ull-risk models, not shared savings, let health systems deliver what patients really need Better health usually isn’t th
Posted: Thu Apr 28, 2022 2:29 pm
ull-risk models, not shared savings, let health systems deliver
what patients really need Better health usually isn’t the result of
higher-quality health care. Factors outside the current health care
system, social determinants like income, education, employment,
food security, housing, and social inclusion, generally make a
bigger difference — especially in disadvantaged communities. We
need to rethink how health care organisations can help their
patients stay healthy and out of the hospital by addressing these
essential factors. What’s needed is a full-risk model, one that
holds provider organisations fully accountable for the health
outcomes of their patients. In this model, practices are paid a fee
for each patient and then cover all the costs of caring for that
patient, whether it’s an emergency department visit, a
hospitalisation, a surgery, a medication, or a stay in a skilled
nursing facility. Only with this degree of accountability can
provider organisations be fully aligned with the interests of their
patients and invest in what they truly need. A full-risk model is
daunting for most organisations. Alternatives have emerged to
pursue value-based care without taking that plunge, though my
colleagues and I believe that full risk is the most direct path to
achieving high-quality care at a low cost while also creating
incentives to invest in the services that patients need. Shared
savings: the middle ground isn’t enough The shared-savings model
for health care is, at first glance, an appealing financial choice
that lets providers progress towards value-based care. In this
model, a payer gives a provider organisation a fixed budget to care
for a group of patients. If the cost of the care provided comes in
under budget, the provider shares the savings with the payer. There
is, however, no penalty for failing to generate savings. Without
this disincentive, a provider organisation faces no real pressure
to innovate. Shared-savings models are often considered a good
first step towards value-based care, as they appear to be the
less-risky option for providers: There’s a chance to win without
risk of loss. But it isn’t enough. While well-intentioned,
shared-savings models have not consistently delivered lower costs.
Results from the most common shared savings model for accountable
care organisations, the Medicare Shared Savings Program (MSSP), are
mixed at best. In its first year, accountable care organisations
participating in MSSP experienced 1.4 percent savings; the next
cohort experienced no significant savings. With so much promise,
why have the results of shared-savings models been lackluster? It’s
simple: In a shared-savings model, providers who are able to lower
the cost of care create savings they must then share with the
payer. That means the provider makes the full investment and does
all the work, but doesn’t get the full benefit. While a
shared-savings model may feel less risky, it also reduces the
incentive for innovation and investment in patient care. Consider a
hypothetical program that provides low-income patients with
subsidised transportation to their primary care appointments. This
service could prevent waste by improving access and reducing the
number of missed appointments, which in turn would decrease the
number of costly hospitalisations. If this program reduced costs,
under a shared-savings model the provider would have to turn over
some of the savings to its payer partner. Such sharing, however,
could mean that the return doesn’t cover the payer’s investment in
the program. So while the program helps patients and saves money,
the financial arrangement may prevent the provider from building
this obviously advantageous program. A full-risk organisation, in
contrast, has a strong incentive to invest in patient
transportation services, since every dollar the provider saves is a
dollar it earns — and keeps. While a shared-savings model may seem
like a conservative approach to value-based care, it doesn’t
deliver the same results as a full-risk model, either in theory or
in practice. Health care providers should thrive only if their
patients thrive. Otherwise, the health care system is rewarded for
expense, including waste, that doesn’t help patients. And without
full accountability, organisations invest in what is billable, not
what is necessary for patients. Innovators must take the plunge and
adopt full-risk models rather than half measures. Doing so is less
risky in the long run. Let health care providers capture the value
they create We need health care models that encourage provider
organisations to invest in what they know is needed by the
communities they serve. It’s time to transition from “primary care
practices” to “social determinants practices” — delivery
organisations that acknowledge the importance of these factors in
creating better health outcomes. Here’s an example from Oak Street
Health, a full-risk network of 40 primary care centers focused on
older adults in medically underserved communities that I co-founded
in 2012. At age 67, Ike (not his real name) was turned away from a
homeless shelter one cold Chicago afternoon because of a cough.
