David B. Snow, Jr. is chairman and CEO of Cedar Gate Technologies.
Healthcare reform has been on Americans' minds for decades—especially as healthcare costs outpace average incomes, and the burden of paying for care falls on U.S. employers and consumers.
Our fee-for-service (FFS) model dates back to the 1930s. It was perpetuated by Centers for Medicare and Medicaid Services (CMS) calculations in the 1980s that deemphasized preventive and primary care in reimbursem*nts and instead rewarded costly and complex procedures. These misaligned incentives created a system that is good at taking care of sick people, but not good at preventing sickness or promoting health.
What We Are Getting Right
Fortunately, we are making progress. Value-based care (VBC), which aligns incentives with activities that improve overall health, is gaining traction. CMS set a goal of getting every Medicare beneficiary in an accountable care relationship by 2030. In 2022, almost 60% of payments were tied to value and quality. Additional signs of progress include:
• Stakeholders embracing analytics and care management technology that uncovers insights for actionable care steps
• Critical shifts in care delivery to focus on prevention and population health
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• Payers and providers collaborating to enhance member health
• Self-funded employers contracting with providers on prospective bundled payments that lower costs and improve outcomes
• Educated healthcare consumers who make smart decisions about their care
All of these point to a fundamental shift in mindset across every delivery touch point. But they are only the beginning of the road to fixing healthcare.
We Can Still Improve
Fixing a U.S. healthcare system operating on misaligned incentives takes time. In 2022, 40% of payments were still entirely fee-for-service (no link to quality or value), while only 9.6% were entirely population-based (no FFS component).
Most non-Medicare patients get their insurance from employers. But many employers still don’t fully understand their role in a VBC future or the tools at their disposal to incentivize lower costs and better quality.
Technology can also be a barrier, with many organizations relying on multiple point solutions, legacy software designed for an FFS world or both. Most of this tech is not equipped for seamless data sharing, outcomes-oriented care and alternative payment models necessary for VBC.
What A Better Healthcare Future Looks Like
At the heart of a successful healthcare future lies advanced technology that aligns incentives with outcomes. Unlike past attempts to push VBC forward, the tools we have available today support the play. If we focus on the right things in the coming decades, I believe VBC will succeed.
Seamless Data Access And Integration
VBC works when healthcare stakeholders have access to clean, enriched data that informs decision making throughout a patient’s health journey. We have the data, but our siloed approach and the patchwork of point solutions that comprise most healthcare technology ecosystems make it difficult for even well-intentioned organizations to maximize data.
Advanced data management solutions bring together disparate information from multiple sources, normalizing it into a single data lake and stitching it directly to a member, so it follows them wherever they go. That technology is available now.
In the coming years, organizations should prioritize integrating point solutions into a single, end-to-end platform that translates insights into actionable care steps, processes payments in alternative care models (prospective bundles and capitation) and shares data securely with collaborative care partners.
Personalized Care Centered Around A Patient
Value-based care forces our healthcare system to be truly patient-centric, with incentives that drive proactive steps to keep people healthy. Organizations have access to an unprecedented volume of information about members, presenting incredible opportunities to personalize care. The technology exists today—and will continue to progress over the coming decades—to harness information toward improving health outcomes.
Additionally, as the power of AI evolves, the opportunities to center care around each patient multiply. AI can predict the likelihood that someone will develop a chronic condition within a year—such as diabetes or heart disease—with high accuracy. Other predictive models encourage actions that improve short- and long-term health, such as cancer screenings or flu shots.
When this information is available in an integrated platform that facilitates real-time data sharing, it can improve point-of-care interactions. Clinical decision support tools with bidirectional information exchange between EHR and analytics help providers anticipate and address patients' needs. When that software incorporates social determinants of health and other data, care teams can identify gaps and look for creative solutions that improve access and quality.
When we take advantage of these incredible technologies and truly put patients at the center of their health journey, VBC succeeds.
Collaborative Approach To Care
Our healthcare system works best when everyone collaborates to optimize outcomes. Effective cooperation can also reduce healthcare costs by removing redundancies and improving efficiencies. When organizations commit to value-based care, they commit to sharing data, working together to improve population health and increasing transparency to build trust.
As we move down the path of VBC, technology provides the tools for providers to confidently model and enter into risk-based contracts with payers. They have data outlining how they can affect patient outcomes and how to align financial incentives with optimal care.
Technology also provides tools to safeguard proprietary information in a highly regulated and competitive industry. Information sharing can be seamless, without giving away critical access to data that should be protected.
Leveraging AI And Other Advancements
As generative AI proliferates, we must be open to all the possibilities for how it can reform the healthcare system. Automation can reduce administrative burdens and alleviate workforce strains without sacrificing care quality. Technology becomes a trusted partner in finding innovative ways to address significant gaps in care and access. Predictive models can highlight risk for earlier intervention and preventive care.
The Possibility Of A Brighter Healthcare Future
While much of the news on U.S. healthcare seems bleak, there are reasons to believe that we can create a better future with the right technology, collaboration and putting patients at the center of the care journey.
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