As CEO and leader of a care coordination technology start-up, I am thrown a number of curveballs on a daily basis. Changing development priorities, swiftly shifting market dynamics, the Centers for Medicare & Medicaid Services, new policies and regulations, and unconvinced prospects are among them.
The curveballs all look different, but I know they will be thrown and that going into any situation with cynicism and reluctance will never create the best outcome. When I think of the ongoing shift away from fee-for-service, I am reminded of its value. Whether anyone likes it or not, the era of value-based care is emerging.
When I say “like it or not,” I believe the majority of healthcare providers are in the “not” category. It’s understandable as it will require upgrades to cost accounting and billing systems, adjustments in clinical practices and an entire overhaul of revenue models in a market that’s almost 20% of the US economy.
But there is no stopping the shift to value-based care from fee-for-service, due in large part to new policies and programs from CMS. The agency has already reached its goal to tie 30% of payments to value by 2016 and aims to reach 50% by 2018. According to a recent survey by HealthLeaders Media, 94% of providers are pursuing some form of value-based care.
There are two emerging approaches for hospitals and healthcare systems facing these changes, and both come with challenges for organizations accustomed to fee-for-service payments. These two options include moving to full capitation and bundled payments for an episode of care. In the Harvard Business Review, Michael Porter and Robert Kaplan argue against this option because “capitation puts the focus on limiting the overall amount of care delivered without tying the outcomes back to individual patients and providers.” The authors maintain that the second option, bundled payments, has the potential to transform patient care by increasing accountability and motivating providers to coordinate with each other.
Voluntary pilot programs such as Bundled Payments for Care Improvement have succeeded in lowering costs and improving quality of care, leading CMS to introduce its first mandatory bundled payment programs in 2016 and 2017. Succeeding under these programs involves real, systemic change. Participants must build collaborative relationships with post-acute care providers in order to effectively monitor patients over the course of an episode of care.
CMS Administrator Andy Slavitt predicts that as the industry adjusts to these new models, “almost every surgical or medical area will want [to participate].” CMS shows no indication of slowing down and forward-facing providers are embracing the opportunity to tackle complex problems with innovative solutions.
In April, CMS launched its first mandatory bundled payment program, Comprehensive Care for Joint Replacement . This program, affecting nearly 800 hospitals across the country, focuses on a relatively low-risk group of patients, those undergoing lower extremity joint replacement. On July 1, 2017, CMS will expand CJR to include trauma cases and will begin a new program for cardiac care, affecting patients who are hospitalized for bypass surgery or heart attack treatment. This group of patients will require more complex care coordination than the majority of CJR patients, forcing participants to invest more heavily in both network building and care coordination technology.
For post-acute care providers in the regions affected by CMS’ mandatory bundled payment programs, these changes pose significant challenges but also offer substantial opportunities. Providers that are flexible and open to change will be able to form lucrative partnerships with participating hospitals. High-quality providers will be indispensable to hospitals coordinating care for high-risk patients.
These are some key factors that will lead to success:
- Know which hospitals are participating in bundled payment programs and partner with them. Post-acute care providers that proactively collaborate with hospitals in their area are likely to see more patients and, consequently, be more successful. John Cherf, M.D., Chief Medical Officer at PinpointCare, says, “Hospitals and health systems are working to engage their physicians and medical staff to optimally manage episodes of care. PAC providers should do everything they can to be a part of these discussions to ensure they are part of future value-based solutions.”
- Be an active participant in care coordination. Communicating with your partners to ensure each patient receives the best care is at the heart of every bundled payment initiative. Each patient should receive a level of care that is consistent with their health status – no more, no less.
- Know your data. If your actual lengths of stay are consistently longer than what the care plan recommended, or if you experience a high rate of readmissions, you need to know why. You may need to change how you care for patients with certain comorbidities or psychosocial factors, or you may need to work with your partners to communicate more effectively.
Perhaps the most important factor in achieving success is to acknowledge that the momentum in favor of value-based care is too powerful to stop. Yes, many providers have balked at or objected to aspects of this change, particularly that they are mandatory.
But halting this train is no longer an option. Details can and should be debated but this upheaval in healthcare delivery has defeated the status quo. The cynicism and reluctance to which I alluded is just an albatross. Providers who act to adapt now will have an edge in the market.
Joel Splan is the Chief Executive Officer at PinpointCare.