Leaders must prioritize investments that improve patient care and the ability to manage financial risk.
“If you are able to use integrated data to drive strategic decision-making, you are really getting to value-based care nirvana.” — Amanda Skinner, vice president and general manager of managed value and risk analytics at Optum
In 2010, when value-based care seemed imminent, large healthcare organizations sprang into action, making significant investments in technology and population health management models. But the rest of the industry has not moved as quickly due to market pressures, uncertainty around healthcare reform, and a host of other factors. Taking a wait-and-see attitude, however, brings its own challenges, says Amanda Skinner, vice president and general manager of managed value and risk analytics at Optum. “The incremental approach makes the transition difficult because you are trying to live in two worlds.”
Breaking Through Bottlenecks and Assessing Readiness
Indeed, healthcare organizations that have succeeded under fee-for-service are reticent to dismantle their entire business and care delivery system to transition to an alternative payment model, says Skinner. Lack of payer pressure in some markets has also been a de-motivator. Ultimately, says Skinner, “regardless of what happens with healthcare reform, the idea of tying provider compensation to value is here to stay.” Healthcare organizations should plan now for how they will address external pressures pushing them closer to value-based care and what that means from an investment perspective, says Skinner.
Those healthcare organizations ready to accelerate must assess internal readiness for change and success under value-based models. “Leaders need to look at internal resources, core competencies, and existing technologies to determine if they have the ability to be successful at being accountable for the total cost of care while improving quality,” says Skinner.
Understanding Your Market’s Trends
Hospitals and health systems must be able to recognize their specific market factors, including competition from physicians and other organizations. Physician activities, such as consolidation patterns and an appetite for risk, must be carefully assessed to understand their impact. “Some hospitals and health systems may want to drive that trajectory as opposed to waiting to see what happens from the competition in the market,” says Skinner. Moreover, organizations looking to expand their provider network will need a growth strategy. “There are many options, including building new practices, acquiring existing groups, or forming a partnership or affiliation.”
Finding the Balance Between Physician Engagement and Acute Care Success
Nimbleness is essential when it comes to transforming a care delivery model, says Skinner. “Change can be difficult in complex organizations, but having better information enables and encourages care delivery transformation.” This involves understanding the intricacies of value-based care contracts and how they impact the total enterprise, as well as community obligations. For example, if a hospital-owned physician practice enters into an ACO care model, the practice will probably be required to reduce its utilization of unnecessary inpatient services. “You need to know how you will respond,” says Skinner. “Will you close beds, repurpose parts of your facilities, or is there a new strategy for continued enterprise growth?”
Skinner says, “It is also critical to engage physicians in meaningful ways, including asking them to be partners in changing care delivery processes, how their care teams are constructed, and how they operate the practice.” This may mean reevaluating compensation models for hospital-owned practices. “If you pay physicians based upon volume, but reimbursement is based on quality performance, there will be some tension,” she says.
For healthcare organizations that have already taken on some risk, are growing their network, and are using technology and analytics to speed their transition to value-based care, Skinner also recommends looking at strategic partnerships. “It is expensive to invest in infrastructure and develop the right analytic competencies to support all of your activities,” she says. Explore different types of partnerships, including working exclusively with a skilled expert who has multiple competencies and can guide value-based care strategies. Or, consider sharing infrastructure with other provider organizations while partnering with a vendor that has scaled these services in the past.
Creating a Value-Focused Investment Strategy
While healthcare organizations tend to focus on investments in patient care, those that also invest in technology and services—such as robust analytic capabilities, interventional programs to coordinate care and increase patient access, and change management processes to support care delivery transformation—improve their ability to manage financial risk and position themselves to thrive in a value-based world, says Skinner. These organizations have focused on translating their data into meaningful information that advances their contracting strategy, quality improvement, network development, care coordination, and patient engagement. “If you are able to use integrated data to drive strategic decision-making, you are really getting to value-based care nirvana,” says Skinner.
Optum