Executives often describe their organization’s financial state as ‘a foot in two boats.’ This metaphor implies the transition period is temporary and that the transition itself is binary. In practice, it’s an iterative process—no organization does it in one fell swoop. No organization simply steps from one boat to the other.
I’d urge leaders to embrace hybrid incentives and think long-term. Fee-for-service and risk strategies do not have to be distinct. For example, promoting an efficient, accessible, and scalable care team has dual value. Near term, it helps the care team deliver on convenience, retaining patient loyalty. Long term, it helps the care team provide dedicated services to patients who need them.
But some extended services necessary for effective population health management will require more judicious deployment. A fully payer-agnostic approach is not sustainable. Existing fee-for-value reimbursement combined with small amounts of risk-based payment do not fully cover the cost of these services (such as: care managers and social workers). A good starting place is taking an honest look at your risk contracts to allocate existing resources and identify necessary investments.
Importantly, this imperative doesn’t start and stop with you. Make sure the entire executive team is reading the same sheet music, especially your CFO. (And then check again every time something changes.) Leaders must realize they will be operating under multiple financing mechanisms and work to synchronize clinical and financial transformation together.