6 Ways to Succeed in Value-Based Care

The CEO of Atlantic Health System shares tips for delivering high-value performance.

Atlantic Health System CEO Brian Gragnolati began working out the metrics responsible for demonstrating value he was in charge of Johns Hopkins Medicine's Integrated Delivery and Financing System. Two years ago, he was appointed to lead the $2.6 billion (revenue) Morristown, NJ-based health system, and has implemented a measurement regime he believes will improve value.

Morristown, NJ-based AHS, with 1,000 employed physicians, rehab, home care, hospice and one of the largest ACOs in the nation (390,000 attributed lives) is ideally structured for value-based care, but that doesn't mean value will just happen. Gragnolati revealed six tips to delivering value in a recent conversation.

1. Avoid patient harm.

AHS seeks to measure patient harm at an elemental level.

"Our payment structures are set up to hit certain quality measures like readmissions, mortality and HAIs (healthcare associated infections)," says Gragnolati. The health system measures activity levels by area, looking at quality metrics, focusing on preventable harm, and the need, where appropriate, for pre-emptive intervention, such as precautions against falls, pressure ulcers, and line management.

"We discuss [on a daily basis] any patient who has a line or catheter, and make a deliberate effort to know when it's coming out," he says. "We also celebrate the days and months and in some cases, a year-plus that we haven't had a line infection."

2. Measure what affects your ability to get paid.

Value-based care and risk-based contracts represent a small percentage of total revenue for AHS, but it's growing and will continue to do so. Gragnolati says the health system's ACO work provides a great learning experience. Yet there are still frustrating issues with value creation, including the inability to view a patient's healthcare experience from outside the health system.

"I'm looking forward to a day when everyone is connected on either our EHR or one that interfaces with us so we don't have to guess what's happened to the patient before they hit our door," he says. "That inherently will create more safe and effective care."

Top administrators also get reports on more traditional measures, such as volumes and readmissions, and the health system uses a capacity planner to predict future staffing levels. The health system's physician enterprise also is able in real time to view at not only total patient activity, but also how many of those patients are staying in the system for care. Post-acute care report cards are also a critical part of the evaluation of value creation.

3. Consider patient experience.

"We measure door-to-physician time, and door time to disposition," says Gragnolati. "In real time, we look at patients being held in the ED and focus on what we need to do to get them elsewhere."

This leads to better integration with the rest of the healthcare enterprise, so, as Gragnolati puts it, "no longer do EDs feel like they're living in isolation." Also, he says with affordability a top concern to consumers, value has to be a part of the equation from their point of view.

"The reasons are apparent," he says. "They're experiencing more out-of-pocket costs, and healthcare takes a higher percentage of their income."

4. Measure employee engagement.

Gragnolati says about 15% of the system's total measurement effort goes toward evaluating performance and engagement of its employees. For the past eight years, AHS has been among the top 100 places to work according to Fortune magazine. Gragnolati says his philosophy is always to make sure the leadership is caring for the caregiver.

"If you do those things well, your organization is ultimately successful," he says. "That sounds naïve, but quite frankly, we leaders overcomplicate things a lot."

He adds that the entire health system's employees are measured the same way and with one report card the one the entire staff sees. Also, everyone is able to view the CEO's objectives for the year. Gragnolati says that level of transparency helps people connect to their piece of the puzzle.

"As we continue to become more integrated, we're measuring the degree to which direct care providers feel engaged," he says.

Getting employees, especially care team members, to understand the importance of the role of each individual on the team is also an area of focus. Which leads to:

5. Conduct patient care huddles.

At each hospital, whole-house huddles take place at 11 a.m. for 15-minutes. They're populated by the clinical staff and the leadership team, focusing on what's happened to patients in that facility over the past 24 hours.

"I go out to clinical sites a lot and I time my visits so I can go to patient care huddles," he says. "I encourage corporate folks to get into the huddle. I showed up at one a few weeks ago and my CFO was there."

6. Build credit strength.

The revenue base is shifting for AHS. Some 54% of it is now ambulatory. Two years ago it was less than 50%.

"We're pushing more care to the outpatient side so we stay attendant to operating revenue, which implies market share growth," he says. "As inpatient become less relevant, you have to grow aggregate operating revenue, which comes from your patient touches."

Part of that effort means making sure the health system's balance sheet is completely connected to its profit and loss statement. With earnings before interest, depreciation and amortization (EBIDA), Gragnolatis gets a better view of where the organization is generating cash flow. In uncertain times, it's important to stay focused on building credit strength.

"It's a complicated dance with analysts, but [to fund investments] we need sufficient reserves and a balance between debt and profitability."