Want to Bend the Cost Curve? Let's Look at Specialty Care.

Healthcare costs appear to have no ceiling. High inflation, clinical workforce shortages, and expensive new treatments have put medical expenses on a 7% growth curve, driving employer premiums to nearly $24,000 per year. Healthcare payers are also facing the squeeze. An aging population, resumption of procedures postponed by COVID, and rises in home health care have produced sky-high utilization rates, market warnings, and stock sell-offs across the board.

In an attempt to get a handle on things, insurers are exploring the use of value-based care (VBC) models in specialty care. VBC programs have reduced costs and improved patient health outcomes in primary care, but specialty medicine is where most spending goes due to frequent appointments, complex imaging, expensive drugs, and high rates of hospital stays. Meanwhile, patients with complex conditions often experience disjointed care, split across multiple specialist providers, inpatient physicians, and primary care doctors.

These costs and complexities accrue to make it incredibly difficult for the average specialty provider to develop and execute value-based care programs that meet patients’ needs and reduce costs. Few specialty practices have the resources and the risk tolerance required.

That’s why innovative payers are beginning to embrace third-party organizations, working in tandem with physician groups, to provide support services and share risk. These specialty care partners bring a fresh approach to healthcare, one less encumbered by the constraints of fee-for-service billing infrastructure. And people are starting to wonder: Is this finally the change that we need?