While the industry’s eyes remain fixed on the nation’s capital to await regulatory adjustments on healthcare provision and reimbursement, one thing is certain. Healthcare reimbursement models will shift gradually from the traditional fee-for-service to a value-based system. Value-based reimbursement strives to link payments to patient health outcomes.
According to the Healthcare Financial Management Association, “It requires a proactive clinical focus, in which patients at high risk for disease progression are identified for early intervention, patient education services are expanded, care is coordinated across sites and specialties, and redundant, non-evidence-based treatments are eliminated—all with three key objectives: making patients healthier, providing high-quality care, and reducing the total cost of care.”
Forward-looking hospitals, clinics and physicians are selectively moving forward with value-based contracts to ready their practices for the impending change. The Center for Medicare and Medicaid Services instituted episode-based payments for selective procedures, thereby creating the need for all affected providers to navigate payment allocation. Capitation models deliver a fixed amount of money to care for a defined patient population. Today, however, most opt for a shared savings model that provides incentives to reduce spending on defined patient populations.
These models all place new demands on a practice, motivating practitioners to:
- Broaden their vantage point from individual to population health management while gaining insights on the predictors of desirable and undesirable outcomes
- Develop evidence-based clinical programs that produce consistently favorable health outcomes for the patient population
- Optimize workflows to deliver the right care at the right place at the right time
- Build the analytical framework and measurement tools to assess performance and drive continuous improvement
- Manage costs while providing appropriate care
- Evaluate current and expected returns from investments made in the practice
While few payors require value-based contracts, early experience with the new paradigm pays dividends today and sets the practice up for success in the future. The following steps can help you get started.
1. Identify one or more disease states to treat based on your patient population.
These states – such as juvenile diabetes, asthma or obesity – should affect enough patients to warrant development of new treatment protocols, processes and measurements. They should also represent areas in which you are confident in your ability to deliver substantive improvements in patient outcomes.
2. Establish treatment protocols and processes.
Leverage evidence-based research and your clinical experience to devise treatment protocols and processes for everyone in the practice to follow in addressing the target disease states. Define appropriate metrics to assess patient outcomes and enroll staff in raising the bar on quality of care. Measurement encourages participation and holds staff accountable. Make sure each metric is actionable, has a clear tie to the objectives you wish to achieve, and can be tracked and reported accurately.
3. Negotiate a shared savings clause.
Work with one or more of your payors to establish a shared savings clause within your contract. It will not disrupt the current fee-for-service payments but will offer an additional financial benefit to both parties when mutually agreeable objectives are realized. Use your advanced preparation work to advocate for the right number and types of performance metrics in your contract. Ideally, focus on measures where you’re performing strongly right now.
4. Create baseline measurements.
Identify all the patients affected by the target disease states and establish baseline measurements of their conditions. Adjust their treatment as needed. For example, make sure they’re attending well visits, managing their medications properly, and getting immunizations. Provide diet and lifestyle education where appropriate to help patients take charge of their health outcomes.
5. Continue improving.
Routinely inform the entire practice of the results of value-based measures. Shore up gaps in adherence to the new treatment protocols and processes. Discuss opportunities to make improvements and institute the most promising suggestions.
6. Push for quality measures and metrics in all of your payor contracts.
Payors are generally open to collaborating on what measures to add to contracts so be sure to provide your input. The more standardized measures you have across your payor contracts, the easier it will be for everyone in the practice to manage.
Most practitioners find it isn’t as hard to move forward with a value-based payment model as they’d originally feared, and have seen reduced healthcare costs while improving patient outcomes. As you make your transition to value-based healthcare, be aware of the following obstacles that could impede success:
- Failure to foster a culture of continual learning and improvement
- Lack of resources to develop the proper analytical framework to measure and report outcomes
- Inability to evaluate and take action on insights provided by the performance measurements
- Fear of looking at what the data conveys and having to revise prior decisions
We are happy to lend our expertise in contract negotiations and help you develop the proper internal systems and controls to achieve your objectives with implementing value-based reimbursement. By starting small today, or improving on what you’re already doing, you’ll be in a good position to thrive in the future.
If you have any questions about the implementation of value-based reimbursement, contact our team here.