@BoltyBoy: Thoughts on the main reason(s) value based failed to gain traction in the 1990s? And has anything changed in the last 20-30 years that address these reasons? (Any good essays on this topic you'd recommend? Have you written on this?)
To me, feels like the world is different, as there have been significant (technology) changes since the 1990s like, to name a few:
- Adoption of EHRs / electronic records
- New policies (e.g., around InterOp, Data blocking)and payment programs; ACA
- Proliferation of smartphones, remote monitoring
- Cloud computing, increased analytics power
- Boom in internet access - including high speed (for many)
- Consolidation of large health systems across Primary Care, Specialist; less independent practices
- Increases in physician burnout in FFS systems
Like many readers here, I wasn't in health tech in the 1990s. I want to learn from the past, but I don't want to blindly conclude that just because something didn't work in 1990s, it won't work in the present day without better understanding WHY it didn't work in the past and if I think the situation is different enough today, or not, to sufficiently increase the likelihood of a different outcome.
"As a playbook emerges for setting up these contracts, private payers continue to get more comfortable with risk arrangements. The typical arrangements involve payers giving 85-90% of their patient revenue to a risk-bearing provider. This allows the payer to lock in 10-15% profit margins."
If you think about that for a bit I imagine you'll figure out why that can't possibly be true - the payer still has to pay for marketing, claims administration, call center staff, network management, and all the other pieces that any other health has to pay for. An MA plan's MLR is usually around 85% anyways, so handing that over to a payer partner just hands that portion off and the plan maintains the usual 3-4% margins on the MA business.
The reason it's valuable to the payer and the provider partner is that it provides an incentive the the provider to boost risk scores in MA, which increases the bottom-line PMPM margins (not percentage margins) for providers and plans.
this is high quality. thank you!
Well written and thought out but sadly the same thing could have been and WAS written in the 1990s and yet we are now where we were then.....
@BoltyBoy: Thoughts on the main reason(s) value based failed to gain traction in the 1990s? And has anything changed in the last 20-30 years that address these reasons? (Any good essays on this topic you'd recommend? Have you written on this?)
To me, feels like the world is different, as there have been significant (technology) changes since the 1990s like, to name a few:
- Adoption of EHRs / electronic records
- New policies (e.g., around InterOp, Data blocking)and payment programs; ACA
- Proliferation of smartphones, remote monitoring
- Cloud computing, increased analytics power
- Boom in internet access - including high speed (for many)
- Consolidation of large health systems across Primary Care, Specialist; less independent practices
- Increases in physician burnout in FFS systems
Like many readers here, I wasn't in health tech in the 1990s. I want to learn from the past, but I don't want to blindly conclude that just because something didn't work in 1990s, it won't work in the present day without better understanding WHY it didn't work in the past and if I think the situation is different enough today, or not, to sufficiently increase the likelihood of a different outcome.
Just feel lucky you werent doing health care back then. Otherwise the 90s were lots of fun!
"As a playbook emerges for setting up these contracts, private payers continue to get more comfortable with risk arrangements. The typical arrangements involve payers giving 85-90% of their patient revenue to a risk-bearing provider. This allows the payer to lock in 10-15% profit margins."
If you think about that for a bit I imagine you'll figure out why that can't possibly be true - the payer still has to pay for marketing, claims administration, call center staff, network management, and all the other pieces that any other health has to pay for. An MA plan's MLR is usually around 85% anyways, so handing that over to a payer partner just hands that portion off and the plan maintains the usual 3-4% margins on the MA business.
The reason it's valuable to the payer and the provider partner is that it provides an incentive the the provider to boost risk scores in MA, which increases the bottom-line PMPM margins (not percentage margins) for providers and plans.