Yesterday, my colleague Ken Carr discussed the challenges facing organizations shifting to a more data-driven culture thats embrace metrics-based management tools (Making Your Clinical Team Data Driven). When faced with this challenge, many executive teams second guess both their commitment to building a performance-driven culture and their organization’s ability to meet that challenge.

This was the topic of The 2017 OPEN MINDS Executive Leadership Retreat session, Is Your Culture Performance-Driven? How To Build An Organizations Focused On Performance Management, led by John F. Talbot, Ph.D., Chief Strategy Officer, Jefferson Center for Mental Health; and David Wawrzynek, Chief Financial Officer, Spectrum Human Services, an $18 million community behavioral health organization in upstate New York.

Mr. Wawrzynek started by describing his challenge—there is lots of change in New York with increasing use of performance-based contracting. All Medicaid services (with a few temporary exceptions) are paid through managed care organizations and the state is participating in the national Certified Community Behavioral Health Clinic initiative, having designated 16 Clinics throughout the state. And by 2020, 90% of Managed Medicaid will be delivered under some performance based  model (see our coverage in State-By-State Analysis Of Medicaid MCO Requirements For Provider Alternative Payment Models: The 2017 Update, Do DSRIP Programs Predict The Future Of Behavioral Health Value-Based Reimbursement?, and 75 Behavioral Health Provider Organizations In 8 States Prepare For CCBHC Demonstrations). Organizations are under great pressure to perform, and this is a permanent change in policy and practice.

How did Spectrum approach these market challenges? First, they took the time, effort, and research to engineer a roadmap to move their organization from “where they are, to where they need to be.” Mr. Wawrzynek explained:

We all say we do quality improvement across the organization, all the time—no we don’t. You need the leadership skills, the process, and the infrastructure all in place. You need to engineer a road map, and then you have a performance-driven culture. I think we struggle with continuous quality improvement. That’s a very hard thing to do. The training, the education, and the tech—you have to continually reinvest yourself. Finding those kinds of resources can be very difficult.

As we move toward value-based payments, the way the organization defines and measures performance has to change along with it. Once you put revenue at risk, based upon clinical outcomes, you need a new set of metrics and processes to manage this risk and reward performance.

The market changes are redefining performance toward measures of quality, value, and efficiency. In response, new data collection tools need to be created, workflows and staff responsibilities need to be modified, data analysis tools have to be more sophisticated, and new clinical practices need to be implemented. One of the challenges is making these structure and process changes in a manner that truly returns a greater value to the clients we serve.

His experience illustrates a best practice approach. Building a performance-driven organization isn’t just about a commitment to quality, it requires a three-fold approach based on infrastructure, processes, and culture:

1. Organizations need to build an infrastructure that provides the tools and supports necessary for data-driven decision making. This includes building IT and financial systems, creating data collection and review processes, and ensuring that staff have the required skills, training, and education (see Building A Technology Infrastructure For Value-Based Care: Tech To Support Performance Management).
2. Organizations need processes in place that are focused on building a data-driven approach to management. From revenue cycle management and corporate compliance, to continuous quality improvement and managing populations, your organization needs to have established processes that will give your team the systems, tools, and competencies they need to focus on performance (see Understand Your Data, Make Decisions Quickly & Fail Fast).
3. Organizations need to promote a culture that supports data-driven decision making. This may be the most difficult component—a continuous focus on quality improvement requires dedicated leadership, a commitment to process improvement, and a constant commitment of resources to the goal of improving performance (see Is Your Culture Performance-Driven? Ask Yourself These Six Questions).

Mr. Wawrzynek explained how these key elements evolved at Spectrum:

At Spectrum, we really had to decide what those elements needed to be. My job is to move the concepts into practice, and to do that I need dynamic data. That means the ability to see how it compares to yesterday, and how it’s changing over time. You just can’t do that in a static environment.

You need to understand the cost at each of your services, and then drive it down to the individual consumers, and to each consumer touch. You need the financial structures in place to do this, and you need to invest in knowing how to use the data you are generating. I don’t know how many times, the further down you drill, you start finding relationships that you didn’t know existed, and information that will be valuable to you.

We also have to understand our populations and use evidence-based practice to understand the client we are serving. That gives you strength in negotiating. I don’t think we often get to negotiate from a position of strength, which is why you can be relatively strong by knowing how valuable you actually are.

As Spectrum’s experience shows, building a performance-drive organization isn’t a one-dimensional challenge that can be solved by investing in new technology or a new training program—it requires a reinvention of all the elements of your organization to focus performance and constant reinvestment in continuous performance improvement.

For more, join my colleague and OPEN MINDS Senior Associate Ken Carr on February 15 for his session, “Using KPI To Manage To Improve Performance & Manage To The Market”, at The 2017 OPEN MINDS Performance Management Institute.