Hayes' Healthcare Blog

Are You Ready for Value-Based Care? 7 Things to Consider

Posted by Strategic Planning Team on August 9, 2017 at 9:00 AM

MACRA took effect in January and the march to value-based care (VBC) continues. According to the 2017 Healthcare-Strategy-1.pngHealthLeaders Media Value-Based Readiness Survey, healthcare organizations have been making steady progress in getting ready for the transition.

Three quarters of respondents say their level of preparation is “strong or somewhat strong” up from just over half who made the same claim a year ago. Two thirds report their infrastructure preparation for value-based care is “strong or somewhat strong” up from less than half a year ago.[1]

While a majority of hospitals and physician practices appear to be well on their way to successfully making the transition to value-based care models, there remains many other organizations who still have work to do. Here are seven things to consider as you continue to assess your readiness for the shift from fee-for-service to VBC.

  1. Focus on clinical care

At the heart of the shift to VBC is the goal of providing higher levels of care to patients. You will need to develop a series of protocols that all physicians must follow to reduce variance in the delivery of care.

Determine whether you have the correct number of primary care, specialists and network physicians. Evaluate your network, emergency department, and contracted services such as lab and radiology. It’s also important to have an ongoing education program to bring all providers up to speed on the requirements of VBC.

Managing population health is also key. You need to be able to track patient groups, protocols for managing high risk and chronic condition populations, and identifying which groups would most benefit from preventative measures and education.

  1. Drive ongoing quality improvement

Measuring quality is a key element in a VBC model. This requires extensive data collection and analysis and the ability to provide evidence that each of your quality indicators is related to improved health outcomes. Determining the appropriate scope, method, and frequency of the data collection is critical to providing that evidence.

Focus your improvement activities on areas that are high risk, high volume, or problem prone. VBC requires proof that you are conducting distinct performance improvement projects and that those projects are proportional to the scope and complexity of your organization’s services and operations.

  1. Review your technology infrastructure

As with most initiatives, appropriate use of technology will play a key role in making the switch to VBC.  The new models require capturing, processing, analyzing, and reporting data on a wide range of clinical measurements. In many cases, tracking incentive-based payments will mean a significant upgrade in your IT systems to ensure you collect and report the right data at the right time.

Many organizations are hamstrung with legacy systems and EHR’s that don’t easily communicate with each other. VBC models require aggregating data from all care settings, including third party providers. You will also need to have a data warehouse to enable reporting on outcomes, costs, quality, and patient experiences.

Most EHR’s were developed in a fee-for-service environment and act more as documentation tools focused on workflows organized around providers, not patients – a key difference in a VBC model.

As you prepare to move to VBC, review your systems to determine what upgrades and new systems you will need to meet the new demands.

  1. Evaluate the financial impact

Determining how value-based care will impact your organization financially is a crucial step when assessing your readiness. Nearly every aspect of your organization will be affected and it’s critical to identify and understand how the change will affect each.

Negotiating contracts as you move from fee-for-service to value-based care is especially important since this has the greatest financial implications for your organization. Since VBC contracts are based on shared savings, tracking of and reporting on performance becomes critical. This means incorporating a level of sophistication in system infrastructure and business office operations that are not necessary in a fee-for-service environment. Begin planning now to meet the advanced requirements of at-risk contracts.

  1. Ensure your organization’s revenue integrity

VBC promises to have the most significant impact on your revenue stream. Evaluate your processes and tools to ensure optimum revenue integrity now before moving to VBC. Compare your revenue cycle metrics to regional and national norms. Assess all three revenue streams – front end, mid-cycle and back office - for the types and scope of current revenue leakage. You should also look for potential waste in staffing or overhead.

If you haven’t yet shared with staff the impact of VBC and how they affect key cost drivers, now is the time to begin. With their input and help, look to implement initiatives to streamline operations to reduce costs. Be prepared to identify and document services patients are receiving and establish processes to track your financial performance for each defined population of patients.

  1. Understand and control your cost drivers

The goal of VBC is to deliver better care outcomes at reduced costs. To meet that demand, you should develop an ongoing efficiency and cost reduction program if you don’t already have one in place.

The program should include understanding your cost to deliver a unit of care and the ability to evaluate the cost implications of moving to a VBC model. This requires a working knowledge of the various cost savings models that support VBC such as shared risk, shared savings, and capitation. Your entire organization including billing and revenue cycle staff will need to be educated on the concepts and impact of VBC.

  1. Leverage available help

There are a number of programs available to help you make the leap to VBC including Chronic Care Management (CCM), Patient Centered Medical Home (PCMH), Physician Quality Reporting System (PQRS), Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS), The Joint Commission (TJC), American Osteopathic Association Healthcare Facilities Accreditation Program (AOA/HFAP) and others. Getting involved in these programs will help get you headed in the right direction.

You can also engage third party consultants to help you prepare for the transition. Hayes has developed a tool for organizations that are planning for their move to VBC. We can conduct a comprehensive VBC assessment that will help you set a firm foundation for the new model.

Moving to VBC represents a dramatic change for most organizations, but one that is fast approaching. If you don’t fully understand the risks posed by your patient population you could suffer a significant negative financial impact going forward. Now is the time to prepare.

For more in-depth information, download our roadmap, Assessing Your Readiness for Value-based Care: 7 Key Areas to Focus On.

Hayes ROADMAP - Assessing Readiness for Value-based Care TN.png

Download Roadmap

[1] Value-Based Readiness, by Jonathan Bees, May 9, 2017, HealthLeaders Media

Topics: strategic planning, value-based care

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