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2017 Brings Continued Transformation to Healthcare, Driving Innovative Approaches, Solutions, and Experiences

Posted by Matthew Smith on Jan 17, 2017 12:51:21 PM

shutterstock_318054779.jpgIn an industry now characterized by constant change, 2017 will bring continued transformation to the nation’s healthcare system. Our annual outlook for the coming year forecasts the trends related to the likely changes to the Affordable Care Act ("ACA"), adoption of value-based payer models, and emerging consumerism will drive a greater need for cost reduction and innovation. Here’s a look at the trends and factors that will impact the system during the coming year:

Macro Trends

A number of significant macro trends are at play, driving the need for change. These include:

  • U.S. healthcare costs are rising faster than inflation.
  • U.S. healthcare expenses per capita have been historically low compared to the previous few decades; however, those costs are expected to rise over the next few years.
  • There have been cumulative increases in health insurance premiums and workers’ contributions to premiums compared to the rate of inflation and the rise in workers’ earnings.
  • Between 2014 and 2060, the size of the population age 65 and older will have more than doubled to 98 million.

Consolidation in Many Forms

  • Mergers and acquisitions among providers will continue and expand on an even grander scale as regional players, as well as large, multi-state systems, such as Dignity/CHI, explore the benefits of consolidation. The need to serve larger populations to succeed in risk-based payment models has prompted many systems to join forces. Expect statewide or multi-state population health collaboratives or joint-ventured population health service organizations. "In addition, traditional healthcare providers will seek endeavors with experts in urgent care, retail medicine, outpatient surgery, post-acute care, occupational health and digital health to take advantage of ‘best in class’ care and business expertise. Some systems will discover they have over-extended, or need to pause and integrate what they have acquired, formed, or merged into," said Laura Jacobs, MPH, president, GE Healthcare Camden Group.
  • Similar dynamics will impact the payer landscape. Regardless of whether the Federal Trade Commission approves mergers between Anthem/Cigna and Aetna/Humana, many markets may have more limited insurance options. With the uncertainty in the future of Health Insurance Marketplace or insurance exchanges, given expected changes to the ACA, payers will carefully weigh the benefits of offering select products market by market. In addition, as Medicaid shifts to managed care in many markets, experienced payers, such as Molina Healthcare, are increasing their national footprint. Medicare Advantage payers rated less than four stars will experience increasing difficulty to compete, resulting in growing membership in the higher-rated plans.
  • Finally, the lines between payers and providers will continue to blur. In some markets, regional health systems have moved into the payer marketplace -- often as a Medicare Advantage plan or a plan to cover the health system’s own employees -- to create competition and affordable options for their consumer base. Some payers will be increasingly open to partnerships with providers in launching new health plan products or delivery models.

Payment Models: Focus on Value

  • Regardless of the specific changes that may come with changes to the ACA, payers (Medicare, Medicaid, employers, and commercial insurance carriers) will seek ways to lower costs and improve the experience (quality and satisfaction) for patients.
  • With Medicare setting the trend, payment models have shifted to include performance measures, based on factors such as hospital-acquired conditions, readmissions, patient experience and quality scores. Bundled payments are still being pursued by commercial carriers, and, for now, Centers for Medicare & Medicaid Services ("CMS").
  • The Medicare Access & CHIP Reauthorization Act of 2015 ("MACRA") will have a significant impact on physicians, while CMS allows different paces of entry. These changes mean that physician payment will depend more on quality, patient experience, use of electronic medical records and resource utilization. Even in markets where risk-based models (downside risk, capitation or percentage of premium) are not yet practiced, private commercial carriers have adopted CMS approaches, including models such as accountable care organizations, pay-for-performance, and bundled payments. As a result, this will require smaller physician practices to seek assistance to report required metrics – or join larger practices or systems that have the required infrastructure.
  • Overall, one of the most difficult challenges for healthcare organizations today and for 2017 will be harmonizing population health strategies with the market’s movement to value-based payment; moving too fast or too slowly will affect financial performance.

Cost Drivers: Pharmacy and Behavioral Health Under Scrutiny

  • While inpatient and physician care account for the majority of healthcare costs, pharmacy costs have been increasing at a faster pace, a trend that is likely to continue into 2017.
  • The new year also will bring a greater focus on behavioral health. Because individuals with mental health disorders often have higher medical costs and tend to use emergency departments more frequently, behavioral health also will engender greater scrutiny. This is a particular concern with the Medicaid and dual Medicaid/Medicare population, when behavioral health is often untreated, or other socio-economic conditions, such as lack of housing and poor nutrition exacerbate health risks. Social determinants of health will be raised more frequently as factors to consider in population health programs, requiring health systems to connect with community service organizations to drive better outcomes and better health for at-risk individuals.

 Cost Reduction: The Pressure Is On

  • Many hospitals have experienced relatively stable financial performance over the last couple of years -- some, even better than expected due to a rise in volume, particularly in outpatient services. Yet other issues will come into play moving forward. Higher employment rates and expanded coverage for individuals through the ACA have increased demand at the same time the nation is experiencing primary care shortages. High emergency department volume will place increased pressure on inpatient capacity, operating room schedules and care management resources.
  • Lower rate increases also amp up the need to reduce costs. Facilities must manage patient throughput even more efficiently and reduce variation through defined work flows and clinical protocols. Precious resources, like hospital beds and ORs, must be optimally utilized to avoid potentially unnecessary capital outlays for new bed towers or surgery centers. Some leading hospitals are exploring capacity command centers commonly used in complex industries such as aviation and power. These initiatives combine systems engineering principles with predictive analytics to manage and optimize patient flow, safety, and experience.
  • The physician enterprise, which in most cases operates at a loss, must be managed to optimize physician time and align compensation models with goals and population health strategies.

