The other day, Monica E. Oss and several of my colleagues took a look at how the shift to managed long-term services and supports, coupled with the move to value-based care, is posing a double challenge for many provider organizations (see For Many Provider Organizations, The Shift To Managed Long-Term Care Is A Double Whammy).
As the former chief executive officer of a community mental health center (CMHC), it got me thinking about the many challenges facing provider organizations as part of this conversation. While CMHC executives have long believed that the fee-for-service payment system was not a sustainable model for serving the most ill individuals, I’m not sure that the leap to value-based contracts will be seen as a solution – at least not immediately.
First, there is the concern about the “performance” side of the value-based reimbursement. Many behavioral health providers, including community mental health centers, give priority to serving people with serious and disabling behavioral health disorders. Payers and provider organizations have had great difficulty defining “quality.” While standardized behavioral health quality measures are in development, they are not yet uniformly recognized in the professional community. And, payer performance metrics are often geared to client populations with less severe disorders and may penalize providers serving a disproportionately more disadvantaged population.
Then, there is the investment issue – with concerns about critical mass, infrastructure development, and capitalization. Value-based reimbursement hasn’t been of sufficient magnitude for executives of behavioral health provider organizations to make the considerable and costly changes necessary to convert to a value-based payment environment. Value-based contracting requires new investments in manpower and technology to make the transition. And finally there is the capitalization issue. The current reimbursement environment doesn’t allow many provider organizations to develop “reserves” that can be used for these investments.
Where to start when addressing these issues if you’re an executive of a community behavioral health organization? The capacity to contract for and manage value-based reimbursement will require provider organizations to take five key steps:
- Provide a proven continuum of services: Managers of provider organizations need to develop a continuum of services in which they can demonstrate improved cost, efficient clinical outcomes, and client satisfaction. For many provider organizations, getting the appropriate services in place may require mergers, acquisitions, partnerships, or consolidation.
- Know and manage to costs: Executive teams must understand what it costs to deliver services – and then manage those costs by eliminating waste and streamlining services and organizational structure.
- Measure quality metrics: Executives managing performance must determine and continuously measure quality metrics with the objective of pinpointing opportunities to improve quality and manage cost.
- Prove a business case: To gain new value-based arrangements, executives must develop a strong business case for their continuum of high-quality and cost-efficient services and be prepared to market those services to payers.
- Invest in the necessary technology: Managing a successful value-based contract requires an investment in a sophisticated technology infrastructure capable of collecting, reporting, and analyzing patient population quality and financial performance data. This requires technology far in excess of historical investments to keep up with the demands of a value-based market.
The recently concluded election resulting in a Republican President and Republican control of Congress has engendered considerable concern about possible health care changes. However, the forces driving health care change are not specific to what party is or is not in control. The unsustainable pace of health care spending will result in efforts by payers, consumers, and providers to advocate for changes in their approaches to payment.
For more, check out these resources from the OPEN MINDS Industry Library:
- Exactly Where Are We With Value-Based Reimbursement?
- Value-Based Payment Hits The Tipping Point
- Remaining Profitable In The Transition To Value-Based Payment
- The Management Transition To Value-Based Reimbursement Is All About The Performance Metrics
- Will Value-Based Payment Happen & Will It Work (For Us)?
And for even more, be sure to join my colleague and OPEN MINDS senior associate, Ken Carr on February 16 in Florida for The OPEN MINDS Performance Management Institute session, “Consumer-Centered Access, Referrals & Decision Support – Best Practices In Population Health Management.”