Achieving Financial Health on the Road to Value-based Care

Healthcare organizations are focused on patient care and health outcomes, and rightfully so, but financial well-being is equally important for organizations to continue to provide the highest quality care. McKesson experts John Wallace, vice president and general manager of ACO Services, McKesson's Business Performance Services, and Marcy Tatsch, vice president and general manager of Reimbursement Solutions, RelayHealth Financial, recently discussed the importance of financial health on the road to value-based care at the HIMSS16 conference. Below is an overview of their insights.

What types of changes are we seeing now around value-based care models?

Wallace: While the original concept remains roughly the same, there's been a clear acceleration around better defining what it means to manage quality and cost. I also think there's much more proactive outreach today from providers. Proactive outreach, good care management, good transitional care management and overall coordination of care are becoming top of mind for many primary care physicians. And CMS is changing its mindset, using carrots instead of sticks when historically it was the other way around.

Tatsch: We are seeing trends in bundled payments as well as all stakeholders readying themselves for this transformation. In addition, there is a shift to where patients are front and center. Physicians are obviously going to determine the services needed, the orders that need to be placed and drugs that need to be prescribed, but patients will ultimately decide if and where they receive services. Patients are being asked to pay more out-of-pocket for some services, so they're going to ask for more transparency, for more information up front.

What are some key performance metrics providers and healthcare leadership need to measure to comply with reporting some of these new value-based care initiatives?

Wallace: Quality metrics and cost metrics. If both are done right, it makes for a lower-cost, higher-quality environment. Healthcare Effectiveness Data Information Set (HEDIS) will continue to be the metrics used for quality. And all the common metrics that drive and report on costs – for example, admissions per 1,000, average length of stay, ER visits and certain procedures being done in outpatient settings versus inpatient – will remain the same.

Tatsch: Different performance metrics are likely to be used by different payers, given the communities, the health systems, the regions and the areas they support. The information system and the connectivity of the payers, the providers and the patients are going to continue to be important as we move forward with collaboration. The technology will support better access, better coordination and better quality in these complex payment systems.

Analytics continues to be front and center at HIMSS16. Can you speak to its importance and some innovative strategies for improving performance?

Wallace: You can write a great care management plan, but it's really difficult to articulate the results of that plan to all the stakeholders without a solid technology platform. There are a lot of good emerging technologies that, for instance, help measure patient access, quality scores and cost metrics, and you're seeing these technologies bring these functionalities together, along with generating predictive and real-time analytics.

Tatsch: You don't have to look very far in any organization to see an area that can benefit from increased transparency, and that's offered by data analytics. The challenge is building a culture that embraces data insights. The incentive to execute on day-to-day operations often trumps the true focus on data, but I see that changing as we move forward. Hospitals have an abundance of clinical, claims and operational data, but the next step is putting the right analytics solutions in place. For analytics to become part of the hospital's daily operating procedures, you need solutions that are not heavily reliant on technical staff or data analysts and that can turn the data into actionable information.

What are some common objections providers have to value-based care programs, and what are the opportunities when partnering with an industry expert?

Wallace: Based on my experience speaking with health systems and physicians, they clearly want to provide better care, but the reality is they have to have healthy financial statements to stay in business. I think educating the providers, physicians and health systems on how the math works in this new environment - explaining how the outcomes of providing the highest quality care possible impacts the financials - is critically important.

Tatsch: There are long-standing entrenched behaviors that really lean toward the fee-for-service payment system. And by nature, we're all reluctant to change. Moving from fee-for-service to a system of mixed reimbursement models is an immense paradigm shift, which requires change in behavior, processes, culture and infrastructure. An organization that is truly committed to making these changes will drive forward with an assortment of tools and levers and leadership commitment in place to make that happen.

There is an intense industry focus on EHR interoperability, but also a growing recognition to ensure that EHR conversions don't come at the expense of financial performance. What are ways that providers can ensure revenue cycle performance during an EHR conversion?

Wallace: It is crucial to have an absolutely clear plan. I think where you see a lot of EHR conversions fail, and how that affects the revenue cycle in general, is based on an immature plan, a plan that's not clear. Your vendor has an enormous responsibility in helping you define that plan.

Tatsch: We believe there are five strategies to maintaining healthy revenue during an EHR conversion. The first is to give revenue cycle a seat at the table right from the start. The second is to assemble your EHR SWAT team; identify your leadership team and know who to put at the table. The third is to make sure revenue cycle is a priority during the transition. Fourth, keep an eye on your KPIs. Service-to-payment velocity, discharged not final billed, and charging trends and denial rates are key indicators of how things are going and can help an organization stay on track. And then lastly, but not least, choose the right technology partners.

Related: Learn about McKesson's Value-based Care Services 

This post originally published on May 13, 2016 as Achieving Financial Health on the Road to Value-based Care on McKesson's Focus Ahead for Better Health Blog and the full Q&A was featured in the March 2016 edition of Healthcare IT News.