Impact of ‘Failure to Progress’ in Value-Based Care on Healthcare System and Patients [PODCAST]

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Impact of ‘Failure to Progress’ in Value-Based Care on Healthcare System and Patients

In this episode, Theresa Hush, CEO at Roji Health Intelligence, discusses the impact of value-based care’s failure to progress in achieving the economic sustainability of the healthcare system and if or what can change the course.

Highlights of this episode include:

• Obstacles to reaching success in value-based care
• How healthcare providers are reacting to the affordability issue and the benefit plans/coverages
• Consolidation of health systems factors
• How business’ ability to afford coverage will affect consumers and health systems
• The expanding value-based care contracting efforts
• How will AI improve or hinder patient access to services
• Are we seeing a move of consumers away from health systems except for major illnesses
• How to accomplish a big change
• CMS payment models’ impact

Kelly Wisness: Hi, this is Kelly Wisness. Welcome back to the award-winning Hospital Finance Podcast. We’re pleased to welcome back Theresa Hush. Theresa, who prefers to be called Terry, is a healthcare strategist and change expert with extensive experience across the healthcare spectrum. A dynamic speaker and thought leader, she focuses on value-based healthcare, the latest healthcare trends, consumerism, and transformation, including AI. Terry’s diverse experience spans executive roles in the public, nonprofit, and private sectors with expertise on both payer and provider sides. With a background in healthcare policy and regulation, she often jokes that she has held every seat in the healthcare ecosystem except in the pharmaceutical industry. Her career highlights include transforming Blue Cross Blue Shield of Illinois, reforming the Illinois Medicaid program to improve access and funding, and leading strategic and contracting initiatives for a large clinically integrated hospital system. As a co-founder and CEO of Roji Health Intelligence, established in 2002, Terry has been instrumental in helping providers prepare for value-based healthcare through innovative technology and consulting services. In this episode, we will explore the impact of value-based care’s failure to progress in achieving the economic sustainability of the healthcare system and if or what can change the course. Welcome, and thank you for joining us again, Terry.

Theresa Hush: Thank you so much, Kelly. It’s great to be back.

Kelly: Yes, great to have you back. Well, let’s go ahead and jump in. So, are we on a tipping point to success or a downward slide in value-based care? With the increasing investment of health systems in data and technology, is there a good chance that we can pull out of the stall, and what are the obstacles to reaching success?

Terry: Well, I tell you the chances are looking better right now than they were at the beginning of the year. There’s been a lot of activity in CMS with new payment models coming down the pike and really cementing a strong value-based care direction. They may well force providers into mandatory models, and that may break the stall. But providers are really worried about the sustainability of their systems right now, especially after the cuts. And the forces that facilitated that kind of stalling of value-based care are still there. The financial sustainability is one of those, but providers’ whole systems are still geared towards fee-for-service. And what we’re seeing come down the pike right now are episodic and total cost of care per capita cost of care payments. And that’s a very different structure and requires a different kind of background to be able to do that and accept risk at the same time. So yeah, I think it’s a toss-up right now. There’s a good chance that providers still think that someone’s going to come to their senses about this strategy in CMS. But there are some emerging leaders who are taking the ball and running with it right now. So I’m a little bit more hopeful than I was in, let’s say, January, February.

Kelly: Well, that’s really good. And I know CMS is always keeping us on our toes. Yeah. So how will the cuts in government Medicaid eligibility and funding expand through Medicare and state programs to address perceived unaffordability or competition of resources for healthcare in the federal budget? And how is business reacting to the affordability issue and its benefit plans and coverages?

Terry: All these things happened as planned by the administration. And I think a lot of healthcare providers and business did not really believe that they would, especially some of the subsidies for the ACA coverages. And they are definitely worsening the sustainability issue in pockets. We’re seeing that in hospital finances right now, we’re seeing it in the consolidations that are occurring because the providers believe that there’s safety in size, I think, still. That’s still a very strong motivation backing the consolidation. Business definitely pulled back on coverages. We saw at least a 20% to 30% drop in coverage through their insurance mechanisms. But also, business is taking a very interesting focus right now– and they’re doing new things to prevent chronic disease and changing lifestyles. And we see business, for example, adopting health coaching as a technique for its employees to be healthier and avoid issues with finances down the pike.

Kelly: Yeah, no, that 20-30% drop, that’s pretty substantial. Yeah. So, with consolidation of health systems continuing to be a factor in higher costs, are economies and efficiencies ever likely to occur? What prevents that from happening? And is healthcare now too big to be nimble and responsive to change?

