With their announcement in January, the Centers for Medicare and Medicaid Services (CMS) set an ambitious path to transition to payments based on value as opposed to Fee for Service, further pushing responsibility to providers for outcomes. The time line may be new, but this experiment has been going on for the past few years as CMS has tried out a dizzying array of programs including the Pioneer ACO program, Medicare Shared Savings Program (MSSP) and Bundled Payments for Care Improvement (BPCI).

Additionally, Medicare Advantage plans have been in operation and growing since their beginnings in the 1970s. All of these programs have had their share of winners and losers and the business models underpinning each have had their share of tinkering since inception. But all of the programs have had strong and growing participation from providers and health systems around the country.

In the private payer world, the push towards value based contracting is on a similar trajectory. Payers (both commercial insurers and large employer groups) are in various stages of application of similar arrangements with providers of care, along with many commercial insurers taking a brawny presence in Medicare Advantage. From modest “pay for performance” initiatives, to ACOs, to lower cost “narrow network” insurance offered on health exchanges, to bundled payment agreements like Wal-Mart’s program for orthopedics, the sophistication of value based contracting only continues to grow. And we expect this trend to accelerate as private payers follow the CMS lead.

The increased efficiency and technology required initially favored the largest players, and much of the consolidation to date has involved large, deep-pocketed systems that have the resources to invest in technology and process improvement as well as to purchase the critical skills and relationships by employing the practicing physician. However, we feel that this time of change also creates opportunities for providers who are willing to “pivot” to new ways of doing business and as a result, they will be able to enjoy improved quality of life and find greater financial and personal rewards in their work and to do so independently if they so choose. This change requires organizational, financial, clinical and cultural change, driven by data. Below are a few considerations for providers to survive and thrive in the new value based world.

Establish Strong Data Governance

Data must drive decisions at the clinical level. Well-applied technology is a “force-multiplier” for the clinician. An algorithm cannot replace good decision making, but it can reduce cognitive load and help stratify populations and thus prioritize efforts. What is critical is that information must be relevant, timely and delivered at the appropriate context.

What satisfies the requirements for good data warehousing may not serve the clinicians and other staff on the front lines in reports, or may be difficult to interpret. Pull in data sources first that help teams assess and execute on contract metrics; make the reports as individualized as possible, eliminate as many distractions from reports as you can. If the data is unreliable, consider how it can be augmented with staff or simply eliminated.

Providers must focus on the “blocking and tackling” of operations today. If you can’t succeed on contracts today, all the future thinking is for naught. But enterprise decision making has to also consider the strategic implications of data. New, esoteric sources of data will soon be available and relevant: wearable and other patient submitted data, socioeconomic factors and even social media will be invaluable – think of platforms and methodologies that can scale with your data over time, for example vendor agnostic and extensible cloud based services. Carefully evaluate whether targeted point tools or single-source enterprise solutions will serve your 3-5 year strategy and position you for the future.

Apply Design Thinking to Processes

Many valued based contracts have a component that includes patient feedback, including the Consumer Assessment of Healthcare Providers and Systems (CAHPS) and similar. In many cases, these ratings can have a direct impact on reimbursement.  Additionally, social media provides a source of information for consumers of healthcare that will need to be managed as well. Facebook ratings have been found to be surprisingly correlated with some quality indicators. These may ultimately influence consumer preference, perhaps even more than established healthcare benchmarks. Using the lessons from hospitality, retail, and other industries, provider organizations will need to consider various touchpoints with the patient, particularly introductions to your organization and most recent experiences prior to the survey being delivered to the patient.

Use Pilots to Build Out Organizational Expertise

Depending on the market, many payers are experimenting with “kinder and gentler” approaches to contracting. Some contracts minimize downside risk to ease the process. Seek out opportunities to pilot with new payer arrangements to create an incentive to invest and optimize operations early. This is the time to drive physician engagement in the process, align care appropriately and craft a population health strategy. Lower risk contracts give your organization the opportunity to invest in information systems, gain experience and create accountable leadership teams at all levels.

Seek Efficiency in Operations

Value based contracts provide impetus for change in workflow. This doesn’t have to be a “big bang,” but rather an incremental and iterative activity, focused on variability in operations. Identify bottlenecks with greatest impacts, especially those that drive patient experience and cost and work through the issue. Then the next largest bottleneck and so on. Addressing staff pains in the process will also help with adoption of new approaches and reduce burnout.

Automate where appropriate so that all members of the team, doctors, care managers, nurses and office managers are able to delegate and thus work at the top of their skill level. Some areas of opportunity include leveraging traditional Customer Relationship Management (CRM) principles for patient engagement and followup, telemedicine, email and phone consultations to reduce costs and predictive analytics to identify opportunities to run campaigns.

This is a tremendous time of change – and opportunity – for providers who are willing to seize the moment. By laying a good foundation, providers will be ready to capitalize as independents or partners to larger systems on the higher level of consumer choice, new models of access to care and the ever-increasing shift of risk.

colorful lightbulb
Sign up to receive the latest insights.

We promise not to spam you and only send the good stuff!