Value-Based Reimbursement: The Resources and Elements that Lead to Success

For healthcare facilities, transitioning from traditional fee-for-service models to value-based care is like committing to a grueling physical fitness program. At first it’s bound to hurt a bit, but the effort is going to pay off. And the sooner you start, the better off you’ll be.

Value-based care is slowly but surely becoming the norm. But embracing the change may require providers to sacrifice profits, at least in the short term. Furthermore, no one can say with certainty how long it might take a given hospital to reverse the trend — to begin to grow revenue through value-based reimbursement at a faster pace than it loses traditional fee-for-service revenue.

What is certain is that providers who don’t adapt will be left behind. That’s according to Laura Kaiser and Thomas Lee, MD, who, writing in the Harvard Business Review, add that they see “a compelling business case for acting now to achieve value-based care without worrying about when the market will make the shift.”


Long-term strategy

Ms. Kaiser, Executive Vice President and Chief Operating Officer of Intermountain Healthcare, and Dr. Lee, a Harvard professor and Chief Medical Officer at Press Ganey, cite four instances of providers who’ve made the plunge. “In all four examples, the organizations’ short-term financial hits were real and painful,” they say. “Nevertheless, we don’t consider these efforts to be acts of charity, but acts of strategy.”

One example: At Mayo Clinic, surgeons who perform lumpectomies or partial mastectomies invest expensive extra time in the operating room to work with the facility’s pathology lab, and determine right then and there whether they’ve removed all the cancer. If they haven’t, they can immediately extend the surgical excision. The approach eliminates about 96% of repeat lumpectomies. Surgical costs are higher, and there’s less revenue to be earned from follow-ups, but overall, medical costs are reduced, and patients get peace of mind more quickly.


Three keys

Granted, stress Kaiser and Lee, short-term losses in the interest of long-term gains are easier to stomach when organizations have financial stability, positive relationships with physicians and advanced information systems.

But the needed investment, they add, is as much in leadership as it is in dollars.

Ultimately, providers are more likely to succeed if they recognize and manage the full continuum of care, focus on both prevention and intervention, and use evidence-based practices to ensure appropriate utilization.


More ingredients

When researchers for the American Hospital Association interviewed leaders at seven hospitals and health systems that were moving forward with the transition, several keys to success emerged, depending, in some cases, on the type of model being used (shared savings, bundles, shared risk or global capitation). Among those noted were:

  • Buy-in on the part of physicians and clinical leadership
  • A culture that’s aligned with organizational structures
  • Control throughout the care continuum, since providers are responsible for outcomes and costs even after patients are discharged
  • An understanding of population health and quality measures (so value-based reimbursement contracts can be better negotiated)
  • Affiliation and participation agreements with providers
  • Clinical protocols and coordinated workflow processes, especially in relation to discharge planning
  • Quality and utilization benchmarks and standards
  • Quality improvement and chronic disease management programs (since patient engagement is extremely important)
  • Registries and performance dashboards that track and report quality targets, and are accessible to all network providers
  • Technology capable of risk-stratifying patients and identifying high-cost patients, as well as being able to report and analyze quality, utilization, and financial metrics

Ultimately, the new paradigm is about eliminating waste, improving quality, and reducing costs. Payers can be expected to be attracted to the hospitals that are among the top performers. They’ll urge their members to use those high-performing facilities and incentivize them to do so. Patient volume will be the key to overcoming the initial loss of revenue.


Help is available

Moving from quantity of patients to quality of care is less daunting with assistance from CareThrough, which has leveraged more than 30-million patient encounters to help providers make the transition.

CareThrough’s expert care team assistants specialize in engaging patients to ensure that the right information is always recorded and conveyed; removing barriers, such as income, insurance, accessibility and availability; and coordinating care at every stage with regular check-ins and coaching.

Value-based care requires an entirely new way of thinking. Managing all the moving parts can be taxing and time-consuming. CareThrough eases the burden by identifying at-risk patients, closing gaps in care, and providing ongoing population health management services.

Michael Murphy, MD
Dr. Michael Murphy is co-founder and Chief Executive Officer of ScribeAmerica, LLC. He co-founded ScribeAmerica in 2004, and it is now the country’s largest and most successful medical scribe company with a staff exceeding 7200 employees operating in over 46 states nationwide. Today, ScribeAmerica is the recognized leader of the medical scribe industry and remains at the forefront of professional scribe education, training, and program management nationally. Dr. Murphy served as an Army Ranger for the 1st Ranger Battalion in Savannah, Georgia, which allowed him to gain various leadership skills along with the ability to develop standard operating procedures. He applies this to his daily duties for ScribeAmerica. Dr. Murphy has been a leader on multiple issues including scribe policy, hospital throughput, electronic medical record implementation and optimization of provider to patient ratios. His goals are to continue making all medical practice locations an environment built for an exceptional patient experience that allows providers to focus solely on patient care. Dr. Murphy received his Doctor of Medicine from St. George's University and completed his residency training in Emergency Medicine at the University of Medicine and Dentistry of New Jersey in Newark. He has co-authored one textbook and is involved in 3 peer review articles.
Posted In: CareThrough, Future of Healthcare, Quality, Efficiency, Utilization On: Tuesday, 24 April, 2018


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