Category: Risk Bearing

Once A Sail, Now an Anchor: Medicare Incentive Programs are Making Safety-Net Hospitals Unaffordable

Here is an interesting exercise and an unfortunate lesson in the law of unexpected consequences: Pop Quiz: Your elderly Granny comes from overseas without insurance and suddenly needs her gallbladder taken out.  You call around the hospitals in town and they agree to extend to you the same rates as they would charge Medicare.  (This is hypothetical, of ...

Transitioning to Risk- Getting Over the Straddle

This week I gave a presentation on “transitioning to risk” at a great meeting with a large group of seasoned healthcare executives in Nebraska. One of the points I made was this:  it is important to remember that when transitioning to risk from fee-for-service, a healthcare organization has to expect a period of poor financial performance before the financial ...

Can “Agile Teams” Reform Healthcare Systems?

I recently had lunch with an experienced physician executive from a large academic medical center.  He told me that his organization was trying to migrate from fee-for-service to risk, and that management had appointed a bunch of large committees to oversee everything from a new cost accounting system to the development of multiple external partnerships.  

Pricing Risk: What Margin Should Risk-Bearing Healthsystems Reasonably Expect?

There is an old adage in the business world: reward follows risk. In other words, in an ideal market, investors are supposed to balance the potential returns of an investment against the possibility that they’ll lose their money. I’ve thinking a lot about risk recently as our organization came to the end of our budget ...

Risk-Bearing Contracts Are Pushing Health Systems Into Adjacent Areas of Business– With New Back Office Needs

An recent interesting HBR blog discusses what I think is an important lesson for health systems migrating to risk-bearing insurance contracts.