Innovation: Delivering New Experiences and Approaches

  • Consumers will exercise more leverage, forcing providers to focus on the “consumer” experience – not simply the “patient” experience. This concept encompasses physical space, logistics, communication, and an organization’s approach to care. As systems expand, this means providing a consistent consumer experience across the continuum and locations. Rising deductibles will contribute to increasing selectivity, as will new disrupters in the digital and care delivery space. Issues to focus on include price transparency; access -- where, when, and how the patient desires; quality reporting; social media strategies; and digital outreach to create consumer awareness and loyalty.
  • Care models will continue to evolve in 2017 thanks to the explosion of mobile technology, applications for home and self-monitoring, and expansion of urgent care facilities and retail care centers. New digital tools and approaches to primary and complex care will emerge, backed by private equity and employers. One component of this trend, telemedicine, will expand beyond rural areas into the mainstream for the convenience of consumers who prefer not to leave their home or office. Home and self-monitoring will provide more responsive care to the elderly and other patients with complex conditions. These dynamics expand the geography of competition, which could arise from anyplace accessible by cell phone. To remain competitive, health systems will have to partner with entities providing these options, adopt them, or devise their own solutions.
  • After making significant investments in electronic medical records and a plethora of other information technology ("IT") tools -- financial systems, data warehousing, care management, predictive analytics, disease management, and scheduling among them – there’s a new dynamic at play. During 2017, healthcare systems will focus on getting these systems to work together to optimize decision-making and forward-looking actions. It will be essential to have a clear data governance structure and system architecture focused on required operational and clinical outcomes.
  • Looking ahead, artificial intelligence (for example, IBM’s “Watson”) and the “internet of things” (the way digital equipment “talks” to each other) will change the roles and responsibilities of healthcare providers and team members, as well as care pathways.
  • Expect additional traction on noteworthy clinical advances:
  • Precision medicine based on the genetic profile of an individual will be more accessible, particularly for cancer care, but not yet mainstream. But watch this trend; it could accelerate rapidly.
  • 3D printers will enhance the ability to replace organs and tissues, but for now remains largely in the province of research labs.
  • Robotics will continue to be used in operating rooms and will begin moving to the bedside, lifting, moving, or even interacting with patients.
  • Academic medical centers may discover expanded opportunities to partner with community providers to research and deploy new clinical treatment options.
  • In an industry where labor costs still comprise the lion’s share of operating expenses, workforce management has always been essential. Today, the responsibilities of clinicians and non-clinicians are also changing as health systems transform in response to population health and value-based care models. Generational differences and job burnout from constant change and rising expectations will require new approaches to recruitment, talent development and training, workforce management, and engagement.

Topics: Payment Models, Care Model Redesign, Healthcare Transformation, M&A, Healthcare Innovation

MACRA: How the New Merit-Based Incentive Payment System Will Impact Physician Practices

Posted by Matthew Smith on Jul 14, 2016 4:15:34 PM

By Lucy Zielinski, Vice President, and Nidhi Chaudhary, Consultant, GE Healthcare Camden Group

MACRA_Image.pngHealthcare delivery and its corresponding costs are changing due to recent industry trends. Value-based programs reimburse healthcare providers for the quality of care they provide to patients. To support this, the Medicare Access & CHIP Reauthorization Act of 2015 (“MACRA”) intends to reform Medicare payments to physicians over the next several years. MACRA has two pathways:

  1. The Merit-Based Incentive Payment System (“MIPS”)
  2. Alternate Payment Models (“APMs”), which will take effect starting in 2017.

In order for practices to survive and compete in this value-based environment, specific initiatives must be deployed this year. 

MACRA1.png

Transitioning to the MACRA MIPS model

There are currently multiple quality and value programs for Medicare providers: Physician Quality Reporting Program ("PQRS"); Value-Based Payment Modifier; and the CMS EHR Incentive Program. 

MACRA streamlines those programs into MIPS and adds a fourth category called Clinical Practice Improvement Activities. Below is an example of MIPS Scoring for Year 1:

MIPS1.png

Challenges Faced by Physicians:

  • Uncertainties surrounding the shift from volume-to-value
  • Potential reduced reimbursement for services
  • Tracking of quality and cost management
  • Optimizing electronic health record (“EHR”)/registry use

Key MACRA questions for medical groups:

  • What does the current Quality and Resource Use Report (“QRUR”) tell you?
  • What is the implementation plan for 2016 and 2017?
  • What are the right measures that should be tracked and reported? Are workflow changes required?
  • What clinical practice improvement activities will be added?
  • How will the current infrastructure support the initiatives?
  • Is additional technology required?
  • How will the composite score be optimized?
  • Do we have adequate resources and education opportunities to be successful?

How can GE Healthcare Camden Group help organizations create and navigate a MACRA roadmap for 2017?

We help organizations:

  • Identify gaps and priorities by performing a MACRA readiness assessment
  • Help groups form and facilitate a steering committee with a shared vision
  • Integrate change management methodologies to ensure success
  • Create education and communication plans
  • Develop a tactical MACRA roadmap focusing on strategic and operational objectives   
See our sample work plan and timeline below:

MACRA_Roadmap.png

If you want to get started with your own, personalized MACRA roadmap, click the button below and a GE Healthcare Camden Group MACRA expert will be in touch to start you on your way.

MACRA


ZielinskiL.jpgMs. Zielinski is a vice president with GE Healthcare Camden Group, with over 20 years of experience in the healthcare industry. She specializes in helping private and hospital-owned medical practices achieve top financial performance by guiding physicians through practice development, strategic planning, coding and revenue cycle process optimization, and electronic health record system implementation. In her health system leadership roles, she has successfully managed the revenue cycle for over 2,000 physicians. Additionally, Lucy has led engagements with physician billing companies that involved restructuring operations and development of dashboard reports. She may be reached at lucia.zielinski@ge.com.

