Question

What are some examples of shared risk models, such as population health, For Rural Hospitals? What are some budgetary and financial implications of shared risk models on health care management practices and decisions for rural hospitals?

Answer 1

We get to see drastic changes in healthcare sector as the trend has been changed from "fee for services" to "value based service "spectrum, that is from volume to value, where the need for shared risk model has emerged, we do have different models which seeks fully align payment and objective measures of clinical care.

Why this model is important and where it lies in value based spectrum?
Operational cost of rural hospital are slightly higher than that of urban hospitals as they are not easily accessible to all kind of essentials. So it's necessary to put a light on value based spectrum,

P4P

PCMH

CLINICAL INTEGRATION

SHARED SAVINGS

BUNDLED PAYMENTS

SHARED RISK

CAPITATION FULL RISK

PROVIDER SPONSORED PLANS

It's important to reduce financial vulnerability in these hospitals and improve access to quality healthcare at affordable price with availability of essential services in rural communities, as most of the people from rural areas are financially weak it becomes essential to provide treatment at reasonable price.
Shared risk models also described as “next-level” of risk arrangements, where provider if service receive performance-based incentives in order to share cost savings which combined with disincentives to share the excess costs of healthcare delivered.
This model is based 2 things
1) budget agreed with a payer
2)calls for the provider to cover a portion of costs if savings targets are not achieved( it can be the percentage of the premium like 50/50 sharing of excess costs).
Their is a direct relationship between risk and reward under this model.