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New Clinical and Financial Models for Long-Term Success

Healthagen and HealthLeaders have teamed up on a new report that reveals how providers are managing cost control in the new world of value-based care. Our perspective is below - for the full report, visit

Actionable data on healthcare costs, integration with care partners, and technology to support value-based goals are the top three challenges in sustainable cost reduction. These are the clear needs as reported by respondents of the 2015 HealthLeaders Media Strategic Cost Control Survey, which provides insight into the top financial priorities for healthcare leaders across the country. 
Every year, as the Institute of Medicine has reported, hundreds of billions of dollars are wasted on unnecessary healthcare services, inefficiencies, and excessive administrative costs. That estimate—at least 30% of the nation’s health expenditures—emphasizes why strategic cost control is such an important issue to solve. As our industry shifts toward payment models that focus on population health and value-based care, the challenge is to better contain costs through operational efficiencies in the short-term while redesigning a sustainable clinical and financial model for the long-term. 
Understanding true costs of care
The HealthLeaders Media study demonstrates decisively that most respondents (68%) are already actively involved in value-based care, or plan to be in the near future. This model requires provider organizations to determine their true cost of care, which can be a challenge. Indeed, 60%  of survey respondents say that lack of data on care costs was the No. 1 barrier to achieving sustainable cost reductions. Even forward-thinking organizations often wrestle to understand this metric down to the patient and provider level of granularity. Why does one physician cost more than another to get the same results? 
More than half of respondents see analytics as the solution to this issue: 53% say analytics support for expense and cost monitoring would deliver a big financial benefit. Also, 48% say identifying clinical process variation shows promise for both understanding and reducing costs within the next three years. A larger percentage, 55%, feel that technology to integrate clinical and financial data would help identify and manage costs in the future.
Many healthcare organizations are solving data and analytics challenges through strategic relationships with payers, including risk-sharing, gainsharing, and bundled-payment arrangements. Thirty-six percent of survey respondents participate in joint ventures with payer organizations today, or plan to in the future. Collaboration with payers gives providers access to claims data, which, combined with clinical data, provides better support for clinical decision making at both the population and individual level.
By collecting and analyzing larger amounts of data, providers can first understand and then work to eliminate costly variations in care.  
Integration with payers and care partners
Integration is a word we hear frequently in healthcare, and survey respondents see integration as both a challenge and an opportunity. Forty-one percent say that insufficient integration with care partners is an obstacle to containing costs. 
This emphasis on integration is another reflection of providers’ investment in population health, value-based care, and payer collaboration. By working together, providers and payers can combine their different areas of expertise to strengthen care coordination and integration across care settings. Payers have extensive expertise in care management programs, which support patients with costly chronic conditions and help high-risk patients determine the best measures to improve their health. Care managers often work alongside provider teams, providing integrated support for patients who need it the most. These joint efforts can have a positive impact on key cost drivers, such as unnecessary emergency room visits and hospital readmissions, as well as improving coordination across the care continuum. 
Improving quality, managing costs
As expected, the focus on strategic cost control doesn’t come at the expense of care quality. A large percentage of respondents, 80%, say that quality of care has not declined as a result of any cost containment initiatives. Meanwhile, survey respondents have optimistic expectations for continued improvements in both cost reductions and contribution margin over the next three years. Fifty-two percent expect to see a 5%–10% average annual percentage reduction in costs in the coming years, compared to 42%who achieved that level in the most recent fiscal year. Eighty-five percent of respondents estimate that they will achieve a positive operating margin in the coming years, compared to 77 percent who did in the most recent fiscal year.
Until recently, revenues were based exclusively on treating patients, and volume was the desired goal. Today the emphasis is on shared cost savings through population health and accountable care. This HealthLeaders Media Intelligence Report mirrors our progress on aligning all stakeholders toward common objectives. It demonstrates the challenges we have already overcome, as well those we still need to solve. Accelerating to the finish line will take collaboration, innovation, and determination.



Categories: Finance, Accountable Care, Population Health


Dan Finke
Chief Executive Officer of Accountable Care Solutions from Aetna

Daniel Finke is Chief Executive Officer of Accountable Care Solutions from Aetna, a Healthagen business. In this role he is responsible for leading our strategic accountable care and value-based contracting solutions. Mr. Finke joined Aetna in June of 2014 from EmblemHealth, Inc. where he was President and Chief Operating Officer. At EmblemHealth he had previously served as Executive Vice President, responsible for medical and network management, sales and marketing, commercial and government programs, operations and information technology.

Prior to EmblemHealth, Mr. Finke spent 13 years at WellPoint in various positions including Senior Vice President of Health Care Management, and Vice President and General Manager for the Medicare Advantage program. He has served on multiple boards, including the Alzheimer’s Association of New York City, The Battery Park Conservancy, America’s Health Insurance Plans and the New York Health Plan Association.
Mr. Finke is a registered pharmacist and holds a bachelor’s degree in natural sciences from Xavier University, a bachelor’s degree in pharmacy from the University of Cincinnati, and a master’s degree in business administration from Xavier University.



I'd say this topic would be considered "trending" by todays language and will remain "trending" for this audience over the foreseeable future. One area that is commonly overlooked is the increased popularity of holistic and integrative health providers. More interestingly, the popularity is driven by successful results rather than curiosity - and that is something company executives and insurance providers alike are intentionally or unintentionally overlooking. There will be no shameless promotion here, simply an invitation to raise your hand about the interest to engage further on how we can set up a measurable test to prove a medium and long-term value that positively impacts the bottom line for everyone (including individual employee's).

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