ChaudharyN.jpgMs. Chaudhary is a consultant with GE Healthcare CamdenGroup specializing in delivering strategies, working to provide more efficient and lean processes as well as coaching leaders and management. Ms. Chaudhary joined GE Healthcare in 2007 and has extensive experience in Regulatory Affairs and Quality Engineering pertaining to both medical and pharmaceutical devices. Ms.Chaudhary has provided support for strategic and business planning while working within the business and with the medical staff at multiple hospitals. She may be reached at Nidhi.Chaudhary@ge.com.

 

 

 

 

Topics: Value-Based Care, Payment Reform, Value-Based Contracting, Lucy Zielinski, Payment Models, MACRA, MIPS, Nidhi Chaudhary

Initiative Governance: Is Your Team Organized to Drive Decision-Making, Make Change, and Improve Culture?

Posted by Matthew Smith on May 2, 2016 11:59:25 AM

By Vesna Gernot, MBA, Vice President, and Nehal Koradia, RN, MBA, Manager, GE Healthcare Camden Group

Initiative GovernanceThe term “Governance” will lead some to think of their Board of Directors or the dozens of committees that some organizations have collected over time. We use Governance more broadly—as the foundation for a focused transformational effort and the engine to sustain performance gains. Initiative Governance is a critical component to any group of people working together to drive change—it nurtures or reshapes the culture and ultimately affects how work gets done.

In this context, Governance applies to an enterprise initiative, program, service line, or functional area. And the need for Initiative Governance is growing with new payment models driving integration across groups that, in the past, have individually provided direct care for the patient but have never had to be truly, directly accountable to each other – such as bundled payment programs or patient experience across the care journey.  

For illustration purposes, surgical services is a great example of how individual politics and incentives might cause misalignment. Most surgical service lines or OR departments have had a committee structure for years, but leaders commonly acknowledge that surgeons don’t attend, meetings are infrequent, real decisions aren’t made, and the “committee” becomes a forum for turf wars and complaints. The unintended results can be mounting frustration over inaction and overall distrust. (Click here for a related post on surgical services.)       

In order to avoid this frustration, organizations must set up an Initiative Governance structure instead of a committee structure. The difference is governance includes meetings that have a clear agenda aligned with key priorities, a cross-section of leaders that makes decisions, utilization of validated, transparent data, and an equitable approach to holding all parties accountable. It may seem like common sense—but not common practice because sustainable improvement and cultural change requires investment beyond a recurring calendar hold, dashboard, and an individual manager to run it all.

Here are questions we ask our senior executives and physician leaders to consider:

  1. Do we have the right people actively involved? Is our governance inclusive of management, physicians, and clinical staff? For physicians, do we have balanced representation of specialties, employed and independent, long-term and new, protagonist and antagonist? Based on strategic priority, do we have a senior executive sponsor that actively and consistently participates?
  2. Do we have the right structure in place or do we need to refresh it based on the times? Is there an operating structure, charter, and established guiding principles?
  3. When did we last review the guiding principles? Do our principles inform the policies and procedures? Does everyone know and have access to these? Who on the current committee was directly involved in their development?
  4. What data analysis have we done to clearly identify our strengths and improvement opportunities? Are we looking at the right measures, and do we know where we should be? Have we walked the committee through this data—is it understood by all and when it isn’t, do we do more socializing through one-on-one discussions?     
  5. Are we using the right metrics to track progress? Are we using data and the policies to make timely, consensus-driven decisions? Or do one-off anecdotes and silo’d views still create bias?
  6. Are we consistently transparent with the data? Do we break down this information by physician, service line or functional area to drive accountability?     
  7. Do we prompt immediate operational implementation? Do we have sub-committees in place to create focus in key areas and empower bottom-up continuous improvement?   
  8. Do we position formal and informal change leaders? Do we equip them with data and change management tools to know when and how to lead productive peer-to-peer conversations?
  9. What is our communication plan for goals, actions, and progress—for our committee, the broader service line or organization, physicians and staff, and related executive committees?  

Lastly, when we invest in this type of governance and it works as intended…

  1. Is senior leadership ready and aligned to address opportunities and barriers that are raised? Are they willing to empower this governance structure to make decisions?

GernotV.jpgMs. Gernot is a vice president with GE Healthcare Camden Group and works with health system executives to improve operational and financial performance through focusing on care delivery efficiency, strategic capacity planning, enterprise strategy activation, and change management. She is responsible for helping clients design enterprise performance initiatives and leading GE engagement teams to deliver. She may be reached at vesna.gernot@ge.com.

 

 

KoradiaN.jpgMs. Koradia is a manager with GE Healthcare Camden Group. She has been leading healthcare organizations through transformation initiatives for over nine years. Ms. Koradia has worked with many large academic centers and community hospitals to transform their operating rooms, decrease readmission rates, increase early morning discharges, and reduce ER wait times by utilizing simulation modeling. She may be reached at nehal.koradia@ge.com.

 

 

Topics: Payment Models, Vesna Gernot, Surgical Services, Initiative Governance, Nehal Koradia

Best of 2015: Top 10 Considerations When Transitioning Physicians to Payment-for-Value

Posted by Matthew Smith on Dec 28, 2015 10:51:59 AM

Tawnya  Bosko, DHA, MS, MHA, MSHL, Vice President, GE Healthcare Camden Group

change-ahead-sign.pngLeading into the new year, GE Healthcare Camden Group will be re-publishing the most shared and popular blog posts of 2015.

