From Output to Outcomes: Making the Difficult Transition

Philip Betbeze, for HealthLeaders Media , July 13, 2011
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Americans have known and sweated the unsustainability of rapidly rising healthcare costs for years, but until recently not much has been done about it on a national scale. That’s because while any incentives to transform care have been well-intentioned, they didn’t contain the keys to the transformation: money, and how it’s distributed. It sounds crass to say so, but how the money is disbursed is perhaps the most powerful incentive. 

That’s not to say that most hospitals and health systems haven’t long been working to improve their quality outcomes and patient satisfaction, but absent a compelling financial reason to spend the time, effort, and money to change, many valid efforts to improve the quality of care faced big obstacles.

With few exceptions, hospitals still are paid on a fee-for-service basis. But that’s changing rapidly in both commercial and government payer relationships with healthcare providers. What’s changing most rapidly appears to be hospitals’ relationships with their physicians. Hospitals are forging closer relationships with a variety of specialties that have long been independent. That doesn’t mean this forced marriage is easy, however.

Incentives for quality

Marlon Priest, MD, is part of a wave of empowered physician leaders who are helping their colleagues, whether employed by the health system or not, to make the transition. He’s executive vice president and chief medical officer for Bon Secours Health System Inc., an 18-hospital health system based in Marriottsville, MD. For Bon Secours, blanket solutions are difficult to implement, because it owns some hospitals, manages others, and operates some via a joint-venture arrangement. Most of its physicians are independent. But to its credit, the health system’s leaders saw good reason to invest in quality before it was about the money.

Priest credits the system’s participation in the CMS/Premier Hospital Quality Incentive Demonstration project for sparking the transition toward quality and value. In short, the whole system participated and quality metrics became part of senior executives’ risk-based compensation.

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