David L. Morris
A new year for value-based care: Key trends for healthcare payers & providers in 2024
January 05, 2024
By David L. Morris
Value-based care’s north star aligns incentives for payers and providers toward improved patient outcomes and cost-effective healthcare delivery. Investment in value-based care (VBC) companies quadrupled during the COVID-19 pandemic, generating around $500 billion in enterprise value. VBC growth is expected to reach $1 trillion in the coming years as more organizations realize the value of effectively managing costs. In 2024, several trends and themes are shaping the trajectory of VBC growth for healthcare executives and providers.
Ethical AI in healthcare
We have seen the rapid adoption of AI in every industry, including healthcare. One of the foremost trends in 2024 will be an increased emphasis on ethical and responsible AI use within the healthcare sector. While advancements in AI capabilities hold tremendous potential to improve care, without proper safeguards in place they could also have the opposite effect. The ethical use of AI ensures patient safety and trust. It contributes to successfully integrating AI technologies into existing workflows, fostering a collaborative environment between technology and healthcare professionals. AI is poised to be a powerful ally for healthcare practitioners, but it will only enhance their capabilities and cannot replace the value of hands-on care.
To ensure the ethical deployment of AI in healthcare, healthcare organizations must focus on rigorously validating the accuracy of AI solutions intended for clinical and administrative applications. This involves robust testing with checks and balances in the processes to ensure AI tools meet the highest accuracy and reliability standards. Organizations must have ways to proactively address ethical and credibility questions and concerns that arise. They must also be aware of the potential for algorithm biases and have processes in place to mitigate that, guaranteeing equitable healthcare services to every patient population.
Provider administrative efficiency
Physicians grapple with extensive administrative tasks every day. On average, they spend nearly a quarter of their time on these administrative tasks. That contributes to inefficiencies and care delays. According to the latest American Hospital Association (AHA) report, 94% of physicians believe managing a practice has become increasingly challenging both financially and administratively, with 84% identifying administrative burdens as a factor influencing their decision to work for a hospital system instead of opening a private practice.
To alleviate these time-consuming tasks, healthcare providers will increasingly leverage technology solutions and automation in 2024. Software has the potential to streamline a wide range of healthcare processes, reducing the burden on care providers, payers, and employers while improving overall VBC efficiency. The next phase of digital transformation will include:
• Enhanced data interoperability for seamless communication between different healthcare systems
• Integrated EHR tools to improve decision-making at the point of care
• Predictive and prescriptive analytics that offer actionable ways to reduce costs and meet care quality targets
• Care management applications that target the right care to the patients who need it most
• Better engagement tools to empower patients on their own healthcare journey, including more opportunities for remote monitoring and telehealth to improve convenience and access
AI-powered automation will also play a pivotal role in billing, coding, and claims processing, ensuring accurate and timely payment for value-based care services. This shift toward digital solutions aligns with the broader goal of creating a more interconnected and efficient healthcare ecosystem.
Prior authorization transformation
Delays in prior authorization processes have been a longstanding challenge for health systems and provider networks, directly impacting patient care. Eighty-eight percent of providers reported feeling burdened by administrative processes around prior authorizations. In another survey, 80% of medical professionals said delays in prior authorization have a detrimental impact on patients. These delays often result in patients abandoning the prescribed course of care, making it harder for health systems to provide the services patients need.
AI-powered solutions can automate and streamline the prior authorization process. In 2024, using AI-driven tools to address these barriers will be a key driver in supporting VBC goals, which rely on the right intervention at the right time in the right care location. Natural language processing and machine learning can enhance the accuracy and efficiency of prior authorization decisions. That speeds up the approval process so patients receive timely and appropriate care.
Near-real-time AI processing capabilities remove much of the manual intervention in traditional prior authorization procedures. This not only saves time but also reduces the chance of human error in processing – leading to better quality, more accessibility, and more cost-effective care.
However, the use of this technology to authorize and approve care must be accompanied by checks and balances that ensure appropriate and ethical use. That includes:
• Verifying the accuracy of AI models
• Using expansive and high-quality datasets to train models to ensure patient safety and health
• Assigning humans to validate AI decisions
• Creating processes to identify and correct biases in algorithms
Circumventing these critical checks could have serious – and even life-threatening – consequences if AI algorithms deny appropriate and necessary care.
A year of growth
The coming year will be a time of rapid growth for VBC, marked by a commitment to ethical AI use, streamlined administrative processes, and more efficient and effective prior authorization processes. Payers and providers embracing these trends are well-positioned to enhance patient care, reduce costs, and contribute to the ongoing evolution of the healthcare industry toward a value-driven and patient-centric model.
