Healthcare finance officers today can attest to the truth of the saying that change is the only constant. Provisions in the Affordable Care Act mean reduced reimbursement for organizations that fare poorly in CMS’s value-based purchasing and hospital readmission reductions programs. The ongoing fiscal crisis in Washington promises further pressures on Medicare and Medicaid reimbursement. Both public and private payers are asking providers to experiment with new forms of payment and care delivery, including accountable care and similar shared savings programs, bundled payments, and population health management. At the same time, healthcare organizations are working to implement electronic health records (EHRs) to capture Meaningful Use incentives and avoid future penalties, while preparing for the shift to ICD-10.

Having recently left my role as a hospital chief financial officer (CFO) to take the position of President and chief executive officer (CEO) of HFMA, I’ve seen firsthand the challenges these changes are posing for healthcare organizations. As CFO, for example, I chaired the ICD-10 transition work group, and I quickly learned that this change is far more significant than anything we faced preparing for Y2K. But my role as CFO also made me a true believer in the need for our industry to embrace the challenges that come with change.

Left untouched, the situation will only get worse as the baby boom generation ages and moves onto Medicare, and millions more obtain insurance through expanded Medicaid and/or the insurance marketplaces. Employers—frustrated by ever-increasing employee healthcare costs—are shifting premium increases to their employees or asking them to take on higher deductibles.

The Opportunity to Drive Value

We know we can do better as an industry. The Institute of Medicine estimates that the United States healthcare system wastes 30 cents on every dollar spent. While troubling, that amount represents tremendous opportunities for organizations that can provide higher-value care. Helping providers make that transition is one of the overarching missions of HFMA.

Since 2010, HFMA’s Value Project has been working to clearly define the meaning of value in healthcare and to identify the capabilities healthcare organizations need to provide that care. First and foremost, value is defined from the perspective of the purchaser: the patients, employers and government programs that actually pay for healthcare. Greater value to the purchaser means higher quality outcomes—fewer complications, fewer unnecessary tests, greater patient satisfaction—and reductions in the cost of care.

The Key Capabilities to Value-Driven Care

So how exactly do we get to this level of higher-value care? HFMA has identified four key capabilities in the areas of:

  • People and culture
  • Business intelligence
  • Performance improvement
  • Contract and risk management

While all four are important, the first two—people and culture, and business intelligence—are absolute prerequisites. To effectively improve performance and manage the financial risk that new value-based payment arrangements demand, all members of the organization must be aligned behind the goal of driving higher-value care.

The organization also must have access to data that can pinpoint performance improvement opportunities and identify boundaries between acceptable and unacceptable levels of contract risk. To this point, when HFMA members were asked what strategies they have initiated to prepare for value-based payment, investment in better clinical and financial decision support capabilities and development of a culture and workforce able to make the transition to value-based care were the two leading strategies identified.[1]

As you might anticipate, there are important subsets to these primary capabilities. For people and culture, these include:

  • Educating boards about emerging market dynamics and the potential financial implications for the organization
  • Cultivating physician leadership and developing new physician compensation models that reward higher-value performance
  • Engaging staff throughout the organization to improve performance, which includes addressing concerns over the impact of improvements on staffing needs

For business intelligence, these include:

  • Marrying clinical and financial data to identify variations in—and the financial implications of—clinical practice patterns and to track the financial impacts of performance improvement efforts
  • Improving financial data to better quantify costs in preparation for payment methodologies such as bundled pricing, shared savings, and capitation, which will require a more precise understanding of costs across care settings
  • Gaining access to data that enables healthcare organizations to better predict utilization patterns and cost trends across populations and better understand the risks inherent in performance-based contracts

Value = Quality + Cost

At the end of the day, what we’re talking about is value. “Value” is the new buzzword, and as such, it’s used so much that it sometimes loses its meaning. So let’s be clear; value means quality improvement and cost improvement. And the third rail? Reimbursement. As noted earlier, healthcare organizations will be asked to take on these challenges in an environment of ongoing reimbursement pressures. They will be asked, in effect, to do more with less. But to thrive in a value-driven system, healthcare organizations must learn to do more for less to the purchasers of care. Doing more with less and more for less are two sides of the same coin.

[1] HFMA Value Project survey, December 2011

Mobile App Helps Physicians to Complete Deficiencies and Speed Billing

Billing depends on having physician sign-off on the patient’s medical record for the clinical details of service. Without that signature or required clinical details, the record is “deficient” and held for billing, which affects cash flow and the bottom line. Now physicians can use a mobile document management application to access the record, available via the AppStore for the iPhone®, iPad® or iPod touch®. The app assists health information management (HIM) departments in streamlining deficiency resolution.

The facility’s HIM department can send an electronic alert to the physician’s Apple® device via sound or text alert. The alert advises the physician that there is a deficiency in a medical record, such as completion of dictation, text-based clinical detail or their signature. The secure, encrypted connection enables the physician to access the detailed patient encounter to complete any deficiencies. Missing text deficiencies can be completed through the use of the keyboard or speech-to-text technology offered by the physician’s device. The physician also can view patient demographic data and see historical encounters for a comprehensive patient view.

“As a physician, timely completion of deficiencies and access to information is very important,” says Dr. Adam Duckett, Auburn Community Hospital. “With mobile technology, I can access the record and critical patient information anytime without the need to be at the hospital or at a computer.”

By taking advantage of personal technology, the McKesson solution provides a low-cost method of improving both the physician experience and reducing accounts receivable days.

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About the author

Joseph J. Fifer, FHFMA, CPA, is president and chief executive officer of the Healthcare Financial Management Association. HFMA provides the resources health care organizations need to achieve sound fiscal health in order to provide excellent patient care. Prior to assuming this position in June 2012, Fifer spent 11 years as vice president of hospital finance at Spectrum Health, in Grand Rapids, Mich. Mr. Fifer also spent time at other Michigan health systems: McLaren Health Care Corporation and Ingham Regional Medical Center. Mr. Fifer started his career with nine years at Ernst and Young, also in Michigan. Fifer was Chair of the HFMA Board of Directors in 2006-2007. An HFMA member since 1983, Fifer served as a chapter president and for two terms as an HFMA board member.