The US healthcare market is rapidly changing the way it compensates providers for medical services and this trend has significant consequences for healthcare information technology companies. In a study provided by the Health Care Payment Learning & Action Network in 2016, 29% of payments to providers used alternative payment models (APM), including shared savings and risk, bundled and population-based payments, and additional 28% of payments included pay-for-performance and care coordination bonuses on top of the legacy fee-for-service (FFS) compensation. Only 43% of 2016 payments were traditional fee-for-service plans which is a significant decline from the prior year when FFS accounted for 62% of provider payments. It is expected that APM payments will account for about 50% of the health care payment market in 2018 and traditional FFS plans will be reduced to well below 50% of the market. This dramatic and rapid shift has significant consequences for the health care information technology industry.
Revenue Cycle Management (RCM) systems used by providers are generally excellent at transaction processing and financial record keeping, but lack the ability to analyze practice, cost and efficiency trends throughout patient populations. This ability is necessary to have beneficial conversations with payers. Claim management systems have similar shortcomings and further lack a comprehensive view of the financial picture of the patient’s care. Both systems struggle to interact with the growing number of third parties, such as repricing or analytic entities that play critical roles in emerging value-based care and compensation models. In the near future, hybrids of combined RCM and claims management systems will likely emerge to improve efficiency and analytics and reduce costs. For example, a gated, network only plan (a micro-single payer) could provide a simple cloud-based platform with today’s technology for documentation and reimbursement. This solution would give the payer visibility in the care process and the provider certainty and ease of reimbursement.
In addition to converging provider/payer transaction systems, there are very powerful benefits in bringing electronic health record data into the value “conversation”. The patient’s condition and expected course are the most powerful determinants of cost. Harnessing this information in the analytic process makes value determinations possible. After all, spending nickels to save dollars still shows current costs against invisible financial benefits. Realizing these benefits will require far more integration of EHR and RCM systems as well as data analytics that bridge the clinical and financial dimensions.
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