Healthcare organizations around the country are implementing value-based care strategies that focus on patient outcomes rather than the volume of healthcare services they deliver.
The fee-for-service model – the status quo for years in the U.S. healthcare industry – tracks each consultation, doctor appointment, procedure, hospital stay, and other medical event for purposes of payment for services rendered. That, critics say, promotes the use of more tests and treatments, some of which may be unnecessary, raises medical costs, creates inefficiencies and waste, and can even encourage fraud and abuse.
On the other hand, value-based care, which will fundamentally change how health care delivery is organized, paid for and received – sets the stage for a reimbursement and payment model that rewards better outcomes and lower spending. The hope value-based care will reduce health care costs, increase the quality of care and improve the patient experience.
Despite the benefits of value-based care, fee for service reimbursement still dominates. The percentage of healthcare organizations that have a significant percentage of revenue subject to value based care is still relatively small, and the shift to value-based care models is taking longer than expected. In a 2016 survey conducted by the HealthLeaders Media Council, while 94 percent indicated that they moving to or already using value-based care models, only 27 percent had completed pilots or are at some stage of rollout. And a Deloitte 2016 Survey of U.S. Physicians that queried 600 primary care and specialty physicians found that more than 8 in 10 physicians were being compensated under fee-for-service models or salary. The survey found that although physician participation in value-based payment models was on the rise, the uptick was small: 30 percent in 2016 vs. 25 percent in 2014.
So, what can health care organizations do to expand the competencies needed to succeed in standardized, value-based care when so much of their current business is still subject to a fee-for-service incentives? Here are some tangible steps to ensure your organization is ready as value based care expands.
Innovate with an ACO
Accountable Care Organizations (ACOs) are just one of many emerging and evolving reimbursement models that are moving U.S. healthcare away from a fee-for-service, pay-for-volume approach and towards value-based payment models. ACOs are sets of healthcare providers — including primary care physicians, specialists, and hospitals—that work together collaboratively and accept collective accountability for the cost and quality of care delivered to a population of patients.
Many health systems have formed or affiliated with ACOs as a way of building competencies in value-based care. An advantage an ACO is that it can break down the fragmented care silo by integrating disconnected care silos and technology and replace it with an integrated platform that spans most or all of the key components of the healthcare delivery system. ACOs receive claims data for their members across care settings - for facilities they own, as well as their partners and competitors. Kaiser Permanente is often held up as an example of what can be accomplished through a fully integrated model. ACOs, using their own claims data, can provide similar visibility and incentive alignment. ACOs can apply analytics that identify high risk patients and provide valuable insights into variations in care patterns to correct problems that span episodes of care.
Wire up your network
Too often, healthcare providers have poor visibility on where patients receive services outside of their facilities. To be successful with value-based care, there needs to be better and timelier visibility of the clinical outcomes and costs for patients that flow through each care setting. Only by sharing data across a network of providers, including hospitals, post-acute care, physicians, outpatient clinics, social service agencies, pharmacists and other community-based organizations, can care activities be linked to outcomes. Claims data has value in identifying systemic problems, but they arrive too late to enable proactive interventions to head off problems. More timely data exchange between providers that coordinate care for the same patients is essential to reduce gaps in visibility and improve care coordination and care transitions.
Voluntary bundle payment programs
It seems likely that the Trump administration may slow down or even halt mandatory bundled payment programs, such as CJR. However, while some hospitals pull back, others will see an opportunity to expand through voluntary bundled payment programs grab market share. As with ACO participation, bundled payments give providers access to claims data that offers valuable insights into practice patterns and costs. Bundled payments model requires providers across the care continuum to coordinate more effectively, and provides visibility to determine the most effective treatment protocols.
Bundled payments provide organizations aligned incentives to adopt data-driven technology that integrates care silos into a coordinated network so patients can be tracked as they move from one provider to another, and so clinical and economic outcomes of bundled payment partners can be measured. For example, you’ll have to know how your networks’ bundle costs compare to competitors’, and that will require bundled payment analytics. And to effectively monitor patients across care settings, you’ll have to connect and analyze real-time data culled from network partners so you can flag patients that require special attention or are high risk. Predictive models leverage data markers to match patients to appropriate interventions to mitigate risk factors that can result in readmissions, un-planned emergency department visits and other adverse events that negatively impact outcomes and performance.
It is important to note that a successful bundled payments model requires processes for continuous improvement. Claims data can enable a learning loop around systemic improvements in standardizing care patterns, and real-time lets network partners actively collaborate in managing a care event. And predictive analytics enables pro-active interventions for at-risk populations.
Neil Smiley, Founder and CEO, Loopback Analytics
Neil Smiley, a serial entrepreneur with a passion for transforming healthcare with data-driven solutions, founded Loopback Analytics in 2009, a leading SaaS Population Health Analytics Company.. Prior to founding Loopback Analytics, Smiley launched Phytel, a population health solutions company acquired by IBM as part of their Watson Health Platform. Smiley began a consulting career with Accenture and later as a partner with EY, working with Fortune 1000 clients. Smiley holds a computer science degree from Dartmouth College.
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