In the transition to value-based care, healthcare industry stakeholders are facing various challenges to staying financially viable, including those presented by healthcare reform and consumerism. However, there are steps healthcare providers can take to overcome those challenges and create a sustainable revenue stream at the same time.
At the Becker's Hospital Review 6th Annual Meeting in Chicago, Mary Bacaj, vice president of strategy and value-based care at Conifer Health Solutions, discussed how monetizing value-based care can help a healthcare organization remain competitive in a value-based world. Ms. Bacaj defined monetizing value-based care as an organization's systematic approach to transform consistently high-quality clinical outcomes into sustainable revenue. It involves "recognizing that the highest quality outcomes you are achieving are also the ones that can serve to differentiate your system and help define the value proposition that makes you unique among other providers," said Ms. Bacaj.
There are five key steps to monetizing value-based care.
Step 1:Identify the highest quality outcomes and what's working in care delivery, then refine (or define) the care model. This requires providers examining the areas they are successfully providing high-quality care at a low cost and then basing their care model off of that information.
Step 2: Overhaul clinical and administrative processes. Administrative costs account for 25 percent of hospital spending in the U.S., more than twice the proportion seen in Canada and Scotland, according to a 2014 Health Affairs report. It doesn't appear the costs in the U.S. are going to decrease either, as U.S. hospital administrative costs rose from $97.8 billion in 2000 to $215.4 billion in 2011. Although the higher administrative costs in the U.S. can be attributed to a number of factors, including the complexity of the billing systems U.S. providers use and varying payment rates from a number of insurers, in the process of monetizing value-based care, "you have to determine if there are ways to put less focus on the administrative pieces," said Ms. Bacaj. This is especially important since a 2014 Commonwealth Fund study determined there was no apparent link between higher administrative costs and better-quality care.
Step 3: Demonstrate value with data that supports superior outcomes. "Your value proposition is only as good as the data to support it," said Ms. Bacaj. Providers need the data to show payers, consumers and others the high-quality care they provide.
Step 4:Define your "promise" to buyers and help them understand what to expect. "You have to tell your buyers what makes you special," said Ms. Bacaj. For instance, providers should clearly state on their websites and marketing materials which narrow networks they're a part of. Eighty percent of the insurance products offered on the exchanges last year were narrow network plans, and 70 percent of consumers who purchased a plan on the exchanges got a narrow network plan. "What that means, is that you have to make it clear to the consumer which narrow networks you're a part of," said Ms. Bacaj.
Step 5: Build internal capabilities to support the new care model(s) to ensure replication.For example, Ms. Bacaj discussed a project Conifer is working on with a large union employer that involved every employee receiving an individualized preventive care plan. If the employees followed the measures in their plan they received a $500 bonus. "Although it took a lot of outreach, the employees had 85 percent compliance with their care plans in the first year," said Ms. Bacaj. The program expanded in the second year to include chronic as well as preventive care, and the compliance rate jumped to 90 percent that year. The key to the program's success was having the capabilities to determine the specific employees who suffered from chronic conditions, getting them on board with the program through outreach efforts and providing an incentive to get them engaged.