Terry: That may very well be true, but I think the real underlying problem is not just the newfound size, but more important is the perception of economies of scale when they really don’t dig down into the dirt of how they really want to provide care as providers. They’re erecting this large system on top of a traditional mechanism for delivering care through doctors, not through care teams, not as ACOs– I mean, although ACOs are there and they’re having an impact, by and large, the old model is still alive. And what we see is that large systems who are still offering care in the traditional way are now setting up immediate care centers so that they can head off the complaints of patients who can never see their doctors now or who have to go through call centers to find them. And patients don’t like that system. They don’t like the immediate care system and they don’t like the system of not being able to find their doctors or see their doctors when they’re in trouble. And on top of that, we have the issue of shortages coming up in the system. So, I’m not really sure that we will see an end to this cycle very soon. It may be a combination of being extremely big and also having not enough providers that make it very difficult for traditional healthcare to overcome this.

Kelly: Yeah, I mean, we certainly have some significant challenges right now, that’s for sure. Employers have been exploring new options for mainstream health coverage, like offering technology-enabled metabolic disease platforms, provider-specific arrangements and wellness coaching. I think you mentioned that earlier. How will business’ ability to afford coverage affect consumers and health systems?

Terry: Well, I think these new apps are a very interesting happening right now. And I think they will have an impact. But they are still largely focused on that group of people who are literate in healthcare or health, that they are more educated, they have the money to purchase devices, and so on. But we see that this whole problem of access and cost right now is starting to activate consumers. And that will be an interesting new development. We’re seeing it in the political rhetoric on the democratic side. And the other thing that’s happening, side by side, is the impact of AI. So as AI starts to have an impact on people’s jobs, people are starting to actually question out loud in the market right now, should we be looking at other mechanisms than business to provide coverage to people? And that’s a new question that business hasn’t really grappled with, and neither has the current administration. How do we afford this system, and how do we make it possible to withstand the pressure of both AI and these new cost cuts?

Kelly: Yeah, no, I mean, I love what you said about the apps and what is their impact going to be? There are some challenges there for sure. So, payers continue to expand their value-based care contracting efforts. How will that affect providers and patients?

Terry: Well, risk is going to expand without question. The new coverages that we’re seeing through TEAM and ASM and CJR-X, which are all payment models that CMS has either announced or implemented at this point are all either episodic models addressed at patient episodes of care, either surgical episodes or various conditions like back pain and heart failure. And then we have the ACOs under LEAD, the new type of ACO, which will be on a capitated basis. That will really change the dynamic of those remaining providers who are not in that camp, who aren’t ready for risk, and who are not having to participate in these models. But because the specialty models are so big and so self-encompassing, right now, we’re looking at a situation in which joint replacements, lower extremity joint replacements, will be at 100% or virtually at 100% risk within a couple of years. That’s huge. And that will have an impact on hospitals because they’re the ones bearing the risks under these payment models. It will have an impact on access, and it will have an impact on patient ability or willingness to get joint replacements. It will drive innovation in some of these apps and some technologies and also some efforts to make people fitter, to go a different path, go the health path as opposed to go the intervention path.

Kelly: Wow, those are some big numbers there. So, isn’t this model just the health system monetizing its own patients? I mean, convince us that this is not a compliance and trust problem waiting to happen.

Terry: Well, they buy these products anyway, and they buy them based on your physician’s recommendations. So, it’s not like you’re getting them to buy something they wouldn’t buy. There are lots of laws relating to what a healthcare system can and can’t sell. There’s the anti-kickback laws that relate to what we call DME products. These are products that would be prescribed. So hypothetically, let’s say you needed a wheelchair. Your insurance company normally would cover those types of products. And there’s laws relating to that. And healthcare companies sell those products today. They just are very controlled in the mannerism they sold. There’s a lot of regulations around it. Obviously, there’s what we call the physician self-referral law. It’s mostly a law that is self-governed. And there is an ethical obligation to do what’s right for your patient. You shouldn’t be recommending them something that you wouldn’t be doing it anyway. But as I said, if these patients are going to be buying these products anyway, you giving them the opportunity to buy this actually is helping them. You’re helping them choose the correct product because many times, they go to these stores and they don’t buy the correct product. Here they have now the ability to actually take a product that’s recommended, and you, as a physician, get to actually see the purchases they’ve made. So it really adds to your whole care and your health plan as to the physician for the very first time ever knowing actually, did you or didn’t you actually go forward and execute on the recommendations they made?

Kelly: Yeah, no, I agree. Risk will definitely continue to expand here. Will the growing reach of AI and healthcare enhance or inhibit healthcare from reaching an equilibrium on cost escalation? And will it improve or hinder patient access to services?

