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By Jamie Stewart, MBA, CPA

Earlier this month at The 2016 OPEN MINDS Performance Management Institute, we heard a lot from both payers and provider organizations about the system-wide move to value-based care:

My takeaway from these sessions? To prepare, executives of provider organizations need to be able to both manage financial risk and demonstrate their “value” to payers in terms of both performance and cost. To do that, they need to act now to find a way to combine fiscal data systems with clinical performance management to produce the data they need to manage payer-mandated performance requirements and value-based contracts.

But the question many provider organizations are asking themselves is, how? There are two phases to preparing your system:

First, they need the ability to “integrate” that data in some form of data warehouse. Second, they need to understand what information they need for performance management and the ability to use that data warehouse to produce real-time actionable performance reports.

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The data warehouse concept is about creating a system that pulls together all of your organization’s data into an integrated system. This includes your fiscal data, data from your electronic health record (EHR) system, payroll data, and clinical outcomes and wellness data. Many organizations have this data – but not in a way that allows it to be combined and analyzed together.

The data in your payroll and fiscal systems provide the raw data needed to track costs over time. But linking that cost data to the “outcomes” that your organization is achieving is more difficult. It is combining these two elements that allows the creation of a multidimensional array of data that lets you answer important questions that get to the heart of improving your organization’s performance: How do we run our business at the lowest possible cost? How do we achieve the highest possible outcomes? And how do we analyze the best practices that combines both?

So what are the actionable information that your team needs to manage value-based contracts?

  • Longitudinal Consumer Progress Reports – All of your consumers should have clear, meaningful, and replicable goals for their treatment. A goal progress report allows providers and stakeholders to see, at a glance, the progress an individual consumer, or group of consumers, are making (or not making). This report should include the consumer’s baseline rating and standard daily/weekly ratings, and direct comparison to expected trajectory to assess status.
  • Case Prioritization – Professionals, case managers, and supervisors should be able to identify cases with the greatest need and apply resources and support accordingly (as well as be held accountable to reducing risk and managing caseload effectively). Risk can be identified and sorted by various factors, such as individual risk (self-injury, suicidality, housing needs, etc.) and value-based risk (progress/outcomes lower than expected in relation to cost and service utilization).
  • Workforce management – Clinical supervisors and business managers should be able to make sure that cost is managed by ensuring that each service is provided by the most appropriate person. This means not having high-paid/degreed professionals providing basic services, unless the case warrants it due to risk. You can do this type of workforce management by examining staff roles, degrees, direct and indirect cost, services volume by type and cost, etc.
  • Risk Evaluation – Professionals and clinical directors should be able to evaluate weighted risk based on various variables, as well as how future changes to the numbers will affect cost and service needs based on advanced algorithms and/or predictive modeling.
  • Cap Rate/Case Rate Monitoring – Clinical directors, program directors, and other internal stakeholders should be able to see value in real time (progress/outcomes vs. cost) and use that information to make critical financial decisions and monitor specific contracts.

Of course, I would be remiss if I didn’t mention that having the reporting to track clinical, financial, and operational key performance indicators is not enough – but clinical and business managers need training in how to use data to analyze performance and develop and implement solutions.

Having the ability to use your financial and clinical data will allow you to “steer your own ship” – creating an organization that can demonstrate value and position your organization to compete. For more, check out my presentation from the institute, Transitioning Your Current Reporting & Performance-Management System From Fee-For-Service, To Pay-For-Value.

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