24 – A Bad Moon on the Rise? How We Raised the Sense of Urgency and Built a Strategy Shift with our Board of Directors

The pressure on fee-for-service (FFS) payment models continues to build. These models reward increased utilization of health care services, raising the total cost of care. To offset these increases, the adjustments to payment rates are declining. Government rate cuts are not uncommon.  As a result, in most markets, health system operating margins are under unprecedented duress as the cost of providing care is increasing at a rate significantly higher than the rate of FFS payment increases.

While many are focused on insurance coverage under the Affordable Care Act or proposed replacement legislation, few are talking about the core underlying problem: health care services are too expensive. Purchasers, (governments, employers, individuals), are desperate for more effective ways to incent and ensure the best patient care is consistently accompanied by affordability and efficiency. Value payment models are emerging and rapidly evolving to stem the increase in total cost of care, while providing alternative incentives to those of the FFS models. The federal government is advancing new models of payment for physicians and hospitals. Provider/payor contracts and ventures are accelerating the transfer of risk (and reward) for health care service costs to healthcare providers services through a range of pay for value incentive programs/models. The market is ripe for alternative solutions.

How will you convince your board–and your organization–to adapt its market strategy and operating/finance structures to survive, and even thrive, under these alternative models? Come and hear the Minneapolis Business Journal 2016 CFO of the year speak about his experience in engaging health system board members and senior executives in strategic dialogue about the necessary transition. You will learn how they collectively concluded that pursuing greater risk sharing was the organization’s best, perhaps only, path forward, and how partnerships were its best vehicles.

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