With increased focus on payment based on value, physician practices and those involved with physician practices need to plan for how to transition to new reimbursement models. Here are the top considerations to keep in mind when implementing value-based structures:

1. How do you define value? 

For all the talk of compensating physicians based on value as opposed to volume, there is no consistent methodology for measuring “value.” Often, payers define value in different ways, making it difficult for physician practices to understand what is required of them in order to meet criteria. Leadership should define what value means to the practice with insight from key payers. Typically, initial steps in measuring value are based on compliance with designated measures from the Healthcare Effectiveness Data and Information Set, but depending on the program, different criteria may be used. Further, the practice may include measures that it has identified as needing improvement, such as patient access, completing notes, meeting meaningful use, or responding to lab results in a timely manner.

2. How do you report on value?

Once the practice has determined the clinical measures or other criteria that will define value, it must proactively assess information system readiness for reporting on these measures. Historically, many payers have tracked these values based on claims data. Practices must be able to monitor, track, and report on performance related to value metrics. Assess the system, and ensure that necessary data can be extracted efficiently and accurately for reporting. Build custom fields within the electronic health record (“EHR”), or consider an add-on reporting tool if needed.

3. How do you document value?

Just as important as determining how to generate reports to measure the value metrics, practices must determine how physicians and other providers should document their work within the EHR in order to ensure their results are captured. Often, EHRs have several ways and areas in which documentation of a certain procedure or services can be documented. Best practice is determining the field or area to document each measure so that it is clearly communicated to physicians and easily reported on, retrospectively.

4. Incentive program - carrot or stick?

Once the metrics to measure value have been determined, what is the incentive (carrot) or penalty (stick) for meeting or failing to meet value as defined by the group? There must be enough incentive to gain buy-in so that physicians do not feel as though extra work is being added without additional benefit. And, there must be enough penalty at stake for the program to be taken seriously. It is about finding the right balance. Is it a withhold on revenues with the opportunity to earn X times the withhold in return if measures are met? Is there a “direct” line of sight between the incentive earned by physicians and the impact on their compensation? There are many models that could be implemented to meet the practice’s needs.

5. Educate, educate, educate

This point cannot be emphasized enough. Often, healthcare leaders think the difficulty is in defining value, measuring value, and designing the incentive program. While those can be complex, educating the physicians on the measures, model, and how to document them is a very important step and could make or break your program. Remember that these situations often involve changing the way a physician has practiced and/or documented and that it takes time, education, and re-education. Ensure the appropriate processes and tools are in place to communicate and educate effectively.

6. Living in a grey world/burden of value

Understand that during this transition to payment-for-value, physicians are living in a grey zone. They are expected to take extra steps to meet value criteria, but the majority of reimbursement may still be based on a fee-for-service or volume-based methodology. Essentially, they are asked to spend extra time with patients and on documentation in order to meet quality measures but also to continue to meet their productivity targets in order to sustain the viability of the practice. Typically, the burden of many of the value-based measures falls hardest on primary care physicians. Be aware of this when designing incentive models. Do not do too much at once and overwhelm physicians to the point where they give up.

7. Transparency of data

Physicians, rightfully so, are often skeptical of performance-related data. They have questions...make sure tyou have answers. Be transparent with data. If a physician asks for the names of patients where they failed on a certain measure, ensure the information is provided. It is important to not only be transparent with data but to build confidence in results.

8. Timeliness of results

Be timely with reporting. Provide information to physicians in a timely and regular manner so that they are able to improve any deficiencies in the measurement period. Do not wait until the point where it is too late to correct issues for the current performance year. It is in the practice’s interest to improve each physician’s performance. Use the data and reporting to provide feedback and to help them be successful in the program.

9. Impact on total compensation

Understand the impact that the design of the incentive program has on total compensation. What percentage of total compensation does the incentive (or withhold) represent? Does the physician employment agreement need to be revised to incorporate the incentive model? If physicians are on salary guarantees, how is that addressed so that the incentive/penalty falls on them and not the employer?

10. Engage payer partners

Work with payer partners and do it early. Discuss their needs when measuring value and pursue discussions on how they can support the transition. Make it a collective effort where initiatives are streamlined and convergent. It is not practical for practices to have multiple different models for multiple different payers; be open with major payers, and develop a program that is supported uniformly.


bosko_headshot.pngDr. Bosko is vice president at GE Healthcare Camden Group and has over 20 years of experience in healthcare management and strategy. Her areas of focus and expertise include healthcare reform, market forces, and strategic analysis, specifically around hospital-physician alignment, emerging reimbursement and incentive models, performance optimization, payer strategy, and the intersection of health policy and delivery system transformation. 

Dr. Bosko is a nationally-recognized speaker on healthcare market trends and insights, focusing on the financing and delivery of care. She frequently presents at industry conferences and is the author of multiple articles for leading industry journals and publications on the transition to value-based reimbursement and health system strategy. She may be reached at tbosko@thecamdengroup.com or 310-320-3990.

 

Topics: Value-Based Care, Physician Compensation, Payment Models, Tawnya Bosko, Volume-Based Reimbursement

Bundled Payments and the Breakthrough Power of Partnerships

Posted by Matthew Smith on Jul 30, 2015 1:00:19 PM

By Kimberly Hartsfield, MPA, Vice President, The Camden Group

Bundled Payments, PartnershipsAs bundled payment programs are expanding across specialties, payers, and sites of care, it is becoming increasingly clear that the path to success can be summarized in one word: partnerships.

Who is your Apple?

Consider the successful partnership between Nike and Apple. Although they are in different industries, their commonality lies in their customers. As a result of their partnership, both companies have experienced enhanced brand recognition, in addition to significant market and sales growth. Nike CEO, Mark Parker said about their partnership with Apple, “As I look ahead at what's possible with Nike and Apple...technologically we can do things together that we couldn't do independently. So yeah, that's part of our plan, is to expand the whole digital frontier and go from...25 million Nike+ users to hundreds of millions (theverge.com).”[1] Who is that perfect partner that you had not previously considered, and what can you accomplish together?

