moreover, these arrangements often allow for faster access to supplies and greater access to technology due to economies of scale. On the whole, they enable a degree of flexibility that is simply not possible with standard FFS arrangements.

During the height of the pandemic, for example, providers that embraced VBC arrangements were more creative in how they kept their patients healthy. They rapidly launched outreach programs to connect with isolated populations and - like many organizations - spun up telehealth programs to reach those who were unable or unwilling to attend an onsite appointment. However, unlike traditional FFS, during all this outreach, they did not have to worry about transactional payments for services that were not yet approved for payment by CMS.

Even as we come out of the pandemic, the benefits are crystalizing: Having a model that engenders elasticity and offers financial stability is essential. If we have learned one thing this past year, it is that we should expect the unexpected. Having a structure that is durable yet flexible enough to withstand the unknown is paramount.

So, what’s next?

Making the move to VBC involves more than just signing up for a new payment model. Although there are commonly accepted best practices for creating and maintaining the right infrastructure, there are also unique organizational, patient population, and community characteristics that will impact a VBC strategy. Understanding these nuances is critical for success. Because of this, it can be helpful to work with a partner that has the experience, technology, and capabilities to meet you where you are and advance you along the VBC path. This kind of partnership can ensure you establish a program that enables higher care quality and stronger financial performance while giving you the flexibility to flourish amid ever-evolving times.