These are the “four Ps” of “change ready” executives according to Kimberly Pack, in her recent Forbes article, How To Lead In Times Of Change. This is exactly what we need right now in health and human services. Every organization—whether payer, health plan, technology company, or provider organization—needs a team of “change ready” executives to help the organization and its staff adjust to the transition brought by the “volume to value” shift.
The transition from “volume to value” is characterized by new business models, more competition, more technology, regulatory and policy uncertainty, and a focus on performance metrics. To successfully manage and prepare for that change requires the development of new operational competencies (see How To Build Your Tech Infrastructure For Value-Based Reimbursement and The Value-Based Reimbursement Steeplechase), the ability to build new partnerships (see How To Make A Value-Based Partnership Really Work and The Winding Path To Provider Partnership), and the development of new services and treatment programs (see Value-Based Reimbursement As Clinical Best Practice Driver and Catching The Wave). But it also requires the ability to manage change and build a supportive culture for to help manage the transition for your team.
So think about your executive team. Have they embraced the “4Ps”?
First on the path to managing change is to be present. This comes down to being mindful and present of your own management style (and reactions) as you and your team manage this transition. Making a successful shift to VBR demands a clear strategy and a continuous focus on the execution of your plan.
Second, be positive. The executive team needs to—despite the uncertainty—look to the opportunities in this change. Not just the problems. It’s crucial to share the reasons for the changes that are happening across the organization and the vision for the new future. Executive teams should model the actions and behaviors you’re looking for in every staff member. My colleague, OPEN MINDS, Senior Associate Sharon Hicks noted the importance of including your staff, including the direct care and supervisory teams, in the plan for sharing the gains:
“Success” at the VBR level has got to be a team effort. There simply is no other way for enterprise-wide performance to achieve the necessary requirements. An engaged and incentivized staff will work as hard, or harder than you, to get that money in their pockets.
OPEN MINDS Chief Operating Officer Stacy DiStefano also noted the importance of getting your team “on board” and engaged in this transition. In particular, she noted the important role that the finance team plays in the move to VBR:
Every executive should have a VBR readiness conversation on their monthly meeting agendas.The greatest impact in any reimbursement model shift will be in the finance department, so its essential for the chief financial officer and their revenue cycle management team to be leading that charge.
Third, be proactive. For most specialty provider organizations, the transition should be a gradual process, with a heavy focus on building the infrastructure for VBR in the beginning and flexible planning that allows for some initial errors. That may not always be possible, but there is much that executive teams can do long in advance of major system changes in their market. Ms. Hicks advised that when preparing your team, its best to start small and propose a VBR model in one specific program so that you minimize the potential risks. She also suggested two practical steps to ensure that your team is positioned for success:
One, ask for indemnification for the first year. Payers will often be willing to moderate the risk inherent in VBPs for an initial period. Remember, your success is their success. You can ask for shadow programs in which the data are collected and analyzed, but the amount lost or gained will be withheld for a specific amount of time.
Two, budget as if you are going to fail. In the initial period, don’t add any rewards of VBR to your annual budget. That ensures that the worst case scenario is: you will fail and can still meet you budget. The best case scenario is that you will succeed and have a positive budget performance. Remember, an “all or nothing” mentality is a final act, not a sustainable strategy.
Finally, and most importantly, be prepared. Every executive should know the list of organizational competencies that are required for success in the new and start building those competencies now. (And, I like to add there is much that can be done with a minimal investment of dollars.) To ensure that your team is ready to manage these partnerships, Ms. Hicks offered three concrete steps to make sure your organization is prepared to successfully manage VBR contracts:
First, invest in analysis. Even if you have to get outside help to do so, make sure that you fully understand the risks and rewards of any VBP. That means you must understand the data. Assure that you can mirror the analysis that the payer is going to do to determine the final outcome of the program so that you can tweak the model, and your performance, throughout the year. Otherwise, you are flying blind and that will not work.
Second, assure that any contract that you sign has measurement methodology completely spelled out. Due diligence before you are at risk is the name of the game, and like analytics, seeking outside consultation is the key if there is any doubt that you can’t handle this in-house. You must fully understand the factors that might lead to a poor performance.
Third, build multiple models of potential outcomes, and have a deep understanding of the factors involved in analysis. For example, if your population is very small, then one adverse event could affect your whole score. Fully understand how significant outliers that are not in your scope could have major bearing on the outcomes, and build in statistical models for inclusion or exclusion of these scenarios.
For more information to help increase your confidence in mastering the transition to VBR, check out these resources from the OPEN MINDS Industry Library:
- Pay For Value-The Glass Half Full, The Glass Half Empty?
- Are Your IT Systems Ready For Value-Based Reimbursement? Take The Quiz
- Can Success With Value-Based Reimbursement Happen Without Analytics?
- I/DD & Managed Care? There Will Be Requirements
- The Future Has Arrived For VBR
- Planning For A Risk-Based, Community-Focused I/DD Market
- Will A Focus On ‘Value’ Improve U.S. Health System Performance?
- The New Cultural Competency: Ability To ‘Turn On A Dime’
- VBR Jumping From Hospital-Centric ACOs To Community-Based Players
- Pain Points Matter
For more, be sure to join John F. Talbot, Ph.D., Chief Strategy Officer at Jefferson Center for Mental Health, and OPEN MINDS Advisory Board Member, on September 19 at The 2018 OPEN MINDS Executive Leadership Retreat for his session, “The New Leadership Challenge: Culture & Change Management In A Value Based Market.”