5 key thoughts on payer strategy for ASCs — Risk-sharing, narrow networks & payer consolidation
Ambulatory surgery centers are developing new payer strategies as the healthcare market evolves toward value-based care.
"There is tremendous pressure on healthcare costs that can naturally pressure health plans to seek unit cost reductions," says Brian Mathis, senior vice president, strategy and payment innovation at Surgical Care Affiliates. "Where we have seen our greatest successes is when we are able to work with health plan executives to devise a market wide strategy to ultimately reduce the cost of care for surgery."
Here are five key trends to consider when developing a payer strategy for the future:
1. Increase pricing to incentivize ASC use. The ASC’s strategy to reduce the cost of care often includes increasing the ASC pricing to appropriately incentivize physicians to use the outpatient center based on quality and cost.
"Opportunities need to be presented to the health plans in the context in which they view the market," says Mr. Mathis. "Simply asking for higher rates is unlikely to succeed even if those higher rates may be justifiable. Instead, consider the entire outpatient surgery spend for that particular health plan and propose how you can help them beat their budget and what commitments you are willing to go at-risk for assuming you are confident in the impact your surgeons can have."
2. Jump onboard for risk-sharing. Health plans are focused on risk-sharing strategies to align stakeholder goals. Risk-sharing plans include bundled payments and accountable care organizations which make providers responsible for their outcomes and overall costs. The insurance companies are looking for surgery center partners to go further upstream and manage utilization in partnership with the organization’s surgeons.
"ACOs, a number of which are physician group led, can be a tremendous opportunity for ASCs with the sophistication to provide detailed analytics, reporting and deliver value by reducing the cost of care for surgery, which is one-third of the total medical spend," says Mr. Mathis. SCA currently partners with medical groups like Monarch, a division of Optum, and health systems like Advocate in Chicago on ACOs.
"Both are very successfully pursuing ACO strategies and have chosen SCA because we can help them realize their goals for quality, patient experience and cost in their ACO contracts," says Mr. Mathis.
3. Embrace provider alignment in the face of narrow networks. Health plans, employers and individuals are looking for better pricing, and typically the best prices are through narrow networks. Narrow networks can be treacherous for providers because they promise volume in exchange for lower prices, and may not always prove beneficial.
"Any network will need a broad array of services hospitals can provide so it can become challenging for a single ASC to remain part of that network," says Mr. Mathis. "We have seen success in this area by ensuring our surgeons and surgical facilities are a vital part of the healthcare delivery system in a market with a reputation for quality such that employers would not want a network without us."
4. Leverage best platforms as insurance companies consolidate. Health plan consolidation will likely affect contracts in the future, but the most recent wave of health plan consolidations are still a ways away from approval and completion. The larger mergers include Aetna-Human acquisition and Anthem-Cigna's merger.
"On some levels we are experiencing it as a distraction for these health plans as resources become focused on the integrations and individuals naturally focus on what their role will be in the combined companies," says Mr. Mathis. "That said, as these companies come together we believe they will benefit from leveraging the best of platforms, which may help administer innovative payment methodologies like bundled payments and in many markets bringing a better sense of balance with the growing power of health systems."
Throughout the mergers, ASCs that remain focused on delivering value to health plans and offering meaningful solutions to merit the health plan executives’ time will be most successful through the transition.
5. Meet high-deductible plans with higher acuity cases. An article published in the Journal of the American Medical Association in January shows members of high deductible health plans and traditional plans are equally likely to price shop for medical care and have similar attitudes toward price and quality. The study suggests health plans should focus on working with providers to incentivize high quality care in high value sites.
"Health plans continue to respond well to data that is directly correlated with their metrics and helps ensure they meet their operating plans for a market," says Mr. Mathis. "We are able to use our national database of information on quality and cost to ensure our partnerships are well-positioned to migrate high acuity cases to ASCs and to help independent surgeons and independent ASCs thrive as independents."
More articles on surgery centers:
5 key observations on ASC payer contracts in 2016
Doing your due diligence: 5 considerations for ASCs when adding a new service line
Erlanger Health System to build $35M outpatient center: 5 things to know
© Copyright ASC COMMUNICATIONS 2017. Interested in LINKING to or REPRINTING this content? View our policies by clicking here.