Navigating Alternative Payment Models
by Vince Volpe
The US healthcare industry is undergoing a seismic shift to emphasize value over volume. The federal government, states, and private payers are collectively pushing healthcare providers to move from a fee-for-service reimbursement model to value-based payments (VBP), with payment tied to cost and quality outcomes. As a result, providers are under substantial pressure to participate in Alternative Payment Models (APMs). A key challenge for providers is understanding these programs to evaluate whether to participate and which APM is best aligned to their organization.
Whether a provider is evaluating its initial foray into APMs or is considering shifting to a more advanced model, a thoughtful assessment of key program design elements is necessary to make this critical strategic decision. Provider organizations must consider which models provide the best opportunity for gain and are appropriate for their organization and network, considering its scope of services, clinical specialties, patient population, investment ability, competitive landscape, and capacity for risk. Providers that carefully undertake this process are the most likely to realize the ultimate goal of linking cost and quality outcomes to financial performance, better serving patients, and competing in a value-based world.