The health system C-suite gets bigger: Step into the 'value management office'

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As hospitals and health systems implement more value-based payment models, such as bundled payments, many could benefit from a "value management office" that oversees the development of all capabilities and information for value-based initiatives, according to the Harvard Business Review.

A value management office can guide in the implementation of hospitals' value agenda by serving as a center for excellence while overseeing cost measurement and management, setting priorities for improvement projects, facilitating the creation of value-based payment models with employers and insurers and making sure new health IT platforms to are aligned with the value plan, according to the report.

Some healthcare leaders may worry that a new office will increase bureaucracy and corporate overhead when they are already concerned with cutting costs. However, such an investment could lead to accelerated implementation of value improvements with better outcomes, more efficient processes and lower costs across the organization, according to the report.

"It makes much more economic and operational sense to create and leverage a central cadre of professionals than to ask each clinical unit, on its own, to acquire such expertise," the authors wrote.

One hospital that has pioneered the valued management office is MD Anderson Cancer Center in Houston. MD Anderson established its value management office, the Institute for Cancer Care Innovation, in 2008. It is staffed with five full-time employees and three part-time graduate students. Faculty and staff from the hospital's 11 cancer center practice units are often called in to work on ICCI projects, according to the report.

The ICCI focuses on measuring outcomes related to value-based reimbursement contracts. In 2010, it developed a time-driven activity-based costing system, a method for measuring the costs of a patient's medical treatments across the care cycle. The ICCI launched a pilot and provided the leadership and resources to scale the approach across the entire organization.

Since then, the ICCI has been responsible for integrating outcome measurements and reporting into MD Anderson's EMR system. It inputs outcomes and cost data into MD Anderson's enterprise data warehouse, which supplies important information for clinical care and research. According to HBR, ICCI led negotiations with one of the hospital's largest commercial insurers to adopt the first cancer care bundle in the U.S.

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