Value-based Payments for Healthcare

Is ‘Value’ Getting a Bad Reputation?

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At a recent meeting of chief financial and medical officers, one CMO said that before he’s able to get physicians on board with the idea that you can get better outcomes by following best practice vs. individual practice, he has to first help his physicians overcome the notion that “value” is just code for cost control.

The tipping point from volume to value is on the horizon. According to Leavitt Partners[1], 70% of providers will move to value-based payment models in healthcare by 2020. With less than 30% in the value-based camp today (also according to Leavitt Partners), clearly there is a lot of ground to cover during the next few years. But speakers and attendees at Leadership Perspectives: Best Practices in Clinical and Financial Collaboration say the change is coming. A program conducted by the American College of Physician Executives, the Health Financial Management Association and McKesson, Leadership Perspectives is designed to facilitate dialogue among chief financial and clinical leaders as they adapt to healthcare reform and navigate advanced payment models. It’s no surprise that the main topic of conversation, in each city where Leadership Perspectives has been held, is: How do I enlist physicians as true stakeholders in my organization’s financial performance and shift toward value-based payments for healthcare?

Progressive organizations such as UniNet Healthcare Network, Sharp Rees-Stealy Medical Group, Rush University Medical Center and Mercy Medical Center are meeting healthcare reform head-on. They use analytics to showcase and encourage best practices of top-performing physicians while steering low-performers toward a path of better clinical outcomes at lower cost. They’re also targeting patients, using analytics to stratify high-cost populations. And health coaches and navigators intervene to prevent gaps in care and direct care to the most appropriate setting – definitely not the ED and likely not inpatient. Because in the future, providers will shift from inpatient admissions (aka, volume) to attracting and retaining desirable covered lives through value.

Do you think the volume- to value-tipping trend  is coming soon? Why or why not? Please leave a comment on this blog and let us know what you think.

To hear excerpts from Leadership Perspectives and find out what attendees are saying about CMO and CFO accountability for quality and financial metrics, visit our website.

[1] Value Based Market Intelligence Overview, Leavitt Partners, 2013


One thought on “Is ‘Value’ Getting a Bad Reputation?

  1. David Block MD, PhD

    1) What in this post would lead me to conclude that “value-based purchasing” is anything OTHER than “cost control”? Wouldn’t reporting a sentence or two from that Chief Medical Officer defining “value” be, well, valuable?

    2) Why should any reader who notes the participants of your conference – the ACPE, the HFMA, and McKesson – conclude there will be any transformational conflict resolution? I know you folks want to “facilitate dialogue,” but a dialogue among “clinical leaders” (whatever that means; hospital exec’s like that term, of course) and “chief financial leaders” (ditto, unless you just mean the local CFO, who likely has little understanding of clinical reality, including what it means to actually be sick or take care of sick people) might make you guys some consultation dollars without preparing the field for the RIGHT harvest. Where are patients? Where are the local family docs?Journalists who can translate “VBP” into ordinary language? Mediators and folks who resolve conflicts in the community (rather than experts who lecture in law schools)? Community organizers (although, of course, this is a bad word since the ’08 election)? Elementary and secondary school teachers who are smart enough, and engaged enough, to work with children – so that they can bring the message home? I could go on.

    3) I am a retired health care consultant; my old employer was recently bought by Nuance. I met folks from McKesson in airport lounges all over: they were good eggs, no better and no worse than us, or folks from PWC, or DeLoitte, or Cap Gemini (which says how old I am). We knew each other by our antiquated laptops, and our ICD and CPT codebooks, heavily annotated and bookmarked. We were pretty much motivated by the same things, i.e., making connections, keeping relationships going, getting kids into the right colleges. I’ve attended your conferences – been paid well – and found that more often than not, conferences of experts result in stuff to tell the Board, stuff to put in newsletters, and most of all, stuff requiring more conferences of experts.

    Why don’t you try working it from the bottom up? Why don’t you try engaging the folks who have to actually commit to “value” because it’s their lives – in WalMart, and churches, and FFA meetings, and even in Doctors’ Lounges (where every doc is devoted to “value” in the free lunch and the upholstery and the quality of the toilet paper)? Their lives, and the lives of their families and friends?

    I’ll bet you that McKesson has more than enough MBA’s and MHA’s and PhD’s and MD’s for everybody. You want to have an “outcomes-based intervention”? (Really, who came up with that?) Didn’t your mom show you that an awful lot more gets resolved around the kitchen table than the conference table?

    Good luck. To you, and to all of us. Would that it were only a matter of luck.

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