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Reimbursement in health care is a complicated subject, but it’s important to understand how reimbursement impacts North Mississippi Health Services and why we needed to make a change.

We are mostly paid on a “fee for service” basis, which means we are paid by insurance companies based on the volume of services we provide. In a “fee for service” or volume-based payment model, health care providers are incentivized to treat as many patients as possible.

Another problem with the volume-based model is that the costs of providing care are now higher than what we get paid by insurance companies, and we don’t see that changing. In fact, reimbursements are going down each year, while costs are going up.

The newer model that we are shifting to, called value-based purchasing, is more patient-focused. Under a “value-based” reimbursement model, insurance companies pay us based on how well we deliver high-quality care and how well we control the cost of that care. A value-based model means that we are incentivized to care for a patient’s overall health, not just a specific episode of illness.

That’s a big shift for us. For example, Medicare no longer pays for a hospital readmission within a certain timeframe after a patient that was discharged from the hospital. So it’s important that we do our best to make sure that the patient has a good outcome and does not need to be readmitted.

Coordination of care for the patient is a big advantage of a value-based model. For example, my mother, who is 89, has a primary care doctor and some specialists that she sees. She has some medication that she takes. When she goes to a specialist, they can easily see the treatments and tests given by other providers because her medical records are connected throughout our system. That coordination of care saves money and time for the patient and helps her stay healthier.

It’s complicated to change models, but we have some experience that helps us to feel confident in making these changes. For a few years, we have managed about 30,000 Medicare members in a value-based model called an Accountable Care Organization, and we have proven that we perform in the top 10% in the country in terms of the quality and results. We were able to save Medicare millions of dollars. The drawback to that model is Medicare only shares a very small percentage of those savings with the us providers.

Our newer model will allow us to keep more or all those savings that we generate by providing more coordinated care.

In our region, Medicare Advantage plans are fairly new. These plans are a great opportunity for us to start converting to a value-based model. More traditional Medicare members are switching to Medicare Advantage plans, and it’s growing quickly in our region because these plans tend to be less expensive and have better benefits.

Patients who are in a Medicare Advantage plan that are under a value-based model with NMHS benefit in many ways, including:

• Better access to more benefits
• Care from providers who are connected through our network and work together to better manage the patient’s health
• More support for both the patient and providers to ensure access to the right care, by the right provider, at the right place and time
• Better outcomes and lower costs for patients, thanks to improved access and better coordination

We will continue to work to change the way we are reimbursed so that we can continue providing great care for our community and have the financial stability to invest in new technologies and continued growth.