Managed Care Changes Coming Slowly

By Kindred Healthcare


 Franke Elliott, Chief Managed Care Officer, Kindred Healthcare Franke Elliott, Chief Managed Care Officer, Kindred Healthcare


The ground is changing beneath the nation’s healthcare system. To survive and thrive, Kindred brought in Franke (pronounced Frankie) Elliott in August as its Chief Managed Care Officer. His message: Things will change, but “we can’t move overnight.”

It will take time and be disruptive while experiments and pilot programs are carried out at Kindred operations before making big changes, warned Elliott, who has worked in the healthcare industry, particularly in the area of managed care, for almost 20 years.

In the meantime, however, Kindred will be building capabilities for the future and demonstrating success “before a fundamental shift in policy,” Elliott said.

The changes driving this:

  • An aging population and expansion of Medicaid
  • Payors (Aetna, Cigna, Humana, Wellpoint, United Healthcare) are more concentrated.
  • Payment innovations like advance payment ACOs and bundled payment
  • A shift in delivery of care away from acute settings
  • Growth in performance and value-driven contract pricing
  • Growth in risk-bearing capabilities (clinical care capabilities)
  • Healthcare will become more retail – increase cost/quality transparency.

“Today’s payment strategy is built around a fragmented delivery system” – a pay for services model, Elliott said.

In the commercial market, (individual and small group) insurance exchanges are being used to standardize choices. “There will be smaller networks – if there are 20 hospitals in a city, you don’t need access to all of them,” Elliott said. In mid-market and large groups, there is more price and quality transparency. Wellness is rewarded, and there is chronic care management. Healthcare is moving toward physicians being rewarded for clinical outcomes.

Elliott said Kindred will evolve into a more data-driven organization. “But we’re swimming in data now – the question is, ‘How can we manage it?’” Doctors, he said, are driven by data they can see. But “there will be winners and losers,” he predicted. “Primary care doctors will be moving to shrink their networks. If they examine their data -- data doesn’t lie -- they may see that one of the orthopedic surgeons they send patients to always orders an MRI.”

The change may be painful. “There will be very tough decisions,” he acknowledged.

Franke Elliot