LUMINA Insights Blog

Hospitals and health systems across the country are reexamining their clinical service line strategies and operations in response to the shift from volume to value. In addition to population-based and episode-based payment reforms initiated by public and private payers, providers are challenged by mergers and acquisitions, clinical integration, consumerism and price transparency. Strengthening clinical service line strategies and capabilities are critical approaches to addressing these many challenges.

This post is the second in a four-part series where we introduce the pillars of success for clinical service lines: Governance and Leadership, Clinical Integration, Clinical Transformation, and Analytics and Innovation.

Hospitals and health systems across the country are reexamining their clinical service line strategies and operations in response to the shift from volume to value. In addition to population-based and episode-based payment reforms initiated by public and private payers, providers are challenged by mergers and acquisitions, clinical integration, consumerism and price transparency. Strengthening clinical service line strategies and capabilities are critical approaches to addressing these many challenges.

This post is the first in a four-part series where we introduce the pillars of success for clinical service lines: Governance and Leadership, Clinical Integration, Clinical Transformation, and Analytics and Innovation.

Facing growing pressure from insurers to assume more financial risk, healthcare providers are exploring ways to better manage cost and utilization through risk-based contracts.

Unfortunately, most organizations tend to focus more on the contract itself and fail to give adequate attention to planning out what they will do once the agreement is signed.

Effective contract negotiation and execution depend on the same set of capabilities. To succeed in risk-based contracting, providers need to build an infrastructure that supports every dimension of risk management—from risk modeling and contract design to population health strategy.

Here are four elements that will be instrumental to building this infrastructure.

Now is the time for healthcare organizations to take the next step in elevating quality while reducing the cost of care. This will involve creating service line structures designed to function in the developing environment of value-based payments. In contrast, the original purpose for most health systems was to more tightly tie specialists to each other and to health system programs, not necessarily to improve the patient experience and outcomes.

On Sept. 20, I had the honor of presenting to a standing-room-only crowd at Becker’s Hospital Review 4th Annual Health IT + Revenue Cycle Conference in Chicago. I spoke about how clinical and finance leaders need a data-driven value model to plan the scale and pace of investments into a population health strategy and to move confidently into value-based contracting.

Most healthcare leaders understand the importance of population health and building the most optimal strategy to position their organizations for success in value-based care. Building the tools to manage patient populations is key to improving outcomes while bending the cost curve in American healthcare.

Recently, several clients who are working to improve value-based contracts have asked, “How do we better engage specialists in the reduction of total cost of care and improve access and outcomes for our members?” Nationally, the total cost of care increased 4.3 percent in 2016, and, according to CMS, is expected to increase at a rate of 5.5 percent from 2017 to 2026, leading to a steady increase in the percentage of healthcare spending compared to the gross national product.

This spending includes more than 30 percent hospital costs, 20 percent physician and clinical services, and 10 percent pharmaceuticals. Several studies that compare specialists with primary care physicians suggest that revenue generated within the surgical specialties far surpasses all the rest. Clearly, engaging specialists in developing and implementing reduction in total cost of care is imperative.

Nearly every aspect of the healthcare world is changing―constantly, unpredictably, and quickly. As stakeholders navigate their various paths, knowing what to expect can help with decision making about compliance, risk, cost, and more. We have identified 7 areas that healthcare leaders must navigate to stay ahead of change and remain agile, effective, and profitable.

Hospitals, health systems, and physician practices must find ways to adapt to the quickly changing market forces around them. Sources of change include value-based contracting, provider competition, consumerism, changes in government and commercial payment models, health system regionalization, government regulation, and technological innovation.

Health systems and physicians increasingly are finding it in their best interests to affiliate with one another in new ways, but how they collaborate depends on specific forces in their market. Some markets have larger populations and more significant provider competition than others. Some are more likely to have health plans that want to implement value-based payment models.

Through the continued journey of transitioning to a high-value, person-centric care model from a high-volume, process-centric care model, providers are forced to view care delivery through a new lens. As organizations consider digitization of their service offerings, having an effective analytics framework that produces actionable insights becomes imperative.

The need for actionable information continues to be a key strategic and operational gap for leaders of most healthcare organizations, and it presents challenges as they transition into value-based care. Provider organizations, particularly large, complicated health systems, have incredible amounts of data spread across disparate systems that do not easily communicate with one another.

Healthcare industry veterans Daniel Marino and Lucy Zielinski have co-founded Lumina Health Partners, a Chicago-based consulting firm that offers business advisory and leadership solutions to healthcare organizations.

The firm’s experienced team of consultants works hand-in-hand with clients to develop transformative results for the most difficult value-based strategy, digital innovation and analytics, clinical transformation, and leadership and governance challenges. Using a “lead to support” approach, the firm’s consultants create and activate strategies and plans that enable medical groups, hospitals, and health systems to realize measurable strategic, financial, clinical, and operational goals.