We’ve covered the growing use of pay-for-performance (P4P) contracting for health services (see P4P In Practice @Magellan, What Does The Future For Payer P4P Look Like? and A Look At P4P From The Ground Level) and the new experiments with pay-for-success (PFS) contracting for social services (see How PFS Contracting Just Might Change The Human Service Field and The First Social Impact Bond Project – Where Are We?). And, we’ve written several guides to how best to prepare for these new reimbursement models – Is Your Organization Ready For Social Impact Bonds?, Pay For The Performance You Want, and What Do Payers Want? They Want You To Define Your Value!.
But trends and readiness guides aside, it is always most instructive to hear from an executive who is actually “doing it” – delivering service under these value-based contracting arrangements. That was the case with the session Financing In Flux: Succeeding In The Era Of Value-Based Contracting, with a case study presentation by Daniel Fishbein, Ph.D., Vice President, Corporate Business Development, Jefferson Center for Mental Health. Dr. Fishbein presented what he thinks are the three key competencies provider organizations need to be successful in a value-based market:
- Develop Administrative Competencies
- Develop Management Competencies To Accept Value Based Payment
- Create Service Program Models
Develop Administrative Competencies – From billing to information systems, organizations need to “polish up” administrative functions to reduce cost and focus organizational performance efforts. Specific competencies include, payer contracting, consumer marketing, utilization review processes/metric management, tech use, managed care compatible documentation/electronic health record, and a knowledge of the services preferred by payers.
Develop Management Competencies To Accept Value Based Payment – Tracking the status of key performance measures on a regular basis and then managing to those numbers is a must for a performance-based contracting environment. Specific competencies include, use of decision support tools, customer service, HIE abilities, specialized financial management systems, provider claims and payment systems, referral capabilities, and the ability to analyze the competition and use market intelligence.
Create Service Program Models – Not all service models will be equally successful in a risk-based environment. Organizations need to focus on programs that have proven outcomes and are delivered in the community; services that keep the consumer out of emergency room care and hospitalization; program models that can service large groups of consumers; programs that integrate mental health with physical health and substance abuse, and programs where costs are market driven.
For deeper dive, check out the upcoming OPEN MINDS California Planning & Performance Institute session on August 21, Strategies For Revenue Diversification: Considerations In Moving Beyond Cost-Reimbursement Services, featuring OPEN MINDS Senior Associate, Joseph P. Naughton-Travers, Ed.M.