For 2 years, the health system has grappled with depleted resources and previously unimaginable challenges that magnified longstanding shortcomings. Hospital revenues plummeted, “burnout” and resignations among healthcare professionals soared, and the health of the population suffered. But even in the face of overwhelming obstacles, “American ingenuity” hasn’t waned.
Authors of a recent article observed that although the profitability of the industry over the next few years is uncertain, there is substantial opportunity — and pressing need — for innovation in healthcare. They go on to describe emerging business models that show real promise in terms of providing higher quality, more accessible care at a lower cost. The new, innovative models that are generating better returns for payers are those that incorporate care delivery and advanced analytics to better serve individuals with complex healthcare needs (ie, chronic disease and long-term conditions requiring continuous management). The authors suggest that Medicaid is one of the segments that offers potential for growth in this area.
If this sounds vaguely familiar, there is good reason. At their core, these innovations are actually next-generation managed care models that are being deployed strategically in regions where they are likely to have the greatest positive effect for individuals.
The pandemic accelerated an already substantial shift from the hospital-based care delivery to outpatient facilities and telehealth applications, forcing health systems to broaden their focus. Well beyond improving the bottom line, health systems’ new diversified business models provide care in more appropriate settings and improve care coordination while maintaining or enhancing the quality of services.
Pennsylvania has a longstanding reputation for implementing innovative business models. For example, the University of Pittsburgh Medical Center and Geisinger Health are nationally recognized for demonstrating how health systems can benefit both their patients and their bottom lines by entering the insurance business; in addition, payers in the southeastern part of the state helped pioneer Medicaid managed in the mid-1980s.
Here in Philadelphia, the introduction of a new integrative model is playing out in real time. Several months ago, Thomas Jefferson University announced the completion of a long-planned purchase of Health Partners Plans, Inc, a nonprofit Medicaid managed care plan. The purchase places Jefferson among the growing ranks of integrated health systems that own hospitals, employ doctors, and operate insurance companies that pay for healthcare. Rather than entering the commercial health insurance market, the health system’s interest centered on Health Partners’ Medicaid and Medicare plans that serve the city’s poor neighborhoods.
My colleague and former Jefferson CEO Stephen Klasko, MD, MBA, was the driving force behind this and many other innovative approaches. He saw controlling health insurance dollars as a means of reducing wasteful spending, eliminating fragmentation of health insurance payer and health care provider, and – most importantly – making new interventions possible. For instance, making broadband and telehealth services available can help reduce hospitalizations for Medicaid beneficiaries with chronic conditions.
We’ve come a long way since the 1980s when managed care was looked upon with suspicion. We’ve seen the concepts of population health and value-based care incorporated in Medicare and Medicaid. We’re better attuned to the social determinants of health and more cognizant of the need to recognize and eliminate inequities. Next-generation managed care models are not yesterday’s HMOs – they may very well be part of the solution to the health system’s woes.