Sustainable Financing for Complex Care Management Is Critical to a Value-Driven Health Care System

Effective management of high-need, high-cost individuals is integral to the success and sustainability of a value-driven health care system. These patients make up 5% of the population but account for more than 50% of U.S. health care spend. Complex care management programs coordinate essential services, address critical gaps in communication, and prevent costly, avoidable hospitalizations and other urgent care services. Evolving innovative programs even incorporate nonmedical services such as transportation, housing assistance, and proper nutrition, which address the broader socioeconomic influences of health. Ultimately, complex care management is one of the best available tools to prevent costly and unnecessary use of the health care system — and improve patient outcomes in the process.

Yet despite strong supporting evidence, robust complex care management programs are not ubiquitous. Sustainable financing is a major roadblock; while provider organizations are typically closest to the patient, they may not have the means or desire to fund comprehensive programs themselves. Payers are supportive of care management services but may not adequately pay for those services outside of their own programs. This fundamental disconnect creates a piecemeal system in which programs are not scalable across lines of business, and where not all high-need, high-cost individuals are appropriately identified and targeted for services. Without adequate and secure funding streams, providers may feel compelled to ration care — and innovative programs may be left to wither away after initial seed money runs dry.

The Pacific Business Group on Health and the Health Care Transformation Task Force — two member organizations committed to advancing value-based care — looked closely at these challenges and released a report and contracting guidance with the support of The Commonwealth Fund and The SCAN Foundation.

The study found that provider organizations were more likely to stint on care management if they didn’t have a strategic imperative from executive leadership to internally fund programs or equitable payer funding across multiple lines of business. Without either, providers offered limited services or reserved participation in complex care programs for individuals with higher-paying insurance.

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