Reporter’s Notebook: JP Morgan Health Conference 2022

Monday January 10th

Ascension’s revenue is 97% of the service fee and is expected to remain so.

Ascension’s revenue comes almost entirely from paid models, and the healthcare system has said that this figure will remain above 90% for at least the next three years.

The COVID-19 pandemic has exposed payment-for-service pitfalls, but presentations by healthcare providers at the JP Morgan Healthcare conference on Monday morning show that healthcare systems are in very different places in regards to their transition from the paradigm blamed for contributing to today’s out-of-control healthcare spending. …

At Ascension in St. Louis, a huge 142 hospital system with more than $ 25 billion in annual revenues, about 97% of revenue still comes from payment-for-service models, said Liz Fauchage, health care chief financial officer. during a virtual presentation of the company. She said COVID-19 highlighted vulnerabilities for providers who rely on revenue from service fees, especially when non-urgent procedures were put on hold early in the crisis.

Ascension is looking to expand its participation in cost-based payment models, for example by investing in Medicare Advantage plans and Medicaid managed care, Fauchaj said.

Fauchage blamed health insurers and the government for not embracing value-based care in her system.

“As we continue to acquire these capabilities, we hope to see less reliance on this fee-for-service model and more value-based care,” she said. “But given how government payers pay and how difficult it has been to really get meaningful risk-based payment methodologies from both commercial and government payers, we expect more than 90% of our income to continue to come from service fee. models for the next 3 years “.

In contrast, Intermountain Healthcare executives said in their own virtual presentation that the amount of revenue the healthcare system generates from value-based treatment has exceeded the revenue from paid services.

Intermountain’s premium and capitation revenue accounted for 39% of total revenue in 2016. In the same year, 55% of revenue came from paid services for patients. By comparison, in 2020, premium and capitation income was 48%, while patient services were 45%.

“As we all know, service charges can lead to perverse incentives,” said Bert Zimmerli, chief financial officer at Intermountain. “And we’re all about value-based growth.” – Tara Bannow

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