Baker Tilly assists hospital system with managed-care strategy and value-based care readiness

Our client’s need

A hospital system expressed concern to Baker Tilly about not being adequately positioned to achieve their strategic goals regarding current trends in managed-care contracting, including incentive programs and preferred networks. They also feared they were facing a competitive disadvantage related to population health.  In addition, the system, like many others, was concerned that their current pricing structure was discouraging the use of elective outpatient hospital services.  While the system contemplated its long-range partnership options, it requested guidance and insight from Baker Tilly’s healthcare specialists on operational and structural changes to help them achieve value-based care (VBC) success in the midst of marketplace changes.

Baker Tilly’s solution

The healthcare specialists at Baker Tilly surveyed the hospital’s competition and their market to gain an understanding of where the system ranked against their peers. They also performed an analysis of referral patterns, costs, contracts and claim data to determine the current reimbursement levels and opportunities.  Baker Tilly provided local rate benchmarks to guide managed-care contracting efforts and to better align reimbursement terms with payer and patient expectations.  We also performed interviews of key employees to assess current capabilities and the perceived level of internal ability and motivation to implement value-based care opportunities.  This information was used to create a three year “road map” prioritizing action steps needed for the system to be better positioned for value-based care opportunities.

Results achieved

The system immediately executed a multi-year agreement with a market-leading payer using the reimbursement structure suggested by Baker Tilly.  In addition, senior leadership began implementing the action steps indicated in the “road map” developed by our healthcare specialists.  Specifically,

  • A shift took place from an adversarial relationship to a successful renegotiation of the managed-care agreement including a change in structure to better support value-based care and an estimated increase in revenue in excess of $8 to $10 million in the first year
  • An advanced hospital/physician integration strategy and roadmap was facilitated to show more effective support of value-based care arrangements as they become available to the system
  • A checklist was developed to hold staff accountable for implementation of approved value-base care readiness action steps to support their strategy

For more information on this topic, or to learn how Baker Tilly healthcare specialists can help, contact our team.