According to a recent survey by KPMG's Healthcare & Life Sciences Practice, only 15 percent of the 164 healthcare professionals surveyed said their finance departments can support capitation, bundled payments and quality-based payments.
Nevertheless, the push toward value-based reimbursement (PDF, 1.4 MB) is strengthening each day. How can healthcare executives prepare their resources for a value-based reimbursement transition and avoid major pain points in the process?
Jeb Dunkelberger, Executive Director, Accountable Care Services & Corporate Partnerships at McKesson, offered to map out these roadblocks to help executives survive the value-based reimbursement movement. Here are the crucial barriers he identified and what executives can do to surpass them.

Q: How can providers integrate value-based reimbursement at the patient engagement level?

Dunkelberger: Healthcare organizations are now incentivized to deliver high-value care, and in most instances the financial and clinical benefit is recognized best in your most chronically ill patients. The ability to build self-efficacy within the patient, educate and create a level of active disease management, and incentivize good behavior (utilization of lower cost facilities can be incentivized by patients with certain cost-sharing mechanisms such as HSAs) are all criteria of a successful engagement program.

Leaders can answer this challenge by starting in a low-risk setting and developing the required skill sets to manage and engage patients. A great example of a low-risk platform for testing your patient engagement ability is seen in models such as Patient-Centered Medical Homes and MSSP ACOs, which can be set to have no down-sided financial risk, while a percentage of shared saving can be rewarded to the organization if it successfully implements a program by fulfilling all clinical benchmarks while decreasing costs for that given demographic.

Q: How can providers minimize financial challenges from a value-based reimbursement transition?

Dunkelberger: Value-based reimbursement comes in many shapes and sizes, and I believe things such as pay-for-performance, bundled payments, capitation, and global budgets all come with their unique set of challenges and subsequent set of solutions. These challenges also change vastly based on the payer you’re contracting with and the patient demographic and disease states you’re managing.
My suggestion is to start small, and minimize any financial risks as you do not want financial pressures driving the clinical decision pathway. And before you can implement, you have to know what and how you’re measuring your different benchmarks.

Q: How can providers best prepare their internal teams for value-based reimbursement?

Dunkelberger: Set a strong mission for the organization. With value-based reimbursement comes a lot of confusion, and the biggest mistake is an organization that doesn’t prepare its people by educating and enlisting them in the key decisions which drive the very changes that value-based reimbursement programs require.

Engagement of personnel also ensures a level of buy-in and gives way to information and dialect between staff members and patients. A culture must shift to successfully implement and subsequently rewarded in a value-based reimbursement. Don’t underestimate the amount of change that is needed and the amount of education and clarity that is required to become a next-generation care delivery system.

Q: What does the value-based reimbursement movement mean for revenue cycle management?

Dunkelberger: Revenue cycle management will continue to be a focus as collections, coding, claims management, and even compensation will all need to change as larger percentages of reimbursement will be tied to value-based reimbursement.
The successful groups today are the ones taking early steps to change, are trying new models of compensation and are simply not waiting for change to be forced upon them.

CMS has laid a clear path for where it intends to take reimbursement models and commercial plans will continue to follow suit. The early movers will be rewarded, although they might trip a few times, there is no question the innovators are being heavily rewarded in this system.

Q: Any other high-level observations about value-based reimbursement?

Dunkelberger: Redefine the term “healthcare provider.” Instead of providing care, become a “healthcare preventer” and prevent care that is avoidable through efficacious, evidence-based outreach programs.

Engage patients and allow them to increase their health through the utilization of the most cost-effective interventions. Once your programs begin to see marginal success, begin to take risk in those areas and allow yourself to become accountable for the continual delivery of effective care while being financially rewarded for improving the health of your populations.

Looking for additional direction on value-based reimbursement models? Download the From Volume to Value – Ready or Not (PDF, 1.4 MB) white paper from McKesson Business Performance Services.

Jeff Akers CPA

About the author

Jeff Akers specializes in financial, business advisory and practice management services for medical practices. He provides strategic and financial analysis, performs practice reviews, prepares compensation plans, implements financial management best-practices and internal controls, and prepares cash flow forecasting for medical groups.