The 350 hospital executives surveyed for McKesson’s recent white paper, Journey to Value: The State of Value-Based Reimbursement in 2016, were not overly optimistic about the financial impact of value-based reimbursement models on the future profitability of their hospitals or health systems:

  • 41 percent said value-based reimbursement would have a positive effect on profitability
  • 33 percent said value-based reimbursement would have a negative effect on profitability
  • 26 percent said value-based reimbursement would have no significant effect on profitability

Providers can control their financial future when it comes to value-based reimbursement. In four new blog posts on, four reimbursement experts suggest actions providers can take to ensure value-based reimbursement models not only improve the health of their patients but also the financial health of their organizations.

In “Five Ways to Improve Hospital Revenue Cycle Performance,” McKesson’s Kamron Lachney says now is the time for hospitals to upgrade their revenue cycle management capabilities in anticipation of the future impact of value-based reimbursement on cash flow. Among his five recommendations for hospitals and health systems is optimizing existing revenue cycle management technologies and embracing new and technologies and services. Providers need technology “…that is both flexible and scalable given the growth in the number and complexity of hospitals’ contracts with payers and the increasing need to work directly with patients regarding their financial responsibility,” says Lachney, who is vice president of hospital operations for McKesson.

In “Assessing Practice Readiness for Medicare’s Comprehensive Primary Care Plus Initiative,” McKesson’s Jeb Dunkelberger speaks directly to primary-care to physician practices considering joining Medicare’s Comprehensive Primary Care Plus, or CPC+, initiative. Physician practices can earn payment bonuses if they perform well on four required services to Medicare patients, including chronic disease management and preventive care. Practices must assess the impact of joining on cash flow. If that assessment is positive, they must build the technology infrastructure and clinical expertise needed to make it a reality. “For practices willing to make the commitment, the return on investment will be there both in the short- and long-term,” says Dunkelberger, who is vice president of accountable care services and corporate partnerships for McKesson’s Business Performance Services division.

In “Consensus on Quality Measures Will Fuel Value-based Reimbursement,” Dunkelberger applauds an agreement by the Centers for Medicare & Medicaid Services, commercial health insurers and physician organizations to standardize core sets of quality performance measures for seven delivery models and clinical service lines. As value-based reimbursement plans proliferate, so do the quality performance measures that each plan places on participating providers. That compliance burden makes providers, particularly physician practices, reluctant to pursue VBR contracts or join new VBR initiatives, according to Dunkelberger. The consensus will encourage providers to engage payers on VBR models and to develop the staff, skill sets and technical capabilities required to succeed in a VBR world. “A common set of measures focused on outcomes makes it easier for physicians to see how what they do affects the health of their patients and the financial performance of their practice,” he says.

In “Maintain Healthy Revenue During an EMR Transition,” McKesson’s David Dyke and Carmen Sessoms discuss the steps necessary to make an EHR system switch without disrupting a provider’s cash flow. Optimizing or upgrading the ability of an EHR system to collect, aggregate, analyze and report performance measures is core to a provider’s ability to succeed clinically and financially under value-based reimbursement arrangements. Making a major technology change can put a provider’s cash flow at risk as coding services delivered accurately and quickly for billing depends on accurate and timely clinical documentation captured by EHR systems. Dyke and Sessoms urge providers to assemble a revenue cycle EHR transition team that includes financial managers who monitor revenue cycle KPIs during the changeover. “Providers should know how the new EHR will affect claims management workflow, staff utilization and speed of payment,” say Dyke, vice president of product management and business development for McKesson’s RelayHealth Financial business unit, and Sessoms, area vice president of product management for Relay Assurance Plus, which is part of RelayHealth Financial.

As the four blog posts illustrate, the transition to value-based reimbursement from fee-for-service medicine doesn’t necessarily have to be a drain on a provider organization’s balance sheet. With the proper adjustments in treatment protocols, culture, management, leadership, skill sets, expertise and health information technologies, providers can lower their operating expenses, generate additional revenue and actually improve their profitability in a VBR environment.

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McKesson editorial staff is committed to sharing innovative approaches and insights so our customers can get the most out of their business solutions and identify areas for operational improvement and revenue growth.

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