About the author: David L. Morris is the EVP & chief commercial officer at Cedar Gate Technologies.
Value-based care’s north star aligns incentives for payers and providers toward improved patient outcomes and cost-effective healthcare delivery. Investment in value-based care (VBC) companies quadrupled during the COVID-19 pandemic, generating around $500 billion in enterprise value. VBC growth is expected to reach $1 trillion in the coming years as more organizations realize the value of effectively managing costs. In 2024, several trends and themes are shaping the trajectory of VBC growth for healthcare executives and providers.
Ethical AI in healthcare
We have seen the rapid adoption of AI in every industry, including healthcare. One of the foremost trends in 2024 will be an increased emphasis on ethical and responsible AI use within the healthcare sector. While advancements in AI capabilities hold tremendous potential to improve care, without proper safeguards in place they could also have the opposite effect. The ethical use of AI ensures patient safety and trust. It contributes to successfully integrating AI technologies into existing workflows, fostering a collaborative environment between technology and healthcare professionals. AI is poised to be a powerful ally for healthcare practitioners, but it will only enhance their capabilities and cannot replace the value of hands-on care.
To ensure the ethical deployment of AI in healthcare, healthcare organizations must focus on rigorously validating the accuracy of AI solutions intended for clinical and administrative applications. This involves robust testing with checks and balances in the processes to ensure AI tools meet the highest accuracy and reliability standards. Organizations must have ways to proactively address ethical and credibility questions and concerns that arise. They must also be aware of the potential for algorithm biases and have processes in place to mitigate that, guaranteeing equitable healthcare services to every patient population.
Provider administrative efficiency
Physicians grapple with extensive administrative tasks every day. On average, they spend nearly a quarter of their time on these administrative tasks. That contributes to inefficiencies and care delays. According to the latest American Hospital Association (AHA) report, 94% of physicians believe managing a practice has become increasingly challenging both financially and administratively, with 84% identifying administrative burdens as a factor influencing their decision to work for a hospital system instead of opening a private practice.
To alleviate these time-consuming tasks, healthcare providers will increasingly leverage technology solutions and automation in 2024. Software has the potential to streamline a wide range of healthcare processes, reducing the burden on care providers, payers, and employers while improving overall VBC efficiency. The next phase of digital transformation will include:
• Enhanced data interoperability for seamless communication between different healthcare systems
• Integrated EHR tools to improve decision-making at the point of care
• Predictive and prescriptive analytics that offer actionable ways to reduce costs and meet care quality targets
• Care management applications that target the right care to the patients who need it most
• Better engagement tools to empower patients on their own healthcare journey, including more opportunities for remote monitoring and telehealth to improve convenience and access
AI-powered automation will also play a pivotal role in billing, coding, and claims processing, ensuring accurate and timely payment for value-based care services. This shift toward digital solutions aligns with the broader goal of creating a more interconnected and efficient healthcare ecosystem.
Prior authorization transformation
Delays in prior authorization processes have been a longstanding challenge for health systems and provider networks, directly impacting patient care. Eighty-eight percent of providers reported feeling burdened by administrative processes around prior authorizations. In another survey, 80% of medical professionals said delays in prior authorization have a detrimental impact on patients. These delays often result in patients abandoning the prescribed course of care, making it harder for health systems to provide the services patients need.
AI-powered solutions can automate and streamline the prior authorization process. In 2024, using AI-driven tools to address these barriers will be a key driver in supporting VBC goals, which rely on the right intervention at the right time in the right care location. Natural language processing and machine learning can enhance the accuracy and efficiency of prior authorization decisions. That speeds up the approval process so patients receive timely and appropriate care.
Near-real-time AI processing capabilities remove much of the manual intervention in traditional prior authorization procedures. This not only saves time but also reduces the chance of human error in processing – leading to better quality, more accessibility, and more cost-effective care.
However, the use of this technology to authorize and approve care must be accompanied by checks and balances that ensure appropriate and ethical use. That includes:
• Verifying the accuracy of AI models
• Using expansive and high-quality datasets to train models to ensure patient safety and health
• Assigning humans to validate AI decisions
• Creating processes to identify and correct biases in algorithms
Circumventing these critical checks could have serious – and even life-threatening – consequences if AI algorithms deny appropriate and necessary care.
A year of growth
The coming year will be a time of rapid growth for VBC, marked by a commitment to ethical AI use, streamlined administrative processes, and more efficient and effective prior authorization processes. Payers and providers embracing these trends are well-positioned to enhance patient care, reduce costs, and contribute to the ongoing evolution of the healthcare industry toward a value-driven and patient-centric model.
About the author: David L. Morris is the EVP & chief commercial officer at Cedar Gate Technologies.