(Ike also had a history of substance abuse, depression, and housing
insecurity.) The shelter’s staff members feared he would spread his
cold to other residents and told him he couldn’t stay without a
physician’s note explaining that he was receiving treatment and was
not contagious. Ike fully expected to spend the frigid night
outside, or in an emergency department. Fortunately, he called his
care team at Oak Street Health, which he had met during the team’s
visit to his shelter months earlier. Given the freedom and
accountability of a fully value-based health care organisation, we
provided Ike with transportation to one of our health centers, made
sure he was seen by a clinician, got him the prescription he needed
for his cough, documented his plan, and transported him back to the
shelter in time for the evening meal. By investing in care that
addressed several social determinants — Ike’s need for
transportation, appropriate and timely medical attention,
assistance getting medication from our pharmacy, and the like — we
were able to avoid a costly emergency department stay or an even
costlier hospital visit down the line. In other words, value-based
care allowed us to do what was best for Ike and ultimately what was
best for the organisation. It’s true that the transition to a
full-risk, value-based model of health care is difficult. But the
status quo, in which patients suffer under a health care system
that can’t properly serve them, is intolerable. Full-risk,
value-based systems may not be the best fit for every doctor or
health system, but it’s good for patients, and thus must be our
goal — as taxpayers, as clinicians, and as humans. For all of us
who experience first-hand the daily impact of this kind of
accountability on the patients we serve, we share an urgency that
isn’t going away soon. Myers, G. (2019) Full-risk models, not
shared savings, let health systems deliver what patients really
need [online]. Available from:
https://www.statnews.com/2019/03/26/ful ... ient-care/
[Accessed on: 30 November 2021]. Answer ALL the questions in this
section. Question 1 (25 Marks) The case study argues two
fundamental business models for the health care sector. The first
one is a shared savings model where the Health Care Provider (HCP)
shares the risks as well as the profits with the payer. The second
model is the fullrisk model where the health care provider owns all
the risks as well as the profits. The latter approach should then
have a holistic approach to the payer’s health. These business
models are both risk-based and therefore are subject to the same
rules. Using the appropriate standard, summarise the risk
management process that the Health Care Providers should follow to
operate? Question 2 (25 Marks) One of the key aspects of the Risk
Management Process which the HCPs should be using as an essential
tool is risk modeling. It can be argued that for the sustainability
of the HCPs a comprehensive understanding of the fundamentals of
risk modeling is critical. Using appropriate diagrams, propose a
risk model showing all the relevant inputs and outputs for this
risk model that the HCPs should use? Question 3 (25 Marks) The case
study argues that the shared-savings model is not that successful
and proposes that the full risk model may be the way forward. This
is a decision that each HCP should consider, and this is where risk
modeling can provide guidance as the previous questions showed.
