Value in healthcare: Where outcomes meet dollars

Quality permeates all aspects of healthcare through an expanding, dynamic ecosystem of mechanisms and stakeholders. Despite the unknowns in healthcare today, here’s what to expect.

Quality in healthcare is more important than ever, evolving into an integrated and expected component of the holistic healthcare landscape. Historically, cost control was the gold standard to prove value. However, a growing emphasis on outcome optimization has led to an increase in quality-driven policy, patient and provider centric systems, alternative payment models, and improved use of data and technology.

As new mechanisms to drive quality are emerging, traditional stakeholders are expanding beyond their typical roles, and opportunities for collaboration and strategic partnerships are becoming increasingly prevalent. Quality can no longer be considered a siloed practice – it is an imperative and integral component of healthcare planning, policy, and innovation.

Key drivers in the quality landscape
As the quality ecosystem becomes more complex, the list of mechanisms for defining, measuring, and delivering quality continues to grow. Quality measures, likely the most widely recognized, and commonly used mechanisms, were developed as a solution to drive better approaches to care, and ultimately, to improve outcomes for patients. But additional mechanisms such as alternative payment models, enhanced patient tools, pay for performance, and pay for reporting are making their way to the top of the list of things that healthcare stakeholders must consider. The direction of the healthcare ecosystem moves patients to the center of the care model and introduces new stakeholders to support different modalities of care. The expanding list of players means providers, payers, life science companies, policymakers, digital health companies, and quality organizations are all driving toward a patient-centered care model.

A shifting incentive model
The evolution of care, driven in part by changes in policy, is forcing payers to address rising health care costs and improve quality. While value-based payment models are still evolving, many providers are now trying to meet emerging requirements while operating within fee-for-service payment models.

One example, according to a 2015 Deloitte Insights report, is the Medicare Shared Savings Program (MSSP), which mandated that providers measure performance on an annual basis, tracking various measures. The program required robust technology infrastructure for which providers must financially invest and train staff to use properly, all of which can be costly and time consuming. More recently, the CMS (Centers for Medicare and Medicaid Services) passed MACRA, which will push providers to consider moving into an advanced alternative payment models to drive improved care and outcomes. However, beyond government programs, some payers are utilizing pay-for-performance (P4P) and pay-for-reporting programs to incentivize providers through value-based contracting, incorporating varying levels of payment risk based on patient outcomes and experience.

Strategic partnerships
As the healthcare landscape becomes increasingly complex, some stakeholders are finding the need to invest in IT infrastructure and staff training, both costly and time-intensive endeavors. Small providers are struggling to make these investments due to limited resources. To meet these challenges, more companies are exploring strategic partnerships, aiming to mitigate costs and deliver a unique value-proposition through consolidation or joint ventures. These ventures cover a spectrum of offerings including enhanced care accessibility with retail pharmacies teaming with retail clinics, and expanded capabilities with digital health companies and payers joining forces to increase transparency of outcomes and cost.

While consolidation may seem like a practical approach to meet new quality requirements, a Harvard Business Review report indicates growing concerns that consolidation will eventually drive up costs for those purchasing healthcare services, which could compromise the integrity of value-based care. For example, if an individual provider merges into a larger network, the network’s share of the health market increases allowing the network to charge insurance companies higher fees for services. The result is that the burden of cost would fall to patients and the lack of competition removes incentives to improve patient outcomes.

Elevating the patient experience
Despite the challenges providers and payers are facingthere is opportunity to elevate the importance of outcomes and the patient experience. The accessibility of public data reporting outcomes and quality is in-part, elevating a patient-centric mentality that promotes empowered decision-making. The expanding use of such data is expected to lead to more collaborative, coordinated care that may help improve the patient experience, also paving the way for new industry players such as telecommunications companies and retailers to bridge gaps in care. As traditional stakeholders are faced with expanding patient needs, the healthcare ecosystem will continue to seek those who can improve patient access to care.

What to expect next
While quality’s role expands, many elements of value-based and patient-centric care are still evolving. The impact of emerging quality trends on patient outcomes (e.g. value-based payment requirements, the growing role of patient gathered health data and tools to measure patient outcomes, and an increased number of provider partnerships) are still largely unknown. However, the common theme among these trends is to drive value-based, high quality care. In fact, improved quality as the impetus for healthcare policy, planning and innovation is seemingly unwavering.

Watch for key policy impacts of the current administrations’ prioritization to repeal key elements of the Affordable Care Act, the medical community’s push to focus MACRA on moving to advanced alternative payment models, expanding joint ventures bringing traditional stakeholders like payers into new spaces and programs, and continued advancements in the depth and reach of technology. Quality continues to be on the minds of key players but is top-of-mind for many patients. This will continue to push the ecosystem to embrace and elevate our push for improved value.

About the author:
Min Matson is a Senior Director with Point B, an integrated management consulting, venture investment, and real estate development firm. He has spent his career dedicated to improving healthcare quality, enhancing access to underserved communities, and connecting quality care to patient outcomes, for providers, payers, and pharma clients.

The views, opinions and positions expressed within these guest posts are those of the author alone and do not represent those of Becker's Hospital Review/Becker's Healthcare. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with them.

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