Health IT

Valence Health: Providers should embrace risk-based reimbursement

How fast is demand growing for population health management services? On the day Andrew Eckert started as CEO of Valence Health, a supplier of consulting, technology, medical management and other services under risk-based healthcare reimbursement systems, the company added 29 other new employees.

How fast is demand growing for population health management services?

In late July, the Office of the National Coordinator for Health Information Technology awarded a $2.2 million grant to research organization AcademyHealth to develop population health strategies under the new Community Health Peer Learning Program.

Last week, as MedCity News reported, the Healthcare Information and Management Systems Society announced the Connected Health Conference, which combines the existing mHealth Summit with two new events, called the Population Health Summit and Cyber Security Summit.

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And on Aug. 3, the day Andrew Eckert started as CEO of Valence Health, a supplier of consulting, technology, medical management and other services under risk-based healthcare reimbursement systems, the company added 29 other new employees. Eckert said that the shift toward value-based care is the biggest change he has seen in his 25 years in healthcare. “[Payers] are going to have to re-think their business models,” he told MedCity News in an interview at Valence Health’s Chicago headquarters.

Valence had 100 employees in 2012. It now has more than 900, according to co-founder Phil Kamp, who stepped down as CEO at the end of July, but remains as chief strategy officer. Kamp said he brought in Eckert because he wanted help scaling the fast-growing company, which has been in business since 1996.

“We started when [population health] was the right thing to do,” not the financial imperative it has become, Kamp said.

This is the sixth different company Eckert has been the CEO of. Notably, he ran electronic health records vendor Eclipsys from 2005 to 2009, leaving a year before that firm merged with Allscripts Healthcare Solutions. Most recently, Eckert headed payer-focused health IT company TriZetto, which he shepherded through a $2.7 billion sale to outsourcing firm Cognizant Technology Solutions.

Valence Health works exclusively within risk-based payer contracts.  That model got a boost in February when the Centers for Medicare and Medicaid Services announced that outcomes or efficiency gains would be factors in 95 percent of all Medicare fee-for-service payments by 2018.

Valence’s clientele is primarily made up of provider organizations — mostly hospitals, but some physician groups. Valence also serves about 15 provider-sponsored health plans and has recently branched out into insurance co-ops.

“We specialize in risk and clinical integration,” Kamp said. Then he made a surprising statement: “The more risk, the better, we believe.” And he was speaking from the provider’s perspective.

“Risk for the provider is much less risky than risk for the payer,” Kamp said. “And risk is less risky than no risk.” That is because, typically, 80 percent of a hospital’s costs are fixed. Bundled payments help keep patients within the organization, Kamp explained. “The key is keeping the services within their network.”