Why Kaiser, Geisinger’s value-based care push won’t be without hurdles

Healthcare industry experts turn their attention to fledgling Resent Health, a nonprofit formed by Kaiser Foundation Hospitals and Geisinger Health, and what it May make sense for value-based care.

On Wednesday, Kaiser in Oakland, California and Geisinger in Danville, Pennsylvania Announced the launch of Resentwhat is planned to be achieved Creating a national network focused on health systems and value-based care. If approved by state and federal regulators, Resent will acquire Geisinger as its first member health system.

Kaiser, a $95 billion system spanning eight states and Washington, DC, pledged to invest up to $5 billion over five years in technology, equipment and services.

“Everyone’s attention is focused on the fact that healthcare is moving in this direction, particularly the reimbursement model,” said Sarah Ernst, partner at the law firm Alston & Byrd.

Most industries still operate on a fee-for-service basis, where the provider is paid for each service rendered. With value-based care, providers are incentivized to provide high-quality care at low cost, and are paid based on patient health outcomes.

Kaiser operates a closed integrated care model, in which its 12.6 million health plan members pay to access coordinated services in inpatient, outpatient, and other care settings. Similar to Kaiser, Geisinger offers health plan options to patients and organized its care model to focus more on population health and preventive care.

Recent Strategy Mid-Atlantic presence Kaiser already has in Maryland and Virginia. Geisinger’s 10 hospitals and 500,000-member health plan span central and eastern Pennsylvania, complementing Kaiser’s footprint.

States like Pennsylvania and Ohio are good regions to test value-based care, considering their well-established ecosystems of hospitals and health systems, said Nathan Ray, A Partner in healthcare and life sciences at consulting firm West Monroe. He added that Resent will be able to build on those connections and take on greater risk at scale.

Ray said, “Nothing I’m hearing here says that this uniquely lit a fire that they weren’t already stoking.” “Kaiser and Geisinger hope … operating out of some value-based playbook of their own. They both understand and adapt to the pressures on the system today. [Kaiser] Has always been a special model. This, in itself, is often seen as a unique way of providing services.”

Primary care is often the easiest entry point into value-based care. Its payment models are more aligned with the cost of care, and primary care providers typically manage a broader scope of patient care. Specialty care can be more unpredictable, with varying costs and levels of acuity.

Ray said he sees potential opportunities for Resent and its members to expand into more medical specialties and incorporate a value-based model into those types of care.

Creating a value-based network that aligns the priorities of providers and payers is not easy. Neil Shah, a shareholder at law firm Polcinelli, said many systems face challenges when they move beyond their core operations, such as changes to legal frameworks or compensation policies.

A Kaiser spokeswoman said the system’s point-of-care model may not work in every geographic region, plus it’s slow to scale and requires substantial capital to enter a new market.

Shah said whether the new recent strategy will move the needle on value-based care remains to be seen.

“These are two systems that have had a lot of success in this area, but it is not clear whether this is something that is transferable,” he said. “Does this create a platform to help other health systems adopt similar types of integrative models, or is it just something that is unique to cultures and to Kaiser and Geisinger’s organization?”

Shah said both systems have adjusted their mindset to consider the entire care continuum, and they have a track record of keeping hospital utilization costs relatively low.

As part of the deal, the newly formed Resent and its members may receive resources from Kaiser, but it will continue to operate as a separate organization. Ray said having the backing of a nationwide brand like Kaiser will be a tailwind for health systems joining Resent.

Lauren Berryman contributed.

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