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Risky business: What every CFO should know before taking on risk

October 23, 2023 In The News 7 min read
Tammy Schaeffer
How can healthcare organizations know when to make the switch to value-based care and, more importantly, best practices for the transition? In HFMA, Tammy Schaeffer discusses what it takes for healthcare organizations to succeed in this new arrangement.
Healthcare CFOs in a modern conference room discussing how to manage risk.When it comes to risk-based payment, success depends on a modern strategy for meeting patients’ whole-health needs and the analytical and operational support to drive performance.

Investment in value-based care quadrupled during the pandemic, and continued growth is expected across all lines of business. In Medicare Advantage alone, where the penetration rate climbed to 51% in 2023, compared with 42% in 2020 and 32% in 2015, value-based care arrangements dominate contracts between payers and providers. By conservative estimates, Medicare Advantage is projected to overtake traditional Medicare by 2030.

Yet even as the appetite for value-based payment grows among physicians and health plans, hospitals and health systems — and especially those highly reliant on fee-for-service reimbursement — risk being left behind in the climb to value.

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