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Understanding the value-based care model is complicated, from following federal reimbursement guidelines to modifying patient care delivery. Many care providers, including hospital leaders as well as clinicians, struggle to identify the ways value-based care (VBC) can benefit their organizations. Even when cost savings and other incentives are apparent, getting buy-in and modifying workflows from the top down is daunting.
In a recent survey from Definitive Healthcare, nearly 45 percent of respondents reported that provider compensation and incentives are the best way to accelerate the adoption of a value-based system. Currently, care providers in 48 states participate in some form of VBC program from the Centers for Medicare and Medicaid Services (CMS). So how can hospital leaders continue to encourage the shift away from fee-for-service (FFS) systems? It starts with clinicians.
Instituting new reimbursement methods is highly disruptive to existing workflows. It involves shifting expectations, alters reporting standards, and puts physicians and other care providers under a microscope. When providers are accustomed to filing reimbursement paperwork based on a fee-for-service model, they are submitting for every test and procedure performed – a difficult habit to break.
We decided to share this five-point implementation plan from Andrew Cousin, Senior Director of Strategy for Mayo Clinic Laboratories and a panelist in our webinar on the future of value-based care.
People are far more resistant to change when they don’t understand why the changes are beneficial. Once facility leaders and decision-makers agree to adopt value-based care delivery, there are several ways to get physicians on board – starting with hard data.
Before you know where to go, you have to know where you are. Facility benchmarking is a key first step in understanding which areas need improvement first. There are several ways to go about benchmarking, from internal to competitive analysis, each with its own advantage. Without initial benchmarking you’ll be flying blind in your quest to improve, focusing on unnecessary areas and overlooking low-hanging fruit.
Some of the most common hospital performance metrics to track include 30-day readmissions, HCAHPS scores, and length of stay. Each of these metrics directly impacts care costs, and benchmarking can show facility leaders which of these areas need improvement and which are models of success.
Shifting to a value-based system is going to be disruptive to our physicians, according to Cousins. They need to understand what they're being measured on, how they can succeed, and the ways in which their workflows will be impacted.
Adoption of VBC has been shown to reduce facility expenditures and overall care costs by emphasizing the importance of preventative medicine. Rather than addressing and “fixing” acute issues, as is customary within FFS systems, physicians are encouraged to look at a patient’s overall wellness to address environmental and social determinates of health. This method can curb the rates of chronic illness and more effectively manage long-term health conditions, keeping patients healthier and reducing costs.
Once physicians are aware of the positive impacts of these changes, they will likely be more willing to acclimate to new workflows, improving your chances of success. The next step is educating clinicians on what they need to do differently under a value-based model, including training on any new technologies and workflows.
Some facilities may choose to implement supply chain management systems to track the most commonly used devices and reduce unnecessary spending. Physicians will need training on how to use this new technology and how to integrate the new expectation into their daily workflows. These technologies can also help to reduce spending on physician preference items by showing pricing and clinical effectiveness between comparable items.
Investing in clinician education up front empowers clinicians to improve on their own, without significant overhead pressure. By solely focusing on outcome without giving physicians the proper tools, facility leaders would be setting themselves up for pushback and reducing the odds of success.
It can be difficult to parse which insights are most relevant to each care facility. For some hospitals, understanding the competitor landscape is key, while others may benefit more from tracking internal spending and performance. This is why initial benchmarking is so critical – knowing which areas need improvement can help ensure you’re not wasting time and money.
Most importantly, each metric tracked should be something that can be improved with a clear plan of action. Knowing your facility needs to reduce readmission rates is great, but understanding that your high readmissions rate is tied to sepsis is even better. Sepsis and other infections can be directly addressed in a way that the abstract of readmissions cannot.
Finally, we come to the alternative payment model. The Hospital Value-Based Purchasing Program works by offering hospitals a single payment per patient per episode of care. If the patient’s care costs less than the CMS payment, the hospital keeps the remaining funds; if not, the hospital has to pay the difference.
The program rewards participating hospitals that perform better than the average, which means this is a zero-sum game. There will be winners and losers, and the market is competitive. According to Definitive Healthcare data, 56 percent of hospitals participating in the VBP program received a positive revenue adjustment – and the remaining 44 percent were penalized.
This is why Cousins says the first three steps are particularly critical to success – and yet this is where most facilities skip and stumble. In glossing over the needs of physicians, facilities are doing a disservice to their patient populations and potentially failing to reach their full cost-saving potential.
Value-based care is only projected to become more popular, and the bar for success will get higher as more hospitals enter the competitive market. Make sure you understand how your hospital compares by accessing the most reliable healthcare intelligence available through Definitive Healthcare. With Definitive’s comprehensive platform on hospitals and IDNs, you can: