Loyale Healthcare, a Leading Healthcare Financial Company Explores Healthcare in America: Which Model is Best for Delivering Quality, Affordable Patient Care
Across
In
Historically, the economics behind the American healthcare industry have wrongly incentivized volume-based fees-for-service over value-based care delivery at a mounting cost to the American economy, costs that affect every stakeholder. Consequently, payers, providers and patients are all looking at new models to achieve high quality health services at "reasonable costs."
Incremental adjustments to the
A Comparison of Healthcare Financial and Delivery Models
Multi-Payer System - The American Model
In addition to private health insurance, nearly 26% of the
According to the Kaiser Family Foundation's survey of employer health benefits, health insurance premiums have been rising faster than wages. Between 2012 and 2017, workers' earnings grew by 12 percent, while premiums went up by 19 percent. Between 2007 and 2012, premiums increased twice as fast as workers' earnings.
Former Apple CEO
Single Payer - Government Sponsored Systems
A single-payer system is a single public system that covers the costs of essential healthcare for all residents. It is this characteristic that distinguishes most of the industrialized world's systems from
Single-payer systems (also referred to as socialized medicine) may contract for healthcare services from private organizations (
In any of these three models, healthcare providers and consumers deal with a single, governmental payer, which may own and operate its own healthcare delivery system, or may engage with private healthcare providers and payers with powerful government oversight. In each instance, universal coverage is assured with costs and care delivery closely managed by the government entity charged with the system's administration. The programs are funded either by taxes (Beveridge), Employer/Employee private insurance (Bismarck) or Government run insurance (
The lower costs and universal coverage provided by many single payer systems have led to successful employer-sponsored experiments here in the
Privately funded, multi-payer systems: Managed Care – an Integrated Delivery System (IDS)
An Integrated Delivery System (IDS) is a health system with a goal of logical integration of the delivery of health care rather than a fragmented system or a disorganized lack of system. The term has sometimes been used in a broad sense with reference to Managed Care in general (as opposed to fee-for-service care), but in
One of the most successful of the Managed Care systems in
In 1942, 20,000
Today, other efficient integrated healthcare systems generally are found in large multi-specialty medical group practices with transparent links to hospitals, labs and pharmacies. These organizations provide complete care--from the doctor's office to the hospital to home care, and everything in between. They often have their own insurance arms and work under contracts in which they agree to deliver comprehensive medical services to consumers for a fixed-dollar amount.
The relative success of a Managed Care model evolves around two propositions:
1. The system has moved from a linear structure to a closed-loop model. In traditional models, care and costs associated with equipment, services, and software are considered as separate, isolated events at every step in each patient's journey. In the Managed Care model, there is full transparency providing visibility to the all players in the continuum of care.
2. Partners share risk (and reward) for outcomes. This is a particularly critical component as our healthcare market shifts from a volume- to value-based model. In the most innovative business models, risk (financial, clinical or operational) is appropriately distributed to each partner to ensure a shared focus and contribution to the joint goals of the partners.
Strategies to mimic the Managed Care Model in Traditional Care Delivery Environments
Due to the success of Kaiser's and other Managed Care models, many hospitals and health systems are making merger and acquisition moves to implement value-based care, manage costs and sustain profitability. It's easy to see why. According to a 2016 HFMA report, "The transition from volume to value and the corresponding move to population health management require major capital investments and sophisticated management expertise of the sort that may prompt even the most independent-minded hospitals and health systems to consider their consolidation options."
The Managed Care model has recently accelerated in growth as the result of the dramatic increase of mergers and acquisitions across industry verticals. Payers (insurance companies) have entered the provider (hospital business) and drug store companies have acquired payers.
These companies are moving into an industry where the lines between traditionally distinct areas, such as pharmacies, insurers and providers, are increasingly blurry.
An Evolving Fourth Model
During the last two years, a new model has emerged, the result of employers tackling the problem of healthcare accessibility and cost. Employers are using their considerable purchasing power to influence provider and health plan behavior and discovering new means to control healthcare costs. If implemented, these initiatives would help inaugurate the transformation critical to the industry's financial survival.
Many large employers are now negotiating payments to providers based on the value of the services provided. They're also offering incentives and information for consumers to allow them to choose high value providers thereby aligning private purchaser actions with public purchasers'. Leveraging their market and cultural influence, these employers are, in effect, applying the same economic pressures wielded by government payers in single-payer and our own Medicare/Medicaid systems.
Recently three corporate behemoths -- Amazon,
Will more companies adopt an Amazon -
Does the Model Really Matter?
Essentially, this is a question without an answer. Each model has its benefits and costs. Single payer proponents will argue that
Whatever the model, payers, providers and patients can work together to build a better "mousetrap" by focusing on several key objectives and solutions:
Patient Level Initiatives:
- Simplify and standardize health care administration, such as codes and billing, across health care industries.
- Offer incentives for processes that improve patient care such as electronic health records.
- Streamline the Patient Registration Process.
- Together with the patient, create a Custom Patient Financial Plan.
- Incorporate Estimated Patient Share financial tools into the patient financial management process.
- Incorporate a Patient Financial Assessment into the registration process.
- Incorporate Estimated Patient Share financial tools into the patient financial management process.
- Consolidate and democratize patient medical and financial information
- Ensure that information technology enables self-management by improving patients' access to personal health information.
Provider and Payer Level Initiatives:
- Implement comparative effectiveness studies for treatment practices.
- Develop a national initiative to reduce preventable hospital admissions and readmissions.
- Expand hospice through support to community-based programs.
- Reduce relative values for services undergoing high rates of growth in volume.
- Promote bundled payment covering all providers for acute episodes of care and post-acute care.
- Fund research to identify key elements of effective self-management programs.
- Support self-management through benefit design such as using financial incentives for patients to encourage the use of care that is proven to be effective and discourage care that has less evidence of success.
- Support self-management through provider incentives, linking payments to increases in patient activation.
- Ensure that information technology enables self-management by improving patients' access to personal health information.
- Promote provider support for patient-centered care.
Organizations are seeking new capabilities for a value-based, consumer-oriented health system. These capabilities include data analytics and care coordination across the healthcare continuum. Whatever the model or initiative, the patient must remain at the center of the discussion. Quality service at a reasonable cost is achievable under any model if we can move healthcare out of the political discourse and begin to change the adversarial arena of the participants to one of mutual benefit and cooperation.
About
Loyale Patient Financial Manager™ is a comprehensive patient financial engagement technology platform leveraging a suite of configurable solution components including predictive analytics, intelligent workflows, multiple patient financing vehicles, communications, payments, portals and other key capabilities.
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