As value models move ahead, many organizations are left behind

The most difficult challenges to value-based reimbursement reside within the cultural and operational sides of the business, and not technology, experts say.

When viewing healthcare’s transition to a value-based purchasing model, providers that haven’t taken the critical steps forward may be intimidated and paralyzed with indecision because of all the moving parts involved.

But those frozen in their footsteps are not alone – in fact, they are in the majority, said Rob Schreiner, MD, managing director of population health for Chicago-based Huron Healthcare.

“In visiting health systems across the country, CEOs and CFOs are very concerned that they don’t have the operational, financial, accountability and reporting infrastructure to know where their costs lie, what value they’re getting and most importantly, how to improve processes and workflows to take out waste in the manufacturing process,” he said.

A lot of attention has been placed on the role of information technology in affecting healthcare’s shift toward accountability-based care and value-based purchasing, which is understandable given that “society gravitates towards toward shiny new technology” and that strategy meetings are typically geared toward electronic medical records, software and analytics platforms, Schreiner said.

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Yet the most difficult challenges reside within the cultural and operational sides of the business, he said.

“There are more impactful foundational changes that need to happen in delivery systems to improve the cost of care and improve outcomes,” Schreiner said. “If the last 20 years have taught us anything, we’ve been more effective at increasing the volume of services than reducing how much is paid per unit of volume.”

As healthcare costs rise toward 20 percent of the gross domestic product in the U.S., the system will become unsustainable if nothing is done to control it, he said. The responsibility is now firmly on providers to forge ahead in implementing the necessary actions that will allow them to compete in the new environment, no matter how difficult they may seem, Schreiner said.

“There is a natural tension about what technology, services and advice to buy versus what to build internally,” he said. “Because healthcare has to be continuously improved, it behooves organizations to have some infrastructure built within their four walls, along with workflow engineering and process standardization in order to improve outcomes and patient experience.”

Value of collaboration

As one of the healthcare industry’s major group purchasing organizations, Charlotte, N.C.-based Premier has long touted the financial advantages of belonging to a collective.

Within the value-based purchasing context, providers can gain tremendous leverage with their VBP programs as part of a larger collaborative, said Richard Bankowitz, MD, chief medical officer for Premier.

“By using a common set of measurements, everyone knows how the other is doing,” he said. “We share best practices for 365 members to find pockets of excellence.”

Through an initiative called QUEST, providers within the Premier collaborative have seen costs flatten and 62 percent have generated positive financial results within the value-based purchasing model, Bankowitz said. A recent Premier-Dartmouth study revealed that sharing best practices and benchmarking performance created improvements on several fronts, he said.

“We focused on hospitals that got better quickly and what we found was they had leadership visibly involved, they used all the data and held people accountable,” Bankowitz said. “They were able to establish a methodology of quality improvement.”

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Provider organizations that are not members of the Premier GPO can still participate in QUEST and other performance improvement programs, such as Quality Cycle Management, said Scott Pope, Pharm.D., vice president of quality and safety solutions.

“QCM dovetails into what is happening with QUEST,” he said. “It opens up a culture, technology and way of doing business. It includes important elements of executive focus, tied back to revenue cycle management and brings in best practices in the same way, showing hospitals their metrics around value-based purchasing.”

Because it has a dashboard view, QCM shows organizations their current performance and what they can expect if they keep everything the same, Pope said. Through a group-oriented approach, providers can more easily find the direction they are looking for and benefit from the security it provides, he said.

“If you don’t join QUEST, join something,” Pope said. “Take advantage of a learning environment.”

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