Building the Business Case for Value-Based Care

John Commins, for HealthLeaders Media , February 26, 2014

Then you have to get the COO or the CFO to say 'Let's work the numbers.' Typically, you don't find those two parts of organizations working together. Doing spreadsheets is not the physicians' skill and providing care is not the CFO's skill. But if you can get them to come together, that is where the magic happens.

Payment Reform

You say to physicians 'Where do you think you could redesign care if somebody gave you the flexibility to be paid differently, to be paid for things that you aren't being paid for today?' When I talk to physicians, they all have ideas but nobody asks them.

The typical approach is that physicians say 'Pay me for these things that you don't pay me for today.' The health plan, Medicare, employers or whomever says, 'Wait a minute. That will increase costs if you are going to be paid for something new.' If you think it is going to be better, run the numbers to see if it actually will save money. What will you do less of and what will that save?

Get everybody in the room. Get their ideas. Figure out which subset appears to be the most promising. Do the detail work and go to payers to put it in place. If you can show success then that encourages people to do more. Not every case will it be a savings proposition.

Which of those things is there really a business case for, and if there seems to be a business case then let's do a finer analysis to show that and take it to the payers to say 'how about a deal here?' Even if you can't get the perfect data, using approximate data to at least see if it looks like a business case then tells you which things to focus on.

HLM: How soon could a value-based model see a return on investment?

Miller: For many of these things, the savings can happen very quickly. A lot of what has been done in healthcare has been desirable, but has a long-term payoff. There is a lot of focus on better management of diabetes and hypertension; all very desirable but it doesn't save a lot of money this year.

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