Terry: I think the big impact of AI as we go through 2026 and 2027 is the effect on job loss. And what happens to people who have lost their jobs having coverages? So that will be– but at the same time, we’re also seeing new AI apps develop, functional medicine, different testing, independent labs, gene testing, “Get your diet from your gene testing.” A lot of new things that are really appealing to consumers who don’t have any other mechanism to be able to find answers to what they can do for their healthcare. So, I think AI will have an effect, but it’s not clear right now whether that will– what that will do to spur providers, if anything, to offer different kinds of opportunities to change the system in value-based care.

Kelly: Yeah, there’s a lot definitely happening there. And I agree with the job loss. That’s definitely an issue there. Terry, consumers’ trust in the healthcare system is at an all-time low. Some are now purchasing technology and investing in genetic and functional medicine testing. Consumer-directed wellness are companies focused on maintaining health. And you kind of talked about this already. Are these fringe efforts, or are we seeing a move of consumers away from health systems except for major illnesses?

Terry: I think that is a significant risk. People who are healthy and who are literate, as I mentioned, are really focused on how they can keep that way and keep away from the doctors. Nobody wants to spend three hours in an immediate care center because they’ve got a respiratory infection. So, I think that people are really focused much more than they have been in the past on proper nutrition. Health coaching is making this surge of popularity across the health system now. Businesses, insurance companies, healthcare providers, ACOs are all hiring health coaches, not just to help people who are really sick, but to help people who want to avoid going to the doctor at all. So, very, very interesting development right now from the consumer side. And I think this is gathering steam. Unfortunately, there’s also a lot of influencers out there suggesting who knows what supplements and techniques that are not really evidence-based. But alongside that, we have keen interest in lab testing and a lot of these things that have real data that consumers really want and need.

Kelly: Yeah, I mean, I can speak from experience. A lot of my girlfriends and I… we talk a lot about this and different supplements, and especially as we go through menopause, what we can do. So, it is interesting that consumers are really driving this conversation.

Terry: Well, and you’re raising a particular interest about women that I think is important because women, for a long time, have felt like their providers don’t listen to them. And especially going into hormonal fluctuations and not feeling good, they don’t want to go to their providers. They might want to go and get hormone replacement, but that’s really all they’re looking for from those providers. They are gravitating to other venues to find out how other women deal with it and how are they going to deal with it in the future.

Kelly: Exactly. Yes. Definitely. So how can healthcare providers and institutions take leadership over value-based care with efforts to create alignments with consumers and business, focus on improvement of access and affordability, and create tailored care models for patients? And what would they need to be and do to accomplish a big change?

Terry: Yeah, I think that’s an excellent question. What would they need to be and do? Providers have had a long history of creating systems without any patient involvement and are not vetted by patients. And so, patients are pretty– they’re pretty mad. It’s more than a level of mistrust. It’s a real feeling that they are not being cared for adequately because they’re not being listened to. And so, I think this whole call center thing– and granted, I live in an urban center. And so, the world I’m involved in doesn’t involve calling your doctor’s office. It involves calling a call center. In this world, concierge medicine is becoming a really big thing for people who can afford to do that because they want to be able to connect. The issue we have with providers and patients is that listening thing is the ability for patients to be met where they actually are and to actually motivate change. Aside from all the surveys which say, “No, I’m totally dissatisfied,” in which you never hear any change. They need to be driven by patients. They’re not driven by patients right now. They’re driven by providers. And providers have a legitimate need to be wanting to practice in a certain environment, have reasonable schedules and all of that. But there needs to be some huge effort aimed at patients to regain the trust of those patients and to fill the space that all these apps and influencers and groups are fulfilling. Sponsor them, for example. Sponsor them, be open to them, be open to health coaching. Don’t close the doors because it’s not a physician who’s providing it.

Kelly: Completely agree. I mean, I do think we need to get the patients more involved in those conversations and directions of where they’re going to be heading. So there seems to have been a real uptick in CMS payment models this past year that have affected providers, especially specialists. What impact do you think this is going to have on value-based care and the whole picture regarding providers taking action?

