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The transition from fee-for-service to value-based care is steadily advancing, but the industry is still in the early stages of making this significant move. Rohan Kulkarni, Conduent Healthcare’s vice president of strategy and portfolio, discusses the industry’s progress toward value-based care and how it can maximize the benefits of the model.
How far has the healthcare industry progressed in value-based care? How much farther do we have to go?
I think the needle has definitely moved in the last 12 to 24 months. Regulatory requirements have become more refined and more providers are focusing on the shift to value-based care. Results released in 2015 from the Medicare Shared Savings program indicate participants made progress in 2013 and 2014 on both quality and costs. While we are seeing more adoption of the model and steady performance advancements, I think it is hard to say how much progress is left to be made. I think it’s fairly safe to say that we’re still in the early days. Something we think will have an impact on accelerating the drive away from fee-for-service to value-based care is that more and more millennials are getting to an age where they’re consuming more healthcare.
Everyone agrees that incentivizing value over volume makes sense – but in your opinion, what makes this transformation so important?
The move to value-based care is the overarching change and philosophy that all other improvements in the industry are built on. Not only are regulations and financial penalties making the shift to value-based care fairly inevitable, healthcare consumers are increasingly coming to expect that they will pay for actual outcomes and improved experience, not just for a service or procedure that may not actually make them healthier.
I also think there are other key drivers that are making the transformation a little more meaningful. One specific example is the increased proliferation of high-deductible plans. The nature of these plans is causing consumers to pay more attention to the costs and the results of the care they’re paying for. From a consumer perspective, value-based care is how they’re going to measure their health ROI. I think that perspective in the transformation is particularly important.
Is this a case where the old adage “easier said than done” rings true?
Oh, absolutely. It certainly isn’t an easy transition to make. Many organizations still have a long way to go to realign around how they deliver value rather than volume.
Also, we often talk about providers and payers and other healthcare stakeholders that need to make the change, but I think it also requires more consumer participation – and that participation needs to be widespread. It can’t just be certain demographics.
How is Conduent helping its clients transform and adjust to the new reality of value-based care?
I think much of the industry has not made all the necessary investments in infrastructure and processes. They continue to leverage their fee-for-service infrastructure and processes instead, and their businesses are still structured around fee-for-service. For these investments to be optimized – for investments in value-based care to be successful – effective action must be taken and it must be proactive, continuous action.
Conduent is helping our clients optimize their investments by helping them, for example, reduce their costs of care by offering them the effective, proactive patient management expertise of our clinicians and staff. In particular, Conduent Health Outcome Solutions, which is our population health management solution powered by our core services, is geared to help our clients in their transition away from fee-for-service to value-based care. Our more than 500 clinicians and staff are dedicated to understanding risk, reducing claims issues, facilitating bill payment, driving medication adherence and more. To demonstrate our dedication to our clients’ goals of improving the health of their diverse patient populations and lowering costs of care, our fees are tied to the delivery of health outcomes instead of the traditional contractual, unit-based fee that we had previously been charging for our services.
The industry may soon see significant regulatory changes. How can Conduent help clients with any potential changes to the Affordable Care Act?
Conduent has a very long legacy. We have been in the healthcare business for well over 30 years. That shows we have been through all kinds of regulatory changes in the past, and we have what it takes to weather whatever comes in the future. While we, like our clients, can’t predict the future, our decades of experience make us a reliable partner to our healthcare clients. We know how to handle changes and the uncertainties of potential changes, and we can help make those changes smoother for both our commercial and governmental clients.