Why it Matters

How do these strategic partnership examples apply to healthcare? The same patient that has an inpatient stay and is discharged to a post acute care facility has one goal: to get home pain-free as fast as they can. Bundled payment arrangements are holding both providers accountable very differently than the traditional fee-for-service model. How can potential partners leverage one another to expand their existing capabilities and utilize resources in innovative ways? All provider organizations are facing demand destruction pressures, and partnering may help both parties retain much needed volumes and revenues, while continuing to provide excellent patient quality.

New relationships between providers, and between payers and providers, are being forged to advance payment transformation efforts through bundled payments. Providers are looking beyond their four walls, obtaining, analyzing, and sharing data, and partnering across the care continuum to enable patient-centric care delivery with a new focus on value and total cost of care.

Identifying the right partner organizations is paramount to a successful bundled payment program. Providers should consider partnerships with organizations that are innovative, philosophically aligned around value-based care, cost-efficient, and high performing in their markets. Today’s strategic partnership evaluations require a willingness to look beyond the closest geographic provider or the provider organization that has historically been the preferred referral choice. Publically available data from sources such as The Centers for Medicare and Medicaid Services ("CMS") Hospital Compare, Nursing Home Compare, Home Health Compare, Physician Compare, and Dialysis Facility Compare enable providers to proactively evaluate and identify potential candidates for partnership.

The Right Sandbox

Bundled payments are the perfect testing ground for partnerships where gainsharing programs can be established to strengthen provider engagement and evaluate potential for long-term strategic alignment. This allows participants to demonstrate their ability to eliminate unnecessary variation in care and meet the agreed upon goals of the program without assuming risk that providers may not be prepared to manage. Bundled payment programs and accountable care organization initiatives can be very complementary, and many organizations are choosing to pursue both simultaneously.

The ability to expand the external focus and consider the full continuum of care requires very different commitment and communication between providers. Partners must develop innovative solutions and continue to make information technology investments to overcome the frequent inability of electronic medical records to transmit data between different platforms and providers. They must also be willing to collaborate clinically through the standardization of care protocols and/or seamless coordination across care settings. Perhaps more importantly, they must be willing to demonstrate mutual accountability for patient outcomes and the total cost of care.


[1] http://www.theverge.com/2014/10/23/7044999/nike-apple-wearables-partnership

Kimberly Hartsfield, Bundled Payment, Payment Reform, The Camden GroupMs. Hartsfield is a vice president with The Camden Group. She specializes in payment transformation strategies with a focus on designing and implementing Medicare and commercial bundled payments. She frequently presents on a variety of topics including value-based payment models and provider engagement. She may be reached at khartsfield@thecamdengroup.com or 501.940.2526. 

 
 

 

Topics: Payment Reform, Bundled Payment, Deirdre Baggot, Kimberly Hartsfield, Payment Models

Top 10 Considerations When Transitioning Physicians to Payment-for-Value

Posted by Matthew Smith on Mar 5, 2015 10:35:00 AM

By Tawnya Bosko, MHA, MSHL, MS, Senior Manager, The Camden Group

change-ahead-signWith increased focus on payment based on value, physician practices and those involved with physician practices need to plan for how to transition to new reimbursement models. Here are the top considerations to keep in mind when implementing value-based structures:

1. How do you define value? 

For all the talk of compensating physicians based on value as opposed to volume, there is no consistent methodology for measuring “value.” Often, payers define value in different ways, making it difficult for physician practices to understand what is required of them in order to meet criteria. Leadership should define what value means to the practice with insight from key payers. Typically, initial steps in measuring value are based on compliance with designated measures from the Healthcare Effectiveness Data and Information Set, but depending on the program, different criteria may be used. Further, the practice may include measures that it has identified as needing improvement, such as patient access, completing notes, meeting meaningful use, or responding to lab results in a timely manner.

2. How do you report on value?

Once the practice has determined the clinical measures or other criteria that will define value, it must proactively assess information system readiness for reporting on these measures. Historically, many payers have tracked these values based on claims data. Practices must be able to monitor, track, and report on performance related to value metrics. Assess the system, and ensure that necessary data can be extracted efficiently and accurately for reporting. Build custom fields within the electronic health record (“EHR”), or consider an add-on reporting tool if needed.

3. How do you document value?

Just as important as determining how to generate reports to measure the value metrics, practices must determine how physicians and other providers should document their work within the EHR in order to ensure their results are captured. Often, EHRs have several ways and areas in which documentation of a certain procedure or services can be documented. Best practice is determining the field or area to document each measure so that it is clearly communicated to physicians and easily reported on, retrospectively.

4. Incentive program - carrot or stick?

Once the metrics to measure value have been determined, what is the incentive (carrot) or penalty (stick) for meeting or failing to meet value as defined by the group? There must be enough incentive to gain buy-in so that physicians do not feel as though extra work is being added without additional benefit. And, there must be enough penalty at stake for the program to be taken seriously. It is about finding the right balance. Is it a withhold on revenues with the opportunity to earn X times the withhold in return if measures are met? Is there a “direct” line of sight between the incentive earned by physicians and the impact on their compensation? There are many models that could be implemented to meet the practice’s needs.

5. Educate, educate, educate.

This point cannot be emphasized enough. Often, healthcare leaders think the difficulty is in defining value, measuring value, and designing the incentive program. While those can be complex, educating the physicians on the measures, model, and how to document them is a very important step and could make or break your program. Remember that these situations often involve changing the way a physician has practiced and/or documented and that it takes time, education, and re-education. Ensure the appropriate processes and tools are in place to communicate and educate effectively.

