We’ve written a lot about the move to value-based reimbursement—what is happening, the contract types, and the provider organization management challenges. To help provider organizations navigate these challenges, my colleague Ken Carr has developed a readiness assessment for value-based reimbursement (VBR), focused on the organizational and technical competencies needed to make the transition successful. While mastering those “tactical” competencies is essential, executives of provider organizations also need to consider the organizational strategy and culture challenges that come with VBR.
I recently came across a handy list that outlined the strategic issues related to the VBR transformation in the Hospitals & Health Networks article, Transitioning to Value-Based Care: 7 Best Practices. The reason that I like this “hit list” is that it reflects my experience working with provider organizations to make this strategic and cultural transformation. In this list, I saw four strategic challenges:
- Weigh your ability to scale, and act on it
- Invest in staffing for the new model
- Partner with other community organizations
- Rethink how you measure “success”
And three cultural transformation challenges:
- There’s no substitute for quality
- With interventions, one size does not fit all
- Timing is everything in care intervention
What is my big takeaway from these lists of challenges? On the strategy side, scale matters. Your organization may be too small and the VBR opportunities available to you in your current footprint may be too small for the infrastructure investment and financial risk that VBR requires. Part of that infrastructure expense is not just the technology, but also the talent. It’s not a matter of “recycling” current staff in new positions—a new skill set is required. Partnerships are one way to gain some aspects of scale (and talent), but may not be the total solution. And, in this transition, provider organizations will need a reframe about what is “success.” Consumer-centric and payer-centric views of performance need to replace traditional productivity and process measures.
While those strategic challenges are daunting, I think the cultural transformations are more difficult. Quality is key, but quality (like value) is often in the eyes of the beholder. With new treatment interventions coming to the market on a regular basis, provider organization’s clinical leadership will need to become adept at adding new consumer treatment options to their service offerings—even if those new treatment options cannibalize current revenue streams. Lastly, there is the need for nimble administrative and clinical management teams. Speed to action shapes both customer satisfaction and resource use in health and human service systems. The teams with rapid actionable information—that act on that information—are the teams that are going to succeed.
As we discussed these challenges, my colleague Ken Carr noted that preparing your organization for VBR requires building a culture and management infrastructure that is centered on data-driven decisionmaking and rapid cycle improvements:
There are a number of tools that can be used to move along the change and innovation required for value-based contracting—for instance, data mining, business intelligence, lean services, root cause analysis, and KPIs. But ultimately a shift in business model requires a change in culture. And a first step in this cultural transformation is presenting the reality that the current way of providing services will not be sustainable in the future. Creating a new culture involves having the right people with the right skill sets, a cross-departmental approach to analyzing data and identifying solutions, and a management structure that supports rapid cycle improvements based on data. Ultimately a new data-driven culture does three things:
- Strategically collects data and analyzes that data against performance outcomes and benchmarks.
- Identifies ways to improve the outcomes and targets process changes to implement those changes.
- Confirms, communicates and rewards those improved outcomes.
The new culture values accurate timely data, integrates data from multiple sources to understand all aspects of the service, implements timely, targeted interventions and assesses the impact, and scales up those interventions that improved outcomes.
For more of Mr. Carr’s work from the OPEN MINDS Industry Library, check out:
- Your Tech Functionality Checklist For Value-Based Reimbursement
- Value-Based Reimbursement & Accounting: Show Me The Money
- Preparing For Value-Based Reimbursement (Coffee Break Case Study)
- Changing Accounting Rules & The Shift To Value-Based Reimbursement
- Becoming A ‘Blue Chip’ Provider Organization
- Technology & Reporting Requirements For Population Health Management: Preparing For Value-Based Reimbursement
- Connecting The Dots From Data To Value Knowledge Partner
- Transforming Ideas To Innovative Gold
- Making Your Clinical Team Data Driven
- Preparing Specialty Provider Organizations For Value-Based Reimbursement: An Overview Of Competencies Required For Success
For more on adapting your organization’s strategic use of data and new tech tools, mark you calendar for October 22, 2018, where OPEN MINDS Senior Associate, Joseph P. Naughton-Travers, Ed.M. will present the executive seminar, Building A Technology Infrastructure For Value-Based Care: A Guide To Incorporating Technology Into Your Organization’s Strategy.