The Shift to Value-Based Healthcare and How It Impacts Optimum Reimbursement
One of the core challenges facing healthcare leadership is to ensure optimum reimbursement for the organization. Staying focused on the bottom line isn’t easy, especially when leaders are responsible for everything from culture to quality. Traditional fee-for-service models are being replaced by value-based healthcare. What does this mean for your organization?
What is value based healthcare?
Value based healthcare is a delivery model in which providers, including hospitals and physicians, are paid based on patient health outcomes. The “value” is derived from measuring health outcomes against the cost of delivering the outcomes. Trouble is, over half of providers are not aware of the new measures and value based payment models and what is needed to demonstrate "value."
The healthcare landscape is shifting with new priorities that affect patient care and satisfaction, physicians, and ultimately the revenue streams that organizations depend upon. Here is an overview of how value benefits the entire healthcare system.
Value based healthcare is the foundation used by Medicare to establish their CMS’ Quality Strategy, whose vision is better, smarter, healthier. To reach this vision, they are focusing on:
- Using incentives to improve care.
- Tying payment to value through new payment models.
- Changing how care is given through:
- Better teamwork.
- Better coordination across healthcare settings.
- More attention to population health.
- Putting the power of healthcare information to work
This strategy is leading to a shift in how healthcare is delivered and reimbursed that will affect most organizations.
1. Value based reimbursement regulations
There is a decided shift from volume to value, which will accelerate in light of recent government announcements regarding Medicare payments. As of 2018, 90% of Medicare FFS reimbursement linked either to value-based purchasing or to some sort of quality measure.
According to CMS, the new regulations for Value Based Purchasing (VBP) are based on:
- The quality of care provided to Medicare patients
- How closely best clinical practices are followed
- How well hospitals enhance patients’ experiences of care during hospital stays.
The Hospital VBP program will make incentive payments to hospital based on:
- How well they perform on each measure compared to other hospitals’ performance during a baseline period
- How much they improve their performance on each measure compared to their performance during a baseline period
The reporting measures use a weight of 25% to Safety, Clinical Care, Efficiency and Cost Reduction, and Person and Community Engagement. It is clear that CMS will not only be requiring, but also measuring the effectiveness of organizations and the value they bring to the healthcare system.
2. Proving your value
A second important shift requires healthcare institutions to become low cost, high value providers. To be included in networks, providers will need to transform and prove value, demonstrating that they can deliver high quality, evidence-based care while managing or reducing the cost of care. And they must be able to do this not only when delivering episodic care but also demonstrate that they can manage population health in a cost-effective manner.
In addition to CMS’ quality based measurements, it is important for organizations to find ways to reduce costs without compromising care. One method is to shift low complexity services to lower cost, qualified providers instead of using higher cost specialists. Another method is to have systematic checklists to ensure that patient care exists within a “closed loop”, where the care they receive is complete and documented. Errors are expensive, so ensuring that the right providers perform all necessary procedures is critical.
3. Engaging Physicians
There is also a shift occurring in the way you interact with your physicians, whether they are employed or independent. Giving physicians what they wanted, such as access to the operating room and a supportive nursing staff, is what drove good business and it still is very important.
Now, however, there is an opportunity through physician engagement, whether with employed or independent physicians, to improve patient access, customer service, quality and costs. Establishing a highly engaged physician population allows hospitals to more effectively target the quality and efficiency issues that may help reduce complications, mortality, readmissions and length of stay.
Engagement programs can start with education. Studies show that 50% of physicians have never heard of value-based payments and may not know they are being judged on the quality of the services they provide. It is up to the hospital or provider organization to keep physicians educated about the care they provide and how they will be measured. These measurements may reflect their performance in terms of 1) quality of care, 2) patient experience, 3) resource utilization, and 4) contribution to practice-wide improvement activities. By 2020, value based reimbursement regulations will be in place, so education is vital.
4. Alternative care delivery models
Another shift has been underway for some time now, away from traditional models of care to delivery of care across a variety of settings (pharmacies, retailers, urgent care, telemedicine) by different types of care deliverers (nurses, pharmacists, mid-level providers).
For instance, CVS has expanded the number of Minute Clinics nationwide to serve people who value convenience and affordability, using nurse practitioners to provide are for common ailments. Telemedicine is also growing as patients need access to everyone from general practitioners to specialists, regardless of their location. These services fit the needs of younger generations who may not have a primary care provider (PCP) and require on-demand services. Nearly 45% of people between 18-29 and 28% of age 30-45 have no PCP, according to a Kaiser Family Foundation study.
People have more choice in where they get health care, and more accountability for the financial implications of those choices than ever before. Health system leaders need to decide if these alternative delivery settings will be competitors or partners…or perhaps both.
5. Patient experience is paramount
Finally, there is a shift with patients. Patients no longer want to just be satisfied. They want an experience! Starbucks, coffee shops, boutiques, spa, Zen comfort rooms, themed hallways, outdoor fountains etc. are becoming more important to patients so visits are pleasant.
And the patient/consumer’s role is evolving as they take on more of the financial responsibility and as they are asked to engage in the process of managing their health and well-being. This shift varies tremendously by region and market, highly dependent on the competitive and payer dynamics in your particular geography.
Finally, social media has a growing impact on healthcare decisions. A survey by PwC indicated that 42% of people look at consumer reviews, which may influence their choice of providers and hospitals. Nearly 30% of people gain insight from other patients’ experiences and are no longer relying on providers or healthcare institutions as their only source of information.
Nearly 75% of all people use the internet as a source of information about their health, physicians, and healthcare institutions and relying on the experiences of other patients to help them make important health decisions. Providing a positive patient experience throughout the entire system has influence beyond the four walls of where care is provided.
symplr can help
symplr's Quality Review can assist you with tracking and demonstrating the new measures and incentives for Value Based Care and Value Based Payment. Learn more about our Quality Review Suite.
About Joni Orand
Joni Orand has worked in the healthcare industry for twenty eight years’, in both managed care and hospital environments, working with providers and staff gaining unparalleled experience in all aspects of provider management and quality improvement initiatives. She holds a degree in Corporate Communications, with minors in Interpersonal Communication and International Studies in Communications. Joni is a certified trainer, speaker and coach, and is known for helping, educating, and supporting clients as they develop quality improvement plans. Currently working as a Senior Solution Consultant for symplr, Joni speaks as a Subject Matter Expert at industry events.