A Strategic Approach to Preparing for Pay-for-Outcomes

Share on Facebook
In a session at the American College of Healthcare Executives’ 2013 Congress on Healthcare Leadership on March 13 in Chicago, Caroline R. Piselli, RN, MBA, clinical and economic research manager, 3M Health Information Systems; Nancy G. Levitt-Rosenthal, MPH, senior vice president, Greenwich (Conn.) Hospital, part of Yale New Haven Health System; and Sydney Ross-Davis, MD, CMO, North American Medical Management-Illinois, a subsidiary of Optum, discussed best practices for developing an accountable continuum of care.

The presenters began the session by discussing the current impetus in healthcare to reform delivery models toward value-based, coordinated care. The Patient Protection and Affordable Care Act created a number of initiatives to drive value-based care, including CMS’ accountable care organization programs, the Bundled Payments for Care Improvement program and the Comprehensive Primary Care Initiative, explained Ms. Levitt-Rosenthal. Although the programs differ, they share the goal of quality improvement and cost savings through better coordinated care. All three also begin to shift risk to providers. “Over the continuum of time, risk has shifted from payors to providers,” she said.

Regardless of the combination of specific models health systems participate in, systems will be required to increase quality, reduce cost and better coordinate care. For health systems moving toward pay for outcomes, there are four core pillars of any pay-for-outcomes model, said Ms. Piselli.

  • A strategic/administrative business model that promotes value through participation in ACOs, bundled payments, capitation, etc.  
  • Care management through real-time information on patients, targeted interventions and care protocols.
  • Data analytics that provide insights to inform care management.
  • Infrastructure, both in terms of IT and process, that support evidence-based, coordinated care

Once these four core pillars are in place, health systems can begin to target performance improvement efforts for those procedures or conditions that have the greatest impact. To do this, focus first on care episodes that are high volume, high cost and have a high level of variation, because these episodes have the highest potential payment impact, said Ms. Piselli. For example, a high-cost DRG with a high volume and high avoidable costs (such as complications, readmissions, etc.) should be prioritized.

Mr. Piselli encouraged leaders to ask the following questions about their health systems to assess readiness for pay-for-outcomes initiatives:

  • Do I have a risk adjusted episodic and potentially preventable event and service toolset and method?
  • Can I identify areas with outcome variations and the largest savings?
  • Do I have a way to monitor and predict performance?
  • Do I have outcome measures and comparative data?

Getting physicians onboard

Next, Dr. Ross-Davis discussed tips for gaining physician engagement for the work required to build competencies for outcomes-based payments. She started by explaining the current state of healthcare for physicians, which includes:

  • Fee-for-service payments, which encourages volume not collaboration
  • No integrated care delivery approach
  • Lack of trust among healthcare entities
  • Lack of reliable support for providers to innovate and oversee care outside their offices

The future state will be much different, characterized by:

  • Better educated and informed patients, regardless of socioeconomic status or ethnicity
  • The patient as the center of the healthcare delivery system
  • Totally restructured payment approach

The challenge now is how to move providers from the current state to the future state. Dr. Ross-Davis offered thee potential solutions:

  • Honor the experience and reality of providers to get them engaged
  • Provide long-term consultative support and tools
  • Leverage physician champions

Dr. Ross-Davis brought the session to a close by noting that the “microsteps” required to carry out these solutions, “like politics, is local.”

More on the ACHE Congress:

Innovating for Impact: 4 Stages for Creating Value in Healthcare
Executive Compensation: 9 Things Every Hospital CEO Should Know
Becoming a Virtuous Healthcare Organization: It Starts With Avoiding "Blamestorming"

© Copyright ASC COMMUNICATIONS 2012. Interested in LINKING to or REPRINTING this content? View our policies by clicking here.