However, every risk model needs the output from the qualitative
risk assessment which is a risk register. Propose and compile a
risk register identifying at least 5 potential risks that may be
applicable to the HCP decision-making process. The risk register
needs to clearly show the risk identifier, risk category, risk
description, risk cause and risk impact. Students must describe and
discuss each of the risks properly and how they impact the
business. Students will need to conduct research using external
sources to justify the proposed risks identified. Question 4 One of
the main requirements for a risk model is the risk aggregation
process. Using the risk register you compiled in the previous
section, estimate the probability and impact in terms of numerical
values. Evaluate the average impact of the risks you identified
using the aggregation of static values approach. (10 marks)
Tabulate your response. 4.1 4.2 Risk Driven Occurences Using the
table compiled in question 3, assess which of the risks identified
should be considered (occurrence) and provide a range for the
impact of the individual risks. The range should include a minimum,
most likely and maximum value for each risk. 4.2.1 (5 marks) Based
on the risks identified and data set defined above, calculate a
possible total risk impact for the project using the risk
aggregation of risk-driven occurrences approach 4.2.2 (5 marks)
Discuss what the value means for the case study using an
appropriate a typical diagram showing the end result of a
simulation model for the ranges provided
what patients really need Better health usually isn’t the result of
higher-quality health care. Factors outside the current health care
system, social determinants like income, education, employment,
food security, housing, and social inclusion, generally make a
bigger difference — especially in disadvantaged communities. We
need to rethink how health care organisations can help their
patients stay healthy and out of the hospital by addressing these
essential factors. What’s needed is a full-risk model, one that
holds provider organisations fully accountable for the health
outcomes of their patients. In this model, practices are paid a fee
for each patient and then cover all the costs of caring for that
patient, whether it’s an emergency department visit, a
hospitalisation, a surgery, a medication, or a stay in a skilled
nursing facility. Only with this degree of accountability can
provider organisations be fully aligned with the interests of their
patients and invest in what they truly need. A full-risk model is
daunting for most organisations. Alternatives have emerged to
pursue value-based care without taking that plunge, though my
colleagues and I believe that full risk is the most direct path to
achieving high-quality care at a low cost while also creating
incentives to invest in the services that patients need. Shared
savings: the middle ground isn’t enough The shared-savings model
for health care is, at first glance, an appealing financial choice
that lets providers progress towards value-based care. In this
model, a payer gives a provider organisation a fixed budget to care
for a group of patients. If the cost of the care provided comes in
under budget, the provider shares the savings with the payer. There
is, however, no penalty for failing to generate savings. Without
this disincentive, a provider organisation faces no real pressure
to innovate. Shared-savings models are often considered a good
first step towards value-based care, as they appear to be the
less-risky option for providers: There’s a chance to win without
risk of loss. But it isn’t enough. While well-intentioned,
shared-savings models have not consistently delivered lower costs.
Results from the most common shared savings model for accountable
care organisations, the Medicare Shared Savings Program (MSSP), are
mixed at best. In its first year, accountable care organisations
participating in MSSP experienced 1.4 percent savings; the next
cohort experienced no significant savings. With so much promise,
why have the results of shared-savings models been lackluster? It’s
simple: In a shared-savings model, providers who are able to lower
the cost of care create savings they must then share with the
payer. That means the provider makes the full investment and does
all the work, but doesn’t get the full benefit. While a
shared-savings model may feel less risky, it also reduces the
incentive for innovation and investment in patient care. Consider a
hypothetical program that provides low-income patients with
subsidised transportation to their primary care appointments. This
service could prevent waste by improving access and reducing the
number of missed appointments, which in turn would decrease the
number of costly hospitalisations. If this program reduced costs,
under a shared-savings model the provider would have to turn over
some of the savings to its payer partner. Such sharing, however,
could mean that the return doesn’t cover the payer’s investment in
the program. So while the program helps patients and saves money,
the financial arrangement may prevent the provider from building
this obviously advantageous program. A full-risk organisation, in
contrast, has a strong incentive to invest in patient
transportation services, since every dollar the provider saves is a
dollar it earns — and keeps. While a shared-savings model may seem
like a conservative approach to value-based care, it doesn’t
deliver the same results as a full-risk model, either in theory or
in practice. Health care providers should thrive only if their
patients thrive. Otherwise, the health care system is rewarded for
expense, including waste, that doesn’t help patients. And without
full accountability, organisations invest in what is billable, not
what is necessary for patients. Innovators must take the plunge and
adopt full-risk models rather than half measures. Doing so is less
risky in the long run. Let health care providers capture the value
they create We need health care models that encourage provider
organisations to invest in what they know is needed by the
communities they serve. It’s time to transition from “primary care
practices” to “social determinants practices” — delivery
organisations that acknowledge the importance of these factors in
creating better health outcomes. Here’s an example from Oak Street
Health, a full-risk network of 40 primary care centers focused on
older adults in medically underserved communities that I co-founded
in 2012. At age 67, Ike (not his real name) was turned away from a
homeless shelter one cold Chicago afternoon because of a cough.
(Ike also had a history of substance abuse, depression, and housing
insecurity.) The shelter’s staff members feared he would spread his
cold to other residents and told him he couldn’t stay without a
physician’s note explaining that he was receiving treatment and was
not contagious. Ike fully expected to spend the frigid night
outside, or in an emergency department. Fortunately, he called his
care team at Oak Street Health, which he had met during the team’s
visit to his shelter months earlier. Given the freedom and
accountability of a fully value-based health care organisation, we
provided Ike with transportation to one of our health centers, made
sure he was seen by a clinician, got him the prescription he needed
for his cough, documented his plan, and transported him back to the
shelter in time for the evening meal. By investing in care that
addressed several social determinants — Ike’s need for
transportation, appropriate and timely medical attention,
assistance getting medication from our pharmacy, and the like — we
were able to avoid a costly emergency department stay or an even
costlier hospital visit down the line. In other words, value-based
care allowed us to do what was best for Ike and ultimately what was
best for the organisation. It’s true that the transition to a
full-risk, value-based model of health care is difficult. But the
status quo, in which patients suffer under a health care system
that can’t properly serve them, is intolerable. Full-risk,
value-based systems may not be the best fit for every doctor or
health system, but it’s good for patients, and thus must be our
goal — as taxpayers, as clinicians, and as humans. For all of us
who experience first-hand the daily impact of this kind of
accountability on the patients we serve, we share an urgency that
isn’t going away soon. Myers, G. (2019) Full-risk models, not
shared savings, let health systems deliver what patients really
need [online]. Available from:
https://www.statnews.com/2019/03/26/ful ... ient-care/
[Accessed on: 30 November 2021]. Answer ALL the questions in this
section. Question 1 (25 Marks) The case study argues two
fundamental business models for the health care sector. The first
one is a shared savings model where the Health Care Provider (HCP)
shares the risks as well as the profits with the payer. The second
model is the fullrisk model where the health care provider owns all
the risks as well as the profits. The latter approach should then
have a holistic approach to the payer’s health. These business
models are both risk-based and therefore are subject to the same
rules. Using the appropriate standard, summarise the risk
management process that the Health Care Providers should follow to
operate? Question 2 (25 Marks) One of the key aspects of the Risk
Management Process which the HCPs should be using as an essential
tool is risk modeling. It can be argued that for the sustainability
of the HCPs a comprehensive understanding of the fundamentals of
risk modeling is critical. Using appropriate diagrams, propose a
risk model showing all the relevant inputs and outputs for this
risk model that the HCPs should use? Question 3 (25 Marks) The case
study argues that the shared-savings model is not that successful
and proposes that the full risk model may be the way forward. This
is a decision that each HCP should consider, and this is where risk
modeling can provide guidance as the previous questions showed.
However, every risk model needs the output from the qualitative
risk assessment which is a risk register. Propose and compile a
risk register identifying at least 5 potential risks that may be
applicable to the HCP decision-making process. The risk register
needs to clearly show the risk identifier, risk category, risk
description, risk cause and risk impact. Students must describe and
discuss each of the risks properly and how they impact the
business. Students will need to conduct research using external
sources to justify the proposed risks identified. Question 4 One of
the main requirements for a risk model is the risk aggregation
process. Using the risk register you compiled in the previous
section, estimate the probability and impact in terms of numerical
values. Evaluate the average impact of the risks you identified
using the aggregation of static values approach. (10 marks)
Tabulate your response. 4.1 4.2 Risk Driven Occurences Using the
table compiled in question 3, assess which of the risks identified
should be considered (occurrence) and provide a range for the
impact of the individual risks. The range should include a minimum,
most likely and maximum value for each risk. 4.2.1 (5 marks) Based
on the risks identified and data set defined above, calculate a
possible total risk impact for the project using the risk
aggregation of risk-driven occurrences approach 4.2.2 (5 marks)
Discuss what the value means for the case study using an
appropriate a typical diagram showing the end result of a
simulation model for the ranges provided