February 26, 2020


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Health care is in the midst of a paradigm shift. Soon, all health systems and health care providers will have to transition their Medicare reimbursement from fee-for-service to a value-based payment model and take risk on the cost of their patient care. Pure fee-for-service is declining faster than previously predicted for all types of health reimbursement. By 2021,  fee-for-service will account for less than 26% of all payment and health system administrators will have to figure out a way to take on risk.  

Procrastination, in this case the cost of doing nothing, will negatively impact both urban and rural providers. Anyone unwilling to make the transition to value-based care will find their incomes falling, with no way to catch up. Those who don’t make the change will likely struggle with: 

  • generating revenue from population health services 

  • hiring staff and retaining physicians 

  • achieving quality measures, and 

  • overall financial sustainability. 

Value-based payment models are the future of health care delivery for every sustainable health system. This sustainable success will demand that health systems and providers find a way to make the numbers work regardless of size, location, history, demographics, or other factors. 

However, value-based care doesn’t add up for many organizations and some have struggled to make the transition. When faced with the challenges of financial risk and decreasing revenue streams, some providers have given up and reverted to the old, familiar payment methods. They’ve shown that attempting to make the change alone can increase the risk of financial instability.  

Taking a proactive approach is the key to excelling in value-based payment. Many providers have learned that joining a collaborative accountable care organization (ACO), affords the opportunities to have a better understanding and control over their operational, clinical, and financial performances. In 2019, Caravan Health started the nation’s largest ACO, with more than 235,000 attributed Medicare lives. 125 providers in 24 states have successfully reached the critical mass that protects them from excess losses and leads to predictable ACO savings. The projected results are impressive and validate the methodologies and focus required for success. Professionals working in health systems that have made the successful transition to value-based payment models also have the benefits of bonus revenues, reimbursable telehealth opportunities, and clinical integration.  

In addition to providing ACO opportunities for all levels of health systems, Caravan Health recently announced an offer designed for rural-based health systems. This rural, risk-free solution ensures that rural providers will never have to write a check for ACO performance.  Losses are unlikely when participating in a Caravan ACO however, Caravan Health is willing to share in that risk.  

Our video explains more about how to successfully mitigate risk in the transition to value-based payment. Caravan’s model is a proven roadmap for ACO success. Providers can effectively create more scale, drive more change, and generate more revenue with value-based payments. 

Hear about the results of the nation's largest ACO at our upcoming webinar:

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