We all know that finances can ignite a powerful shift in focus. But is the anticipated value-based payment powerful enough to move an industry from focusing on episodic care to managing "health"? To really change the future of health care delivery, we must integrate financial risk management across the continuum of care. For the survival of our health system, we need to get off the treadmill of fee-for-service medicine. Sentara Healthcare is strategically well-positioned to adapt to this change. We call the journey from volume- to value-based payment, "Transformation of Care."

Creating "value-defined populations" enables health care professionals to identify risks, understand their specific needs, analyze utilization and collaborate to improve care. Population segments can include a specific group of chronic disease patients with high hospital use/high cost history, employers' covered lives, seniors or even healthy groups. Sentara has two goals in mind [see illustration this page]: (1) Keep the population healthy by preventing upward movement into the less healthy portions of the pyramid; and (2) maintain the health of those at or near the top of the pyramid by working to drive them downward into healthier categories.

Once the population is defined, we can accomplish our goal of patient-centered care collaboratively by delivering the right care, by the right caregiver, at the right time, in the right place, and at the right cost (as defined by payer or by patient). It is essential to create a safe space to design, test, evaluate and invest in small-scale pilot projects that are then implemented on a large scale.

Sentara is well-positioned for the future with more than 30 years of experience accepting financial risk for populations through our insurance plan, Optima Health. After launching Optima in 1984 to diversify our portfolio and gain the capacity to evaluate the population's health, we have grown to more than 450,000 members in Virginia, with a large commercial business as well as Medicaid managed care.

However, health care systems without their own health plans may want to consider developing one, or joint venture with an existing insurance plan (regional or national) to participate in the new economics of health care. Optima is working with other care delivery systems outside of Sentara to help it meet future challenges. Premium management, data analysis and adjudicating claims are complex, but the biggest advantage is combining the skills of a good financial risk manager with redesigned components of clinical delivery systems.

How do we achieve the best possible health for a population while managing risk? The answer lies in what the industry has been waiting for — the collaboration of key stakeholders. Our newly formed clinically integrated network, the Sentara Quality Care Network, represents a collaboration of employed and community physicians, our care delivery system, Optima (the financing mechanism), and other payers to set goals, prioritize, measure outcomes and standardize best practices to improve the quality of patient care and, of course, reduce costs.

This doesn't happen overnight. Transformation of care is a continuous journey. Sentara consistently strives to provide the best care with the best outcome at the best cost.

David Bernd is CEO of Sentara Healthcare in Norfolk, Va.