5 Financial Challenges to Prepare for When Transitioning to Alternative Payment Models

By Pam Jodock, senior director, health business solutions, HIMSS North America

HIMSS18 Addresses Changing Landscape for APMs


As healthcare in the US transitions from fee-for-service to pay-for-value payment models, it’s important for organizations to think critically about how to manage the financial challenges associated with this transition.

Here are five challenges to consider in the transition from fee-for-service to pay-for-value.

1) Choose a model that aligns with your organizational goals and strengths

For organizations that have some control over the alternative payment model(s) they will participate in, it is important to choose a model or models that best align with your organizational goals and strengths – the first step in setting yourself up for financial success.

2) Identify the data to collect for sound business decisions

Then, there’s the matter of identifying what data to collect across the organization to help manage your financial risk and make sound business decisions. When I use the term “financial risk” in this context, I’m not just talking about upside or downside risk contracts. I’m talking about the larger world of an organization’s overall business operations, for example managing supplies, personnel, logistical resources, etc. in the most efficient way possible, or constantly monitoring and implementing best practices across all departments, administrative and clinical.

3) Consider how the difference between fee-for-service and alternative payment models (APMs) may affect your ability to control the cost of caring for your patients

Unlike fee-for-service payment models, APMs may require hospitals to accept financial responsibility for a patient for an entire episode of care, even if individuals not directly employed by the hospital are involved in delivering that care. Hospital and physician alignment is critical, especially when that relationship involves independent physicians who may be operating within a different type of APM with competing incentives.

4) Manage quality metrics into financial calculations

Organizations must also find a way to evaluate, track, and incorporate quality metrics into their financial calculations and prepare for retrospective reconciliation of financial arrangements with payers.

5) Develop effective patient engagement strategies and payment opportunities

Finally, as patient payments continue to represent a larger portion of provider revenue, it becomes imperative that providers and organizations develop effective patient engagement strategies and payment opportunities to increase collection of those dollars.


At the HIMSS18 Business of Healthcare Symposium: Going from Good to Great in a Value-Based World, attendees will learn about how other organizations are addressing these challenges through revamped patient engagement strategies, updated approaches to data analytics, contracted provider arrangements, and more.

We look forward to sharing more insights with you on these important topics at HIMSS18. See you in Las Vegas!



Learn more about the HIMSS18 Business of Healthcare Symposium: Going from Good to Great in a Value-Based World.