The Role of Ambulatory Health Care in a Transitioning Payment Environment

The Role of Ambulatory Health Care in a Transitioning Payment Environment

Ambulatory health care has always been important to a health system’s strategy but is more critical now than ever. Here’s why your health system’s leadership team needs to make ambulatory strategy a priority in the coming year. 

Navigating Competition and Transitioning Payment Models

Today’s health systems face more competition than ever before. Retail health providers and private equity-backed organizations have joined the ranks of traditional health system competitors. In this new environment, ambulatory health care is a defensive tactic to respond to changes in the competitive landscape.

But perhaps the primary reason why ambulatory health care is more critical than ever is the transition from fee-for-service payment models to value-based care.

Much has been written about the move to value-based care, but the reality is that the change is happening very slowly. While the financial arrangements with payers are an important part of the conversation, in the end, your system needs two things to successfully make the transition: 

  1. You need enough fee-for-service billings to sustain your system and fund investments to prepare for the future environment.
  2. You also need to drive down costs as much as possible to survive the inevitable drop in fee-for-service billings that will come as part of the transition.

Ambulatory health care offers systems the opportunity to fulfill both of those needs. The high volumes that come with providing routine care drive fee-for-service payments today, allowing you to continue to fulfill your mission and begin investing in population health initiatives for the future. At the same time, ambulatory facilities can also help to drive down costs by transitioning care away from higher cost facilities.

And ambulatory strategy doesn’t just matter during the payment model transition; it will also play an important role in the future value-based care environment. To provide value-based care, your system needs to:

  • Know who your patients are
  • Offer convenient access to care
  • Build relationships with patients – not just when they are sick

By providing greater visibility, convenience, and the opportunity to build relationships with patients through ongoing interactions, ambulatory clinics are the front doors into your community that help you reach patients and defend your market share.

The Bottom Line

A health system’s primary objective is to fulfill its mission, but there is no mission without margin. Ambulatory health care is the vehicle that health systems need to sustain margins throughout the payment model transition. If your health system is struggling to define its ambulatory strategy, learn more about how to get started