Four market trends that every CFO should be watching

By Kayla Green, Vizient

Perhaps one of the biggest questions in healthcare right now is: How do we control the increasing cost trend?

There's no easy answer - especially with so many influences impacting the direction and pace, including payer strategies, care delivery models and provider expectations. But, according to Kristin Oberfeld, Vizient principal, it starts with understanding the market.

"Health systems need to know where their market is, and where they are within that market, because every market is transitioning toward value at a different pace," Oberfeld said, adding that with today's ongoing challenges in the payer market, it's important for providers to rethink their strategy and consider one that's more comprehensive of both fee-for-service and value-based care.

"It's not about either-or. Healthcare organizations need to employ a comprehensive strategy that should have components of both," she said. "They will need to focus on traditional market share and getting the best rates possible. But they also should explore value-based care where ready, appropriate and available to capture new opportunities and create new revenue streams."

Top market trends

Here's a look at some of the top market trends Oberfeld shared during a recent Vizient CFO Network meeting:

1. Many healthcare systems are beginning to shift their efforts by looking at new populations who historically have not been prioritized when it comes to value-based care arrangements. "We're primarily seeing this with the Medicaid population, depending on the state, and with the commercial population," Oberfeld said.
2. Alternative payment models in the commercial population are growing faster than in any other segment. "In large part, we're hearing from provider-payer negotiations that the payers are saying, 'Hey, we don't like this rate hike game either. We don't want to give you these double-digit rate increases, but we are willing to have a conversation about a value-based care arrangement.' And that is advancing the commercial progress in value-based care," Oberfeld said.
3. There's a new focus on specialty care strategy whereas before the emphasis was solely on primary care. Health systems are asking how they can be more comprehensive with engaging physicians in value-based care efforts and are focusing on outcomes-based performance metrics. "Each specialty will vary, but many providers are embedding metrics into compensation models, co-management and gainsharing models and funds flow designs to ensure specialists are incentivized to focus on value-based care outcomes," she said.
4. Leveraging a healthcare system's value proposition can help providers be proactive about the strengths they bring to the table when new opportunities arise. Value is being demanded across all payer segments, forcing new types of payer relationships, regardless of payer model. This means providers should develop a data-driven value proposition for more informed contracting, to attract partners and consumers and to drive targeted performance improvement efforts. "It's really important for health systems to use their own data assets, develop their own story, understand where they're really strong and use that to go out to market," Oberfeld said.

By staying informed, gaining an understanding of the evolving market, and leveraging data and insights, healthcare providers can proactively position themselves to capture new opportunities and create sustainable revenue streams. This will ensure they remain competitive and responsive to market demands - which ultimately drives them closer to controlling the cost trend.

Learn more about Vizient Value Transformation & Payer-Provider Alignment.