Recent legislative uncertainty in Washington — from the attempt to repeal the Affordable Care Act (ACA), to the Centers for Medicare & Medicaid Services (CMS) delaying the start date for the cardiac bundle demo — has health care providers searching for the best way forward in these unpredictable times.
Some are moving ahead with reform cautiously, while others are adopting a “wait and see” attitude. Given what’s at stake, now is not the time for health care organizations to sit on the sidelines.
Health care providers should take proactive ownership of their performance agenda
Historically, health care providers have been reactive to external demands from government regulators and commercial payers. And government and payer organizations currently define many of the metrics for which providers are held accountable. However, physician enterprises and hospitals are better positioned than governments and payers to define clinical quality.
When defining quality, providers must be cognizant of the need to understand quality as defined through the lens of the consumer and the payer, and also be prepared to integrate the softer but real metrics of patient satisfaction and experience into their performance management activities. Providers should be the ones developing transparency around processes and evidence based performance — and then hold themselves accountable for its delivery. In fact, physician organizations such as the American College of Physicians, the American Academy of Family Practice, the American Academy of Pediatrics, the American College of Cardiology and other medical specialty organizations have established, through physician thought leadership, evidence-based medicine-derived guidelines for provider performance that should be used to adjudicate on performance. Yet, to date, providers have failed to consistently and transparently do so.
Contributing to the issue is inconsistent physician enterprise alignment and management, as well as a lack of integrated data analytic capabilities — capabilities that providers have not prioritized. Absent an integrated IT infrastructure, providers struggle to consistently define and manage enterprise-wide clinical quality and consumer value. Importantly, individualized physician behavior leads to inefficient cost containment.
Not surprisingly, payers have stepped into the void. Payers are using data mining and predictive modeling techniques to understand the factors that influence a higher or lower cost of treatment for particular episodes or populations. They are developing portfolios of metrics upon which providers will be measured. And providers will have no choice but to comply. Understandably, payer organizations are focused more on cost containment, sometimes at the risk of compromising quality. This leaves providers in a position of passive resistance as they respond to performance baselines that are thrust upon them, leaving them with poor insight and little to no control.
The impact of this lack of insight and control to providers can be substantial — and they may not even know it. In one instance, a payer is using cost-effectiveness metrics to steer customers away from providers in its network that are not cost-efficient in comparison to the other providers in their network. Further, they are doing so without necessarily informing affected providers of the decisions or the basis upon which the decisions are made. We see this as a fundamental failure of health care delivery and payment.
Three steps health care providers can take to develop readiness in value-based decision-making
To steer themselves back to a position of empowered decision-making, providers will want to consider taking the following fundamental steps forward:
1. Transform the culture of provider organizations. Clinicians and health care providers should begin transforming culture by creating collaborative physician-administrator partnerships. Physician-administrator partnerships are critical in preparing a provider workforce for value-based care readiness. Provider organizations will need to invest in physician alignment and engagement strategies. They will also want to create clinically integrated networks with functional ecosystems that can demonstrate outcomes and analyze and optimize the cost of care delivery. Providers will also want to create governance councils within the networks that will hold practitioners accountable for agreed-upon performance metrics related to both quality and cost.
2. Invest in business intelligence and advanced analytics tools. Providers need to prioritize enterprise-wide business intelligence tools to facilitate seamless vertical and horizontal integration across the provider ecosystem. This will allow providers to aggressively pursue data mining and predictive modeling to produce near-real-time analytics, and create comprehensive performance dashboards to use in their discussions with payers. Often, provider organizations already have the data needed to develop appropriate quality and performance metrics, but have no systematic or meaningful way to access, analyze or report on it. In this situation, it is critical to develop and operationalize the analytical models and data visualization tools to proactively identify the factors that drive poor or strong performance. In addition to upgrading IT infrastructure to gain access to their data, provider organizations may want to consider cloud-based performance analytical tools and dashboards. These tools and dashboards can offer better access to and analysis of the data, greater visibility into performance gaps and opportunities, and faster issue resolution.
3. Collaborate with payers in developing alternative payment models. Although payers are much further ahead in terms of data gathering and analysis, and their ability to develop benchmarked metrics upon which provider performance is adjudicated, their metrics rely on claims data which usually lags electronic health record data in terms of timeliness. If providers have the internal capability to understand enterprise-wide performance using data that is as near-time as possible (within three months of data analysis), they will be better-positioned to manage their performance in alternative payment model environments by basing future payments on more recent electronic health record data, instead of older claims data.
Seize the opportunity to take the lead by owning the delivery of value-based care
From uncertainty rises opportunity. Using data mining to proactively understand what drives differences in cost and quality should be a fundamental part of managing a provider business. Health care providers that choose to proactively take initiative and ownership for delivering value-based care will almost certainly pull ahead of their competitors. These organizations, capable of delivering high-quality care, with lower costs and a positive consumer experience, will be well-positioned to be competitive in any type of future marketplace.
Yele Aluko, MD, MBA, is an executive director in the Advisory Health practice at Ernst & Young LLP. He is based in Charlotte, NC, and can be reached at yele.aluko@ey.com.
Christer Johnson, MBA, is a principal in the Advisory Health practice at Ernst & Young LLP. He is based in McLean, VA, and can be reached at christer.johnson@ey.com.
The views expressed herein are those of the authors and do not necessarily reflect the views of Ernst & Young LLP.
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