6. Living in a grey world/burden of value.

Understand that during this transition to payment-for-value, physicians are living in a grey zone. They are expected to take extra steps to meet value criteria, but the majority of reimbursement may still be based on a fee-for-service or volume-based methodology. Essentially, they are asked to spend extra time with patients and on documentation in order to meet quality measures but also to continue to meet their productivity targets in order to sustain the viability of the practice. Typically, the burden of many of the value-based measures falls hardest on primary care physicians. Be aware of this when designing incentive models. Do not do too much at once and overwhelm physicians to the point where they give up.

7. Transparency of data.

Physicians, rightfully so, are often skeptical of performance-related data. They have questions...make sure tyou have answers. Be transparent with data. If a physician asks for the names of patients where they failed on a certain measure, ensure the information is provided. It is important to not only be transparent with data but to build confidence in results.

8. Timeliness of results.

Be timely with reporting. Provide information to physicians in a timely and regular manner so that they are able to improve any deficiencies in the measurement period. Do not wait until the point where it is too late to correct issues for the current performance year. It is in the practice’s interest to improve each physician’s performance. Use the data and reporting to provide feedback and to help them be successful in the program.

9. Impact on total compensation.

Understand the impact that the design of the incentive program has on total compensation. What percentage of total compensation does the incentive (or withhold) represent? Does the physician employment agreement need to be revised to incorporate the incentive model? If physicians are on salary guarantees, how is that addressed so that the incentive/penalty falls on them and not the employer?

10. Engage payer partners.

Work with payer partners and do it early. Discuss their needs when measuring value and pursue discussions on how they can support the transition. Make it a collective effort where initiatives are streamlined and convergent. It is not practical for practices to have multiple different models for multiple different payers; be open with major payers, and develop a program that is supported uniformly.

As medical groups and hospitals that own medical groups look for ways to be more efficient and seek stability in a quickly changing marketplace, embracing a transition to value-based reimbursement is necessary. The focus should be on managing the care of a population, and incentive models should be designed with the end goal in mind.

bosko_headshotMs. Bosko is senior manager with The Camden Group and specializes in designing and implementing clinical integration, high growth medical service operations (“MSO”) and finance, physician hospital organization (“PHO”) and MSO development, managed care strategy, and physician alignment. She may be reached at tbosko@thecamdengroup.com or 310-320-3990.

Topics: Payment Reform, Payment Models, Tawnya Bosko, PFV, Payment-for-Value

Top 10 Survival Tips for Physicians Straddling Fee-for-Service and Fee-for-Value

Posted by Matthew Smith on Feb 19, 2015 2:45:00 PM
By Teresa Koenig, M.D., MBA, Senior Vice President and Chief Medical Officer and Tawnya Bosko, MHA, MSHL, MS, Senior Manager, The Camden Group

Volume-to-value, The Camden Group, Tawnya BoskoTransitioning payment systems from volume to value is a recurring theme in healthcare delivery. With this increased focus on payment based on value (“PFV”) as opposed to volume (fee-for-service or “FFS”), physician practices, or those involved with physician practices need to plan for how to transition to new reimbursement models. While challenges exist around every aspect, one reality is physicians have the largest impact in driving changes in cost and quality (i.e., value). The additional reality is that physicians must deliver care in both the fee-for-service and payment based on value worlds – a difficult actuality for those trained and living in a FFS system. Here are the top considerations for physicians that will allow success in both fee-for-service and payment for value systems as they begin to understand and transition to a value-based world.

1. Accurate coding. As electronic medical records become the norm, coding accuracies become more critical for both payment and population health data tracking. Busy practitioners often miscode, mistype, and use incorrect templates. This can result in incorrect documentation and/or insufficient documentation. These inaccuracies can lead to delayed billing and incorrect data for quality driven reimbursement and health plan audits. Educate and assist physicians in accurate and appropriate coding practices. This will be increasingly important with the transition to ICD-10.

2. Patient engagement. A physician’s understanding of the patient engagement process, strategy, and how it affects their daily practice is crucial for engaging patients and improving patient satisfaction. Whether the strategy has multiple IT facets (i.e., open access scheduling, patient portals, etc.) or paper-based educational materials and other tools, it is necessary for the physician to understand the goals and their role in the strategy. Engaging patients in their care will result in clinical and financial success in either payment model.

3. Care management. Faced with a plethora of programs, physicians may not be aware of how the numerous care management, disease management, or transitional programs impact their patients or the care they deliver. Programs need to include physician leadership and buy-in for success. Make the programs easy to access and support physicians – again these programs can drive clinical and financial success in both payment worlds.

4. New care delivery models. Patient-centered medical homes, chronic care service lines, accountable care organizations…each of these “new” delivery models has, at its core, the same goal: improving the overall value of healthcare and improving patient health. Identifying high risk patients and providing appropriate and early interventions to keep the patients healthier is integral to success and promotes improved quality, whether in a value-based or volume-based system. Engaging in more effective care coordination not only supports more effective referral networks but assures satisfied patients.

5. Price transparency. As patients become more engaged in their healthcare and responsible for larger shares of the financial responsibility of their healthcare, they want and need to know what their portion of the cost for services will be. This is good in a value-based system because it allows patients to make educated decisions regarding their healthcare. This is also effective in a volume-based system because if a provider is able to provide accurate cost estimates to patients, it then also enables them to collect the patient payment responsibility at the time of service. Increasing cash collections and decreasing resources needed to collect on the back end improves the revenue cycle while decreasing operational expense. Providers should use tools to manage insurance eligibility and estimate patient responsibility at the time of service to become more transparent.

