Integrated delivery systems (IDNs) are uniquely situated to deeply understand and serve patients within their particular geographic region. However, their payment model in addition to other factors, threatens the long-term growth of these organizations.
In response to the Affordable Care Act, IDNs are trying to lower costs without further decreasing compensation from health plans. Let’s examine the traditional IDNS compensation model to determine how innovation can drive revenue in this revolutionized ecosystem.
The siege on hospital admissions
Traditionally IDNs have kept the lights on through hospital admissions. This makes sense since a three day stay can bring in around $30,000 in revenue. In the past, it’s been a surefire way to make sure IDNs stay afloat—until now.
With all the changes in health care regulations, IDNs are under attack for the number of hospitalizations they allow. Capitated models put the risk investment on IDNs, resulting in further losses. Plus, other medical groups are proactively trying to prevent unnecessary in-patient services.
For instance, in this era of consumer choice, many patients are more likely to go to unaffiliated urgent cares. What does this mean for IDNs? Patients are not as likely to be funneled into other plan channels such as specialists, and EDs.
The lost referral path, and the way back
IDNs have historically flourished with strong referral partners. However, even those revenue streams are under attack.
It’s no secret that Millennials are often looking for something new and better, and this trend is negatively affecting IDNs. If traditional health systems aren’t meeting Millennials’ needs, this market has no problem searching for more innovative solutions.
On the other hand, Baby Boomers tend to be more health literate and want to be more involved in their treatment. This tendency coupled with a consumer mindset leads to greater expectations for health care delivery. As a result, health systems struggle to retain Baby Boomers as patients.
The needs of the IDNs customer is always changing. This is leaving systems with decreasing compensation from capitated payment models and lower reimbursement from PPOs.
More erosion competitively
Health care initiatives such as the ACA and MIPS reward cost-effective innovations. In response, many new medical models have been proposed to improve whole-person wellness and long-term outcomes.
Instead of visiting primary care clinics, patients can now do at-home testing. They simply take the test and mail it in for results. Or what about the introduction of telehealth that provides 24/7 access to providers, resulting in fewer visits to the ED? These promising innovations are direct competitors to the financial stability of IDNs and their future.
Looking toward the future
The good news is that IDNs don’t have to try to weather this storm. There is a way forward—one that may not be as complicated as expected.
Increasing patient loyalty
If IDNs want to flourish, they need to address the issue of patient retention. Patient engagement is one of the best ways to help patients connect to providers anytime, anywhere. In this way, IDNs can address the main concerns of generational sectors including ease of use and quick access.
By leveraging online patient engagement platforms, IDNs can nurture patient loyalty and show long-lasting results from supported self-management. That’s why Melon exists—to enable health systems to activate whole-person care and to foster patient loyalty.
Digital platforms can also help decrease costs. Melon leverages the expertise of coaches and peer communities to activate patients in their own wellness reducing the strain on physicians. By helping patients meet wellness goals and make behavior change, health systems experience fewer costs while seeing better outcomes.
Plus, primary care clinicians can view this data and conduct more efficient patient visits. The long term result is that IDNs can help more patients at less cost.
Better compensation from payers
Value-based care incentives have made it difficult for providers, like IDNs, to receive the compensation they have come to expect. Today, they must prove the value of what they offer.
By using digital platforms that support patient self-management, IDNs can gather data that supports the effectiveness of their programs.
For instance, self-management enables patients with ongoing heart conditions to lose weight and offset chronic conditions. IDNs can then use these measurables to increase compensation from payers such as Medicare.
Digital patient engagement allows IDNs to improve patient loyalty while meeting their needs and expectations. With this cost-effective investment, they can secure reliable revenue streams and better compensation from health plans.
Learn how to improve patient retention with supported self-management. Download our guide.