Terry: Well, I think in terms of the action that is necessitated by these payment models to live within a risk payment and to pay attention, there should be a message that’s being heard by the providers that they need to start getting in action on data, understanding surgical episodes, aligning with providers, working with their patients to understand what their needs are, connecting with primaries. But I haven’t seen that happen yet. I think we’re still in a deer in the headlights phase right here, because even with TEAM, which was the first mandatory payment model that came out and affected the five top types, categories of surgeries, even with TEAM, I thought that providers would say, “Wow, this is really an indicator of what’s coming in the future.” But instead, what cropped up, instead of looking at what was really driving costs of surgeries, which are complications, by the way. It’s about complications. And a lot of those complications can be avoided by better coordination of care and adoption of certain practices like ARIs, evidence-based guidelines and various surgeries, to minimize complications. But instead, we’re seeing providers go to benchmarks to see where they are and see whether they need to do anything. Am I high on the cost scale? Oh, I might need to do a few things. I’m low on the cost scale. Oh, I have room. I’m okay. So, we don’t need to do anything.

And a lot of them are taking a pass on risk this year, which I can understand. They want to practice with risk. But are they using that year for practice? I don’t see it. I see most of them sitting it out and thinking that they can avoid dealing with this, and maybe it’ll just go away. Now, when CJRX came out and it addressed all of the hospitals outside the TEAM hospitals, so now you’ve got a universe of hospitals that are under joint replacement episodic payments. There should be a correction there. Will it happen? Maybe not in 2026. Maybe in 2027. We’ll see. I’m not seeing a lot of activity at the level there should be, especially to focus on the right things. I’m looking at, “Oh, what we should do is cut SNF payments. That’s our big problem.” It’s always, “It’s the other person’s problem. It’s not our problem. It’s not what’s going on with us.” So there needs to be a mechanism. Most of them do not have the ability to look at episodes of care and evaluate what the cost drivers actually are. That’s an immediate need that anybody who’s going into TEAM this year or who’s in TEAM now needs to be looking at, is, “What is driving each of these costs? How do I get the clinical teams advanced in looking at this, engaged? And what can I do as a hospital to improve the risk inside the house, which is infection control and blood control and ERAS adoption?” So, there’s a lot to do, and we’ll see how many hospitals are really taking up the mantle. But I don’t think it’s the majority.

Kelly: I mean, definitely interesting times, and you bring up a lot of really good points. Terry, the lines between the provider-based healthcare system and technology-focused healthcare seems to be blurring. How do you think the introduction of all these apps, including AI bots, testing, and coaching– how are they going to affect the health system? And are we going to see consumers walk away from healthcare in favor of digital technology?

Terry: Well, I think the healthcare system runs the risk of being forever a sick care system. And the healthy people, if they have avenues to deal with their healthcare, they will stay out of it as long as they can. If they don’t have avenues, they’ll go into the healthcare system as a sick person and need to be dealt with. So that’s the risk…that I think healthcare is not grasping the opportunity right now to be able to really sponsor this kind of technology and go in full force, really look at how they can help consumers be literate, the group that’s just under those who are really health-literate and are at the gym and eating well and so on. There’s a group right under them who can be health-literate and who would like to be health-literate. But behind the paywalls of all the journals, they have limited access to be able to be health-literate. And that’s one of the first things that healthcare providers could help with.

After that, they can start really looking at the tools to help consumers get the information they need out of their lab tests, out of any kind of health coaching, work with independent groups who have risks to avoid the risks. Everybody’s working with the people who are diabetic right now and people who have advanced cardiology issues and also kidney disease. The whole metabolic syndrome is, of course, throwing everybody into a tailspin of how big and fast it’s growing. But who’s looking at the people with prediabetes right now and growing insulin resistance instead before those things go down the highway? When you’re prediabetic, you are on that highway, and it won’t be too long before it escalates. There needs to be a way of dealing with that, not just with drugs, but with lifestyle behaviors that is working from the healthcare system inside out, not just through apps, not just through other organizations, but through the traditional healthcare system if they want to have a system that is not just sick care in the future.

Kelly: Yeah, I completely agree. You’re right. We do have a sick care system right now, and a lot of these things may definitely keep it that way. Well, thank you, Terry, for sharing your insights with us on impact of failure to progress and value-based care on healthcare system and patients. If a listener wants to learn more or contact you to discuss this topic further, how best can they do that?

Terry: Well, the best way to contact me is through email, which is Hush, H-U-S-H, at, and it’s Roji, R-O-J-I, Health Intel, I-N-T-E-L, dot com.

Kelly: Awesome. Thank you for providing that. And thank you all for joining us for this episode of The Hospital Finance Podcast. Until next time…

[music] This concludes today’s episode of The Hospital Finance Podcast. For show notes and additional resources to help you protect and enhance revenue at your hospital, visit besler.holdings/podcasts. The Hospital Finance Podcast is a production of Besler Holdings.

If you have a topic that you’d like us to discuss on The Hospital Finance Podcast or if you’d like to be a guest, drop us a line at contact@besler.holdings.

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