Four: Take on more risk (when it makes sense)
The end of March is the end of Q1, thus ends our 2021 expectation series. Thanks for being on this ride with us! In 2020, we saw an increasing demand in health tech and digital health solutions, particularly in diagnostics and remote patient monitoring. The significant disruption has also shown us that healthcare can move quickly; the industry now has an opportunity to hit the reset button on how it addresses its relationship with patients and the care it offers. In one of my recent Forbes columns, I looked at these and other lessons learned from 2020 to then help guide four forward-looking prescriptions:
Prescription 4: Take on more risk (when it makes sense)
I talked about telehealth in my last post (above). Today, let’s address taking on more risk (when it makes sense).
During the pandemic, regular doctor visits dipped, which, for providers, meant a huge drop in revenues, leading to downsizing and losing already slim profit margins. Meanwhile, reduced utilization meant fewer claims for payers to pay out, resulting in them sitting on stacks of cash (that may end up needing to be returned to members).
However, providers and health systems that adopted value-based care reimbursement models fared far better — and others should take note of their success. In short, the decades-long movement from a fee-for-service to value-based care reimbursement model shifts risk to providers and health systems, aligning incentives throughout the supply chain. But this shift has been slow and difficult, with the majority of healthcare payments still being reimbursed through fee-for-service models.
In 2020, the nexus of power in healthcare seems to have shifted to cash-rich payers. In the coming year, we could see them taking on more care delivery through telehealth, chronic care management programs and employed providers — essentially striving for something resembling value-based care coming in from the payer side.
2021 represents an unprecedented opportunity to take advantage of this turning point in healthcare and rebuild it to delight consumers amid their newfound expectations for getting the care they deserve in a format they demand.
Here’s to risks and rewards in 2021!
Portions of this article originally appeared in Forbes.