6. Clinical transparency. Physicians are unaccustomed to having their notes in the patient medical record shared with patients. Ultimately, the medical record is the patient’s information, and they have a right to access it. Patient portals and other tools have eased the burden of access. Physicians should embrace this process, while following policies for disclosure. Providing patients with access to their information will ultimately help engage them in their healthcare and lead to improved outcomes. Providing patients with access to their information also has been shown to reduce medical malpractice risk, which is beneficial under either structure.

7. Preventive medicine. Embrace preventive medicine services. Healthcare reform has promoted access and coverage to preventive medicine services such as physical exams, health risk assessments, annual wellness exams, and other visits that focus on the overall well-being and health status of the individual. Again, this is necessary to improve healthcare outcomes and value but also generates additional appropriate visits in the volume-based world.

8. Timely completion of records. Whether for paper-based medical records or the electronic medical record, physicians should strive on getting their notes done in a timely manner. Completing notes as soon as possible after the patient visit is a good practice for many reasons:

  • The physician has a sharper memory of the visit and can more accurately convey information to the record;
  • It allows the practice to bill more timely for services, thereby increasing cash flow;
  • It allows crucial medical information to be accessed, if necessary, by other members of the healthcare team;
  • It enables information that recaps the information from their visit to be given to the patient at the time of service or shortly thereafter, thus allowing immediate engagement.

Timely completion of records not only improves overall value, but it is also best practice in a volume driven system.

9. Flexible access and appointments. Many people have very busy schedules and limited flexibility for routine healthcare visits. Providing non-traditional appointment hours (early mornings, evenings, and weekends) promotes patient compliance with follow-up visits and is less disruptive to both the schedules of working adults and a typical school day for children and adolescents. More convenient appointment times generate additional appointment volume for providers and improve patient satisfaction. Additionally, flexible access such as an after-hours answering service that is also able to triage calls and schedule appointments not only improves the quality of service provided to the patient but also helps fill providers’ schedules.

10. Patient satisfaction measurement and ratings. Measurement of patient satisfaction continues to be tied to reimbursement. Embracing patient satisfaction measurement in a practice is a positive, proactive step to take in transitioning to payment for value. Using a reputable survey tool to query the practice, results can then be compared across practices and regions. Pay attention to online ratings of physicians in the practice. While patient satisfaction and online ratings are becoming a large component of value-based care, they also have an impact on volume as patients begin to use online ratings to select their physician.

Teresa KoenigDr. Koenig is a senior vice president and chief medical officer with The Camden Group who specializes in developing and designing clinical integration strategies, medical management programs, and value-based care delivery and payment models. She has worked with a variety of healthcare organizations, from individual physician groups and health systems to academic health systems and Fortune 50 companies. She may be reached at tkoenig@thecamdengroup.com or 310-320-3990.

 

 

Tawnya Bosko, The Camden Group, Ms. Bosko is senior manager with The Camden Group and specializes in designing and implementing clinical integration, high growth medical service operations (“MSO”) and finance, physician hospital organization (“PHO”) and MSO development, managed care strategy, and physician alignment. She may be reached at tbosko@thecamdengroup.com or 310-320-3990.

 

Topics: Payment Models, Tawnya Bosko, PFV, Payment-for-Value, Teresa Koenig MD

The Payment Reform Mash-Up: Top 10 Smart Leadership Strategies for Managing in an Era of “Fusion” Reimbursement Models

Posted by Matthew Smith on Feb 3, 2015 10:16:00 AM
By Deirdre Baggot, MBA, Ph.D., Senior Vice President, The Camden Group and Kimberly Hartsfield, MPA, Vice President, The Camden Group

Bundled Payment, Payment Reform, Clinical IntegrationFew would argue that this may be one of the most exciting times in healthcare – volatile and disruptive, yet also transformative and empowering for those organizations and innovative leaders who are able to move markets by embracing “fusion” reimbursement models. While not all leaders have relished these challenges, many of their more adaptable and failure tolerant counterparts are at the forefront of payment transformation and reconceiving their payer strategy today. Now is the time to for true transformation, and those innovators who meet the changes head-on are far more likely to succeed than their overly cautious counterparts, who may well find themselves left behind. Here are the top ten strategies of transformational leaders who are taking the healthcare “bull by the horns” and redesigning their business model to seize the inherent opportunity of payment transformation.

1.  Have great timing

In an era of payment transformation, building value is not enough. Moving from building value to extracting and trading value requires appropriate timing. The inherent threat of demand destruction that both bundled payments and ACOs drive require many providers to reconceive their business model. The key is to time new payer arrangements with the redesign of the care models. The transformation is already well underway, and the clock is ticking for those who have not embraced this as their future.

2.  Risk is your friend

Risk is described as the gap between opportunity and success. Without it, the greatest opportunities an organization holds will not have the possibility to develop. Organizations are charting new territory, and creating success in the future is contingent upon leadership’s willingness to “run to risk.” Keeping an open mind and viewing the future from a broad perspective will allow an organization to identify opportunities for risk that make sense. Risk tolerance goes hand in hand with failure tolerance (see number 7).

3.  Think like Google

In industry transformation, talent becomes the linchpin asset. Identifying all-stars and empowering them in a way never done before may mean beginning to build teams that look more like a group of Google interns. Ask them what unproductive activities are they wasting their time on each day? Who are the creative thinkers within the organization, and how much time are they spending envisioning the future? An organization must continually innovate to stay ahead of competitors, while recognizing both its market and the healthcare industry are in a rapid state of flux. A wait and see approach will not cut it. The experience people (both customers/patients as well as internal audiences) have within a system must be described as prompt/quick, high value, high quality, responsive, and personalized. These core principles must permeate everyday culture.

