VALUE-BASED AGENCY CONTRACTING CLEARS A PATH TO BETTER OUTCOMES FOR ALL

Kevin Troyanos, Head of Analytics, Saatchi & Saatchi Wellness, at the Publicis Health 2019 Data & Analytics Summit.

By Kevin Troyanos, Head of Analytics, Publicis Health, and Hudson Plumb, SVP, Strategy & Digital Innovation, Heartbeat

Excerpted from Pharma Executive Magazine:

Between 2015 and 2017, growth in not-for profit hospitals’ expenses outpaced growth in their revenues by a full three percentage points,1resulting in a collective $6.8 billion of lost earnings. Thanks in no small part to their affiliated hospitals’ financial struggles, American health systems’ operating margins fell an average of 38.7%2 during the same three-year period—including a 15% drop in 2017 alone.

What’s more, health systems face a variety of factors—diminishing demand for inpatient surgical procedures, eroding standard Medicare and Medicaid payment rates, falling collection rates on private accounts in states that opted out of expanding access to insurance under the Affordable Care Act—that have made the prospect of turning things around using the mechanisms of the fee-for-service compensation model increasingly unlikely.

As a result, a growing number of health systems, 3 and even many individual practitioners, are embracing a new operational paradigm that at once provides them with an opportunity to bolster their bottom lines and exposes them to greater risk: value-based contracting.

Read the full article on Pharma Executive Magazine.

Kevin Troyanos is the Head of Analytics at Publicis Health. Follow him on LinkedIn.

Hudson Plumb is the SVP of Strategy & Digital Innovation at Heartbeat. Follow him on LinkedIn.