First step toward success under bundled payments: Care redesign

Valued-based payments are here to stay. However, as the government and commercial insurers depart from traditional fee-for-service reimbursement models and shift toward care delivery systems that reward value, providers face numerous challenges.

The incentives that encourage certain behaviors among clinicians under fee-for-service — such as rewards for the sheer volume of care delivered versus its value — are not sustainable under a value-based model like bundled payments, yet they persist. Human behaviors do not change on their own because the organization entered a bundled payment contract or agreement.

It is up to leadership to ensure physicians and care teams are empowered and have the proper incentives to support — not sabotage — better patient outcomes at a lower cost.

Ray Herschman, president and COO of Columbia, Md.-based xG Health, explained that until the economics of care delivery align with the incentives to improve cost and quality, the industry will fail to solve its spending problem and falter under bundled payments. "We've been paying for healthcare by the parts, and buying this way inherently drives up costs," Mr. Herschman said during a xG Health-sponsored webinar June 16.

While it is no easy task to redesign care delivery, it is necessary to make value-based pay sustainable. The first step is care redesign.

The importance of care redesign

Redesigning care delivery to accommodate bundled payments is integral for reliability and consistency, which ultimately leads to enhanced predictability of costs, higher quality of care and improved outcomes, according to Kathryn Hayes-Hallowell, principal of bundled payments at xG Health.

"If you're going to commit to taking on bundled payments, we encourage a full commitment, and that means really approaching this care redesign piece," said Ms. Hayes-Hallowell. "When you embrace the care redesign component of bundled payment, you're really putting folks on notice that this isn't just the next flavor of the month. This is actually a new approach to delivering care, and it aligns all of the stakeholders around care delivery."

When some organizations approach bundled payments, they simply hand off the project to the contracting and finance departments, according to Ms. Hayes Hallowell. However, these organizations are usually not as successful as those who take a care redesign approach.

When implementing a care redesign effort, the objective is to improve outcomes and quality through standardization. To achieve standardization, engagement and collaboration with clinicians is essential. Organizations select clinician leaders — someone who has both clinical credibility and the will to guide an organization through change — to keep the momentum going among the clinical workforce.

At the end of a successful care redesign effort, organizations will achieve five key benefits:

  • Non-value-added work is eliminated.
  • Any manual tasks that can be automated are automated.
  • Office visit-related work is designated to other trained non-physician staff.
  • New workflows are incorporated into the provider practice, such as using hardwired reminders and EHR tools to enhance care reliability and efficiency.
  • Patients and families are engaged in their care.

Redesigning care

Best practices

There are a few key best practices to reach the standardization of care that ultimately leads to reliability, consistency and accurate cost predictability.

The notion of using evidenced-based care is often almost an afterthought when it should be a fundamental guiding practice for providers. According to Ms. Hayes-Hallowell, "every patient" should receive evidence-based care "every time."

Current evidence-based best practice elements reduce unwarranted variation in care delivery. xG Health offers a care redesign tool called ProvenCare, which multidisciplinary clinical teams can use to identify and agree on critical BPEs based on current evidence, and then integrate them into practice. Any practice that is not identified as a BPE can be reevaluated for efficiency. Through this process, providers can easily trim nonvalue-added-work from their workflow.

To achieve care redesign, fix outdated incentives

Implementing these best practices to redesign care is easier said than done. To achieve a higher degree of physician buy-in, it is critical to eliminate incentives that do not encourage value-based care. For these purposes, we will call these incentives "faulty," as they will not support an organization's value-based goals.

As organizations adjust incentives for physicians and hospitals, as well as for patients, "it is important to think about and identify incentives that might reinforce behaviors that don't align with value-based care," said Francois de Brantes, executive director of HCI3. Incentives that reward physicians for volume of services, and thereby encourage them to order tests and procedures that aren't completely necessary, conflict with the goals of value-based care.

According to Mr. de Brantes, there is a significant difference between minimizing faulty incentives and maximizing incentives that reward behaviors that will help physicians and hospitals excel under bundled payments. While it is important to do both, it is not enough to only offer physicians new incentives if the outdated ones continue.

When faulty incentives are remodeled to align with economic, clinical quality and patient experience objectives, providers focus more on clinical quality feedback, they are able to better manage the supply chain and they are more willing to engage directly with employers to contract for episodes of medical care, according to Mr. de Brantes.

"The triple aim actually does work when the incentives are designed appropriately and when the clinicians focus — individually and throughout the organization — on true care management and care redesign," said Mr. de Brantes.  

Additionally, payers can engage and encourage their members to shift to higher-value providers. This will continue at a higher and faster rate, especially as private sector commercial payers deploy transparency tools, according to Mr. de Brantes.

When hospitals and health systems effectively minimize volume-driven incentives and maximize incentives that align with bundled payments, providers feel more in control.

"I get emails almost weekly from nurses and physicians whose lives have changed significantly because they're no longer worried about quotas," said Mr. de Brantes.

The patient experience also improves as a result, because patients feel not only that they're engaged in their care, but that they are working in collaboration with physicians and the rest of their care team. Patients and the care team now share the same goal: The best outcomes at a lower cost.

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