Alternative Payment Models for Health System Needed

Nov 30, 2020

The COVID-19 pandemic has hit many industries in profound ways. Due to the lockdowns and social distancing efforts, many health care providers have seen a dramatic drop in patients, translating into diminishing bottom lines. 

What this pandemic has also revealed is that the “fee-for-service” payment model is actually harming providers. Hospitals alone are reportedly losing $40 billion each month in loss of revenue due to cancelled “non-emergent” outpatient and inpatient procedures. As a result, physician practice overall revenue has been slashed in half. Many are saying this is a direct result of “volume-based contracts” that are currently in place at numerous providers. 

In addition, the high cost of treating COVID-19 patients, along with physician practices and health systems having to lay off or furlough workers in great numbers, certainly didn’t help.  

On the upside, this crisis has made the case for more of a “value-based models of care”.  This approach efficiently places providers in a more robust position to withstand the changes. 

The Case For Alternative Payment Models

Value-based care ensures that the U.S. health system will respond more favorably during any health care crisis. Those providers that have always depended on patient volume have not fared well compared to the providers using alternative payment models. In fact those participating in alternative payment models (APM) did not experience a drop in revenue. Plus, with (APM), providers can focus more of their efforts on health improvements to maintain the health of their patients during this pandemic. 

Another unexpected result of the pandemic is the rise of telehealth. Investment in virtual care has proven to be a great move by providers to dramatically reduce the cost of care and increasing engagement with their patients. Telehealth also allows providers to care for the most vulnerable of populations, as they are the ones that can suffer most during the pandemic. 

A report released in 2019 by the HCPLAN (Health Care Payment Learning and Action Network), demonstrated that 35.8% of the total U.S. healthcare payments made in 2018 were connected to alternative payment models. This was a “year-over-year” boost of 34%. Furthemore, when payers were surveyed in the 2019 Measurement Effort, 97% of respondents mentioned that the adoption of APM will result in improved quality care and 88% said that it will translate into more affordable care. 

This will ultimately happen when the government, providers, and health plans are ready and interested in adopting this model. 

The Need For Data Transparency

In order to carry out value-based care programs, there needs to be “data transparency”. This data must reveal which sections of the population need targeted advocacy. What greatly bars this new healthcare innovation is the lack of data exchangeability between providers and payers. By breaking down this barrier, this would greatly reduce the opposing meanings of value and quality. Not doing so creates a roadblock to progress into alternative payment models. 

Every piece of data, from consumer experience to “clinical quality” must be analyzed and improved in partnership with providers for continued innovation. 

APM Could Greatly Improve Patient Population

Many providers in APMs have concentrated their efforts on methodologies to help promote suitable and necessary care. This has been done by empowering patients with tools to manage their own health. If providers and payers can work together, it would greatly facilitate this aim. 

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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