4.  Execution matters...a lot

The ability to execute is not inherent among all leaders. When it comes to payment transformation and complex change, it is often assumed that that a critical change can be “assigned” – and that is flawed thinking. Masterful execution requires process, project, and conflict management, as well as sharp communication skills, and most importantly, the ability to influence others. Time and again, seemingly good ideas are lost on poor execution. Payment reform becomes the impetus for care delivery reform which is a heavy lift. Simplifying the plan and managing the execution process will keep you on path to smart execution and foster the commitment to change.

5.  The imperative to adopt new payment models

Bundled payments are a natural introduction to value-based care delivery as the entry point is low, the investment is lower than ACOs by comparison, and the yield can be high. Certain other shared savings models with payers as your partner can also yield results in a relative “safe” environment. Bundled payment programs are moving out of the pilot stage and are becoming an integral part of healthcare finance in many markets. Many of the pilot initiatives focused on inpatient hospital stays and physicians performing procedures in high cost, high volume specialties like orthopedics and cardiology. Bundles are expanding across the care continuum into both the outpatient and post-acute arenas. Also, we are seeing many new joint venture arrangements with payers to facilitate population health management experience in commercial, Medicare, and Medicaid markets. The point is, successful leaders are pursuing new payment models rather than shying away.

6.  The next “dream deal" (Hint: It’s not a volume play)

No healthcare provider or setting is an island. The kind of thinking that connects cross-setting care delivery will change the world of healthcare in the United States. The next dream deal can be summarized in one word: Partnership. Successfully managing risk under the evolving reimbursement structures requires organizations to look beyond their four walls for partners to complete the care continuum, provide new capabilities, and live up to the goal of delivering patient-centered care. Partnership evaluation efforts across multiple healthcare stakeholders must be fact-based through a comprehensive market assessment. In a perfect world, who do you see as your long-term partners? What partnerships have you not considered that you should? Are you philosophically aligned with this potential partner? Are their practitioners and executive staff well aligned with yours? How do they perform on cost, quality, and customer satisfaction metrics, as well as key metrics like readmission rates, compared to their peers? Asking the key questions early will prevent the dream deal from becoming a nightmare.

7.  Failure tolerance as a leadership best practice

Managing “fusion” reimbursement models requires an understanding that innovation is the hardest work to do, and failure is not failure at all--rather, it is just a data point on the journey to transformation. Failure cannot be personalized, and future leaders understand the need to “roll with it” and move quickly through tests of change. Tomorrow’s healthcare leaders are “disruptive innovators” who do not subscribe to a “culture of nice,” are not afraid to fail, and are not constrained by the political implications of killing a bad project. These leaders view failure as merely new information and are already on to the next innovation. In order to effectively compete in a time of industry transformation, the really great leaders, those capable of transforming organizations, will demonstrate a high degree of failure tolerance.

8.  The courage imperative

The healthcare leaders who will survive understand that courage and bravery shape the kind of thinking needed to spur payment transformation. Transforming the way care is delivered is not an overnight exercise and requires extraordinary courage. This includes saying “no” to unsustainable cost structures, but not through slash-and-burn tactics, which are largely short-term fixes. Success with bundled payments or any risk-based reimbursement model requires the courage to speak truth to waste and duplication and resulting behaviors of fee-for-service.

9.  Proximity

Assumptions underlying collaboration and innovation are changing. The collaboration and innovation necessary to thrive during the payment reform mash-up do not happen over conference calls or in cubicles. Chance cafeteria encounters and hallway conversations are strategic opportunities to break down silos and achieve break-through care transformation. There is a natural rhythm to collaboration that is rooted in trust and transparency. Smart leaders are asking themselves how to best foster, enable, and invest in proximity. Face-to-face connections, often occurring on the front-lines, are communication tools, and innovation sessions must be promoted.

Cross-discipline, cross-setting collaboration is the vehicle that enables innovation. Tomorrow’s successful leaders demonstrate a unique ability to collaborate, even when it means partnering with their “frenemies.” It is not personal, nor is it about burying the competition. It is about promoting and achieving health in the community. That said, collaboration done poorly can lead to endless meetings and costly delays. Being open, intuitive, and deliberate about how and when to collaborate has never been more critical for healthcare executives.

10.  Payment reform best practices are still evolving

“First Generation” transformation is not the end game; however this does not give an organization a “pass” to do nothing. The devil is in the details. Methodologies are being refined and improved. Care patterns are being altered. Transparency in healthcare is increasing exponentially. Payers and providers alike want an industry standard defining the “new normal” that outlines those best practices and makes this transition straightforward with clear timelines. Those organizations that choose to embrace payment reform now have the ability to help lead and shape the future of what those best practices look like.

As we have seen in other industries, such as the rise and fall of the dotcom era, true leaders must accept nothing less than breakthrough innovation and must understand that technology will never replace the importance of high-quality relationships grounded in trust, courage, collaboration, and innovation. Actively, energetically, yet thoughtfully pursuing new payment models, such as bundled payments, offers current leaders a wonderful sandbox to implement innovative strategies today that will enable them to thrive tomorrow.

Bundled Payments, Payment Reform, Deirdre Baggot, The Camden Group




Ms. Baggot
is a senior vice president at The Camden Group. baggot_headshotShe is a nationally recognized thought leader in bundled payments and was selected by CMS and the Innovation Center to serve as an expert panelist in Models 2 and 3 application reviews for the Bundled Payments for Care Improvement initiative. She may be reached at dbaggot@thecamdengroup.com or 303.335.7047.

hartsfield_headshotMs. Hartsfield
is a vice president with The Camden Group. She specializes in payment transformation strategies with a focus on designing and implementing Medicare and commercial bundled payments. She frequently presents on a variety of topics including value-based payment models and provider engagement. She may be reached at khartsfield@thecamdengroup.com or 501.940.2526. 
 
 

Topics: Payment Reform, Bundled Payment, Deirdre Baggot, Kimberly Hartsfield, Payment Models

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