Lessons learned from the transition from volume to value

Some factors that play an important role in the decision are well known, including: * Strong leadership vision * Long-term organizational commitment (as opposed to short-term shifting commitments) * Upfront resource investment * Ability to carefully design stakeholder incentives What is limited, how...

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Bibliographic Details
Published in:Healthcare Financial Management 2020-12, Vol.74 (10), p.32-37
Main Authors: Blanchfield, Bonnie B, Meyer, Gregg S, Thakkar, Anjali, Howell, Michelle Pai, Meyer, Catherine J
Format: Article
Language:English
Subjects:
Accountable care organizations
Balance sheets
Case studies
Coronaviruses
COVID-19
Electronic health records
Forecasts and trends
Health care costs
Health care industry
Health care reform
Hypotheses
Industry forecasts
Infrastructure
Leadership
Management
Medical care, Cost of
Medicare
Participation
Quality management
Service enhancement
Success
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Summary:Some factors that play an important role in the decision are well known, including: * Strong leadership vision * Long-term organizational commitment (as opposed to short-term shifting commitments) * Upfront resource investment * Ability to carefully design stakeholder incentives What is limited, however, is understanding of the financial and organizational characteristics an organization must have to remain committed to the VVT for long-term success. Financial leaders are looking at the bottom line, focusing on margins and maintaining profitability in income statements while keeping cash on the balance sheet. FINDINGS Our study tested the following two hypotheses: 1 Senior finance leaders are primary drivers of decisions to enter into ACO contracts 2 To succeed with ACO contracts, hospitals and health systems must first have the following elements in place: * Ability to invest financially in population health * Adequate cash reserves on their balance sheets * Multiple years of profitability * Elastic demand for services with commercial backfill The research disclosed that the first of these hypotheses is correct. [...]some noted that they had very little to invest in PHM programs and hoped that success in the VVT would create new resources for investment.
ISSN:0735-0732
0735-0732