Policy & Regulation News

Why the Value-Based Care Journey Begins with Assessment

"2015 has been a good learning time for many. Folks are redefining their journey to value-based care and looking at what skill set and expertise gaps they need to fill."

By Jacqueline DiChiara

- How to find value in the value-based care reimbursement movement is one goal the healthcare industry will likely be striving for in 2016.

value-based care risk-based contracts

As Medicare, Medicaid, and commercial health plans continue to press hospitals and physicians to implement value into the payment realm, healthcare providers are reassessing their revenue cycle management priorities.

What does the new future of value-based care look like? Dan Mowery, Executive Director of Industry Relations and Market Intelligence at McKesson Technology Solutions (MTS), chatted with RevCycleIntelligence.com to help answer this intriguing question.

RevCycleIntelligence.com: What is the best strategy for healthcare providers to achieve value-based care success?

Dan Mowery: Value-based reimbursement requires more preparation and participation on the provider’s side. Our recommendation from a strategy perspective is you always have to start with an assessment of where you’re at.

Some people consider value-based care as pay-for-performance on steroids.

If you’ve embraced pay-for-performance and you’ve begun to look at measuring and monitoring quality and how to ingrain that in your organization, maybe you’re further along than others. 

RevCycleIntelligence.com: What are the greatest challenges associated with risk-based contracts?

DM: It’s about understanding what your true cost to deliver specific services is. Before you can go into a risk-based contract and ideally negotiate and sign a risk-based contract, you need to know what it’s going to cost you traditionally and what levers you can turn to manage that.

You’ve got to reduce your variabilities and understand what your variability is in regard to the position partners you have in the community to provide those services.

You’ve also got to look at creating alignment with other providers in the community that will be participating in your ability to deliver those risk-based contracts.

RevCycleIntelligence.com: What’s the first step to slash costs and improve profitability in the value-based care realm?

DM: It’s about how you compare to peers and where you have room for further improvement. And then as you implement programs, the ability to track their impact and turn data into actual information that can be acted against in a timely manner.

And being able to implement and proliferate things like evidence-based practice and hold folks accountable to it.

It’s about engaging all the other care team members. Physician alignment and patient and family member engagement is part of the extended guarantee that if you’re going to reduce costs and improve profitability, you’ve got to reduce variability and deliver correctly the first time.

RevCycleIntelligence.com: How did the role of value-based care change over the course of 2015? What can the healthcare industry expect for 2016?

DM: As we look at the close of the year, provider and payer organizations have participated in a variety of experiments and pilot programs.

We’ve seen folks who were aggressive in moving to population health. Some implemented solutions but then discovered they didn’t have a good data foundation to drive them. Or they implemented solutions and discovered they really didn’t have the right skillsets or expertise to leverage them effectively.

Even if you have good data and tools, you still need really good processes and people to support that. It’s so much more than just an IT solution. It falls back to the old paradigm where technology may be 20 percent of it with 80 percent needed to deliver it effectively.

2015 has been a good learning time for many. Folks are redefining their journey to value-based care and looking at what skill set and expertise gaps they need to fill.

Or they are taking a step back and realizing they need to look at their data environment because they only had 60 percent of what they needed, or 60 percent they had a good degree of confidence in. 

Having data confidence is the foundation. Having a broad data set that gets you to ideally 80 percent plus is going to be critical.

EHR plays a significant role but isn’t the end-all. Organizations have discovered they need additional capabilities and information that isn’t currently housed there. That’s been a big part of the focus as the industry shifts toward interoperability.

The government and payers are learning from current pilot programs and are continually defining – and redefining – how they should reimburse to achieve certain outcomes or what requirements they should have baked into some of these programs.

That requires organizations to be somewhat nimble to stay on top of regulatory requirements and work well with their payer partners.

No one had achieved their ultimate destination. But it’s been a profitable journey in terms of learnings. It comes back to the not-so-unexpected discovery that technology and data alone won’t take us where we need to be.