All Risk is Local

By JEFF GOLDSMITH and BRUCE HENDERSON We all knew how this was going to go, or thought we did.   Fee-for-service payment for health services was going to disappear, and be replaced by population health risk-based payment (or as some term it, “capitation”- fixed payment for each enrolled life).  Hospitals and care systems invested substantial time and dollars building capacity to manage the health of populations, yet many are discovering a shortage of actual revenues for this complex new activity.  Was population health a mirage, or an actual opportunity for hospitals, physicians and health systems?    The historic health reform law passed by Congress and signed by President Obama in March, 2010 was widely expected to catalyze a shift in healthcare payment from “volume to value” through multiple policy changes.  The Affordable Care Act’s new health exchanges were going to double or triple the individual health insurance market, channeling tens of millions of new lives into new “narrow network” insurance products expected to evolve rapidly into full risk contracts.    In addition, the Medicare Accountable Care Organization (ACO) program created by ACA would succeed in reducing costs and quickly scale up to cover the entire non-Medicare Advantage population of beneficiaries (currently about 70% of current enrollees) and transition provider payment from one-sided to global/population based risk.   Finally, seeking to avoid the looming “Cadillac tax”  c...
Source: The Health Care Blog - Category: Consumer Health News Authors: Tags: Uncategorized ACO Affordable Care Act Jeff Goldsmith risk Source Type: blogs