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Healthcare is hard. While the American healthcare industry is filled with complexity as it seeks to interweave between multiple care delivery settings, care providers, and payment mechanisms – it points out the obvious that many new entrants into the industry experience: Making changes in healthcare and obtaining winning results is hard.
With Medicare as typically the largest payer for providers, the Centers for Medicare and Medicaid Services (CMS) has the best opportunity to succeed in transforming the industry to a value-based-driven system. As Medicare moves markets in risk-bearing arrangements, commercial carriers will begin to adopt provider accountable care programs that will include risk/reward opportunities. That said, CMS carries the burden of catalyzing change, and that comes with hard decisions and actions to reconstruct incentives.
CMS has created programs to nudge providers to take on greater risk responsibility while giving them the opportunity to obtain greater rewards with more levers to manage risk effectively. In doing so, the market has had several years to experiment with ‘two-sided’ or programs with both up- and down-sided risk, and the results are in…