Healthcare Providers and the Pursuit of Cost-Saving Measures

In a recent article titled “What to expect in US healthcare in 2023 and beyond,” McKinsey & Company discussed providers’ ongoing pursuit of cost-saving measures:

“Although post-acute care profit pools could be severely affected by labor shortages (particularly nurses), other sites of care (such as ambulatory surgery centers) and virtual care should continue to grow. We also anticipate an accelerated adoption of value-based care as stakeholders, including a broader set of providers and payers, aim for enhanced care management and effective cost management through improved utilization and other measures, such as increasing the use of alternative sites of care.”

Providers and Cost Savings: On the Path to Value-Based Care

The pandemic and other events of the past three years have strengthened  the commitment many in the healthcare industry have to a value-based care (VBC) model as the future of healthcare. VBC models, in sharp contrast to traditional fee-for-service models, reimburse providers based on clinical outcomes. That intensifies the pressure on providers to deliver high-quality care at a manageable cost. It also provides an unmatched opportunity—or obligation—to reassess practically their entire approach to healthcare. This provokes questions like what are we doing, why are we doing it and how can we do it better (if we should we even be doing it at all)? Beyond that, where should we be doing it?

Asking yourself these questions, and answering honestly, should help your organization develop strategies to guide you through these tumultuous times and the challenges they pose. Here are some suggestions.

Enhance Care Management

Effective care management uses targeted and timely interventions to reduce an individual’s health risks and the cost of care.

Patient education and engagement are pillars of this proactive approach. Individuals with higher levels of health literacy have a better understanding of their condition and their role in managing it. They tend to make better decisions related to their care, including taking advantage of preventive screenings and monitoring their condition as directed. Providers can use interactions with patients to help them understand, for example, when a phone call to the doctor makes more sense than a visit to the emergency department. Also, by reinforcing the importance of adherence to care plans and medication regimens, providers can lower the risk that a patient will need costlier care as a result of noncompliance.

With the right data and tools:

• Providers and their care teams get a holistic view of the patient, making it easier to identify gaps in care and social determinants of health that might be negatively affecting a patient’s well-being.
• Workflows can be automatically triggered in response to patient events, supporting timely intervention and, when necessary, pivoting to address unforeseen developments.
• Relevant data is shared among all parties involved in a patient’s care, supporting care management goals and cutting down on redundant and unnecessary procedures and costs.

Improve Utilization

For providers, improved utilization means appropriate utilization: reducing unnecessary hospital admissions, visits to the emergency department and other avoidable, high-cost healthcare services while ensuring that patients receive the care they need. In other words, it entails not only managing costs but also ensuring quality and managing risk.

Healthcare providers can partner with health plans to eliminate inefficiencies, optimize the use of limited resources and improve health outcomes. Strategies for improved utilization include automation of administrative tasks such as eligibility and benefit verification, prior authorization and claim submission, as well as better care coordination and management of transitions between care settings.

Among the ways to ease care transitions are identifying patients before they become high-risk (and higher-cost), determining mortality rates of patients in the intensive care unit to aid doctors’ decisions about resource allocation, and streamlining patient flow in the emergency room. Data analytics and predictive modeling are essential tools for accomplishing each of these aims.

Aerial™, Medecision’s HITRUST CSF®-certified, SaaS solution, drives efficiency, cost savings and regulatory compliance through automation of routine tasks, helping providers focus their efforts on requests that require clinical judgment and decision-making.

Explore Alternative Sites of Care

An alternative, or alternate, site of care (ASC) is “any building or structure that is temporarily converted or newly erected for healthcare use,” the Centers for Medicare & Medicaid Services (CMS) says. An October 2022 article from Deloitte offers a simpler and broader definition: “care outside the traditional doctor’s office.”

At the beginning of the COVID-19 pandemic, hospitals, state and local governments, and other entities began developing and using sites such as repurposed cafeterias and gymnasiums, convention centers and even tents to increase their capacities and address the rapidly expanding need for care. Other examples of ASCs include retail clinics, community centers, the home and virtual settings.

Such nontraditional sites can help make care more convenient, accessible and equitable, providing a better customer experience, the Deloitte article asserts. In addition to freeing up primary care sites for those most in need of them, they can improve access for—and build trust among—underserved populations.

From a cost-saving standpoint, the pandemic shone a spotlight on at home and virtual modes as potentially less expensive methods of care delivery. Such options can be particularly useful for preventive and wellness appointments and mental health care. These check-ins can provide patients with the care they need—and prevent their conditions from deteriorating to a point where they require more intensive, and expensive, care.

In summary, the new perspectives afforded by the shift to value-based care can be drivers to improved care and outcomes as well as reduced costs. Medecision is happy to help you accelerate your adoption of VBC, enhance care outcomes and improve utilization. And Aveus, our healthcare consulting firm, welcomes the opportunity to help you create strategies for VBC and manage the ongoing changes in the healthcare industry.

Next Steps for Providers

• Download our free white paper, “Utilization Management Through the Lens of Value-Based Care,” to learn game-changing strategies for dealing with utilization management-related challenges.
• Download our solution brief for an overview of how Aerial™ supports efficient utilization management.
• Contact a Medecision expert to learn about solutions that support your cost-saving efforts.
• Subscribe to the Medecision blog for more healthcare trends and strategies like this.