More on Reimbursement

Overcoming barriers to value-based care adoption requires wise use of technology

Using the power of data to tweak processes and squeeze the maximum amount of reimbursement possible is a must in today's environment.

Jeff Lagasse, Associate Editor

Fee-for-service reimbursement structures are slowly giving way to a new model. Taking the place of this framework is value-based care, in which reimbursement is directly tied to clinical outcomes. This shift is one of the biggest trends taking place in healthcare, yet there remain certain barriers to adoption -- workflow challenges and interoperability among them, which can leave providers scrambling.

Efficiency is the goal of many healthcare organizations as they grapple with the transition to value, and enact potentially revenue-generating population health initiatives. The way the healthcare business is run today, it's virtually impossible to do this without some kind of sound technological strategy in place.

Achieving workflow efficiency is key to success in a value-based environment, but according to Michael Cousins, chief analytics officer at Lumeris, there are fundamental items that need to be addressed first.

"Non-tech foundational elements need to be in place to help the workflow," he said. "Really key is the governance, where the providers or provider groups -- whether community or employed -- understand that macro-level management reports are where the opportunities are regarding overuse of the emergency department, for example. Those foundational elements need to be addressed before there's benefit from something in the workflow."

Navigating value-based contracts is one area ripe for a technological assist. Many health systems have value-based care contracts with commercial payers, or perhaps have a Medicare Advantage component as part of their structure, which can achieve lower medical costs.

The general framework of a payer contract is that the payer promises to pass along savings to the health system if it can meet certain quality metrics, whether it's improving medication adherence to meet a certain threshold, or reduced medical costs for a targeted population -- Aetna clients, for instance. The contracts stipulate that health systems can collect those funds of the quality benchmarks are met.

What makes things challenging is that every single one of those contracts is different. Each has different quality measures and different ways in which cost savings are calculated. Analyzing those contracts is where a coherent technological framework becomes beneficial.

"(You) can create an actuarial-based contract analysis to analyze the Cigna contract, the Aetna contract," said Cousins. "And those will tell you which quality measures you should be focusing on. It gives what's called a 'roadmap' --  a data-driven operating plan. That gets spit out of the actuarial tool and then it tells us, 'What should we focus on with the providers at that health system with that workflow?'You can proactively schedule patients to come into the office to let medications reconciled, or to get that A1C test they haven't got yet."

By doing this contract analysis, a health system can figure out what they will and won't get paid for. By knowing that in advance, systems can incentivize physicians; they know they can make more money if they're proactive with patients at the highest risk of an emergency department visit, for example, and are more likely to take action than if they didn't have that incentive.


Performance measurement is still nascent in the healthcare industry, but other industries have developed practices that health systems and providers could mimic.

AB testing is one such example, and was implemented by Capital One in the late 1990s and early 2000s. The credit card company would send out two different mailings -- an "A" and a "B" -- to a select population. Bob would get the "A" mailing, and his neighbor Sally would get the "B" mailing. Capital One would then determine, based on the responses to their mailings, which one was more effective, and they would do thousands of these tests per year.

That kind of scientific accuracy has yet to be achieved in a broad sense in healthcare, particularly as it pertains to population health performance, which is a key component of value-based care. Instead, hospitals and health systems have been relying on their judgement.

"Health systems will be making phone calls to patients to encourage them to take their medications, or to share what might be some medical problem they have, and doing so via telephone," said Cousins. "It makes sense to you and me and clinicians as well, but here's where scientific rigor can help the health systems. What we learn when we do AB testing is that those phone calls are only effective for a small group of people -- 20 to 30%."

The rest of the phone calls, he said, are either a waste of the health system's time and money or an annoyance to the patient. But providers are still making tens of thousands of these phone calls.

"It's way past time we move from doing evaluations retrospectively … and move to proactive tests similar to what financial services companies did two decades ago, and what the retail industry does to us every single day with advertisements," said Cousins. "This is much needed."

Where technology comes into play is that it can create an infrastructure of AB testing to determine what's effective and what's not -- using randomizing, for instance, to figure out which patients require a nurse, and which require a less-expensive social worker to achieve the outcome of lowering ER visits.

Other facets of value-based care models, such as care coordination, can still be speedbumps on the road to full adoption. For these challenges, providers need a full portfolio of approaches. Some will rely on interoperability, or the ability of disparate electronic health records systems to speak to one another; some will use health information exchanges to facilitate care coordination.

The common thread, though, is that the healthcare industry needs to become adept at using new technologies to stay competitive and relevant.

"More and more health systems are engaging with payers in value-based care contracts, and those health systems have realized it's a big challenge to hit those quality targets and coordinate all of those different types of services, and execute on those services," Cousins said.

Twitter: @JELagasse

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