Getting value out of a purchase or investment can certainly be satisfying, especially at a time in the United States when the consumer price index is at its highest point in nearly 40 years. Consumers are feeling the financial pinch caused by high gas prices, increased grocery store bills and an overall higher cost of living.
Big spending is nothing new for healthcare consumers — the U.S. spends almost twice as much as the average developed country. The increasing focus on price transparency is helpful, but the country still has a long way to go in reducing its healthcare expenditures.
The Federal government previously introduced initiatives to reduce healthcare spending, the most notable of which is the move from fee-for-service (FFS) to value-based care (VBC). As all healthcare providers are well aware, the goal of this transition is to enhance both financial and clinical performance through incentives.
Easy enough, right? Not so fast.
Although providers who utilize value-based care will most likely enjoy a more sustainable healthcare organization, not all have the capabilities necessary to make VBC payments work smoothly. They must first understand the value-based programs they are pursuing, the risk of loss and their ability to operate within the one they choose.
Barriers to Value-Based Care
The Centers for Medicare & Medicaid Services (CMS) Innovation Center has launched multiple value-based payment models, primarily centered on helping patients recover from illnesses and injuries more quickly and avoiding the onset of chronic disease in the first place. The expected result is fewer doctor’s visits, medical tests and procedures and less money spent on prescription medications.
Newer payment models incentive value, emphasize patient needs and permit providers to address social determinants of health (SDOH) and disparities across the healthcare system. Designed to prioritize the use of the most expensive aspects of healthcare for when they’re most necessary, they are expected to generate millions of dollars in savings and revenue.
These VBC payment models sound clear and concise, so every provider should easily be able to use them. Wrong again.
In 2020, 97 percent of U.S. doctors relied on fee-for-service and/or salary for their compensation, while 36 percent also drew compensation from value-based payments. More recently, a study published in JAMA Health Forum found that volume-based compensation was the most common type of base pay for more than 80 percent of primary care physicians and over 90 percent of physician specialists.
There is some progress, though. According to data from the Health Care Payment Learning & Action Network (LAN), 40.9 percent of U.S. healthcare payments, representing approximately 238.8 million Americans and over 80 percent of the covered population, stemmed from value-based reimbursement models last year.
One might ask why more providers aren’t keen on quickly adapting to a value-based care payment model, especially when there are numerous benefits, including:
- Reduced duplication of services
- Enhanced patient involvement in care
- Reduced healthcare costs
- Sharper focus on the clinical need for procedures
- Reduced hospital readmissions
- Improved ability to address SDOH
- Expanded care delivery
- Better management of disease
- Reduced reimbursement for adverse events
- Enhanced focus on population health
- Improved health of patients with chronic conditions through evidence-based medicine
- Expansion of services that might not be traditionally reimbursed under fee-for-service models
Unfortunately, it’s not unusual for providers to encounter barriers to adopting a VBC payment model, whether it is challenges with technology interoperability or difficulty collecting and reporting patient information. Some are challenged by unpredictable revenue streams and shifting policies and regulations. Others don’t have the pieces in place to appropriately measure the value-based care they’re striving to provide.
Applying Technology to Track Progress
What’s the solution for providers who don’t know where to start in the change to value-based care? How can they track their progress? There are many ways, and they don’t have to be complex or costly.
For example, providers can use advanced analytics to better measure and improve outcomes and augment care coordination. This data can then be used to improve overall provider performance and reduce risks.
Another recommendation is promoting interoperability by connecting and integrating disparate healthcare IT systems, which allows providers to communicate and collaborate more quickly and easily with other clinicians. The result? An increased focus on evidence-based medicine and a reduction in duplicate tests and procedures.
Some digital technologies give providers the ability to improve the process of identifying populations for whom feedback is most needed, including individuals with multiple chronic conditions and those negatively affected by SDOH. This is a valuable way to promote patient-cared care.
Such digital health tools also enable healthcare providers to measure their progress in the move to value-based care. They provide the resources to track key performance indicators (KPIs) that identify any areas of weakness that need to be improved. Calculating these metrics allows providers to gain insight into their specific performance and compare it to pre-determined benchmarks.
Three of the important KPIs used to assess progress in the value-based care system are readmission rate, patient-reported outcomes and patient experience or engagement.
Readmission Rate
Providers with high readmission rates often suffer from procedural gaps in patient care, negatively affecting patient outcomes and producing expenses that aren’t necessary. Through digital technology, they can more accurately track their readmission rate and use an EHR to help them identify patients at the highest risk for readmission.
Patient-reported Outcomes
The goal of measuring patient-reported outcomes (PROs) and rewarding performance on the basis of them is to encourage clinicians and organizations to adopt procedures that improve outcomes experienced by patients. PROs as a KPI are important because they assist patients and their providers in making informed decisions about healthcare, setting policies for coverage and reimbursement of health services and improving the quality of healthcare services.
Patient Engagement
For those providers who want to hasten their shift to value-based care, tracking patient engagement is essential. One way to do so is through the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey, an industry standard for examining patient satisfaction and experience. These surveys are tied to certain aspects of value-based reimbursement and offer valuable insight to providers.
These recommendations don’t equate to the perfect formula for achieving total success in value-based care. They do, however, offer effective solutions provider organizations of all sizes can utilize to measure their progress in reaching that goal.
Are you part of a medical group that needs help in your transition to value-based care? If so, schedule a meeting with us to find out how we can help you reach that goal.
