A Hard Look At Value-Based Care

For many, the march to value-based care began years ago.

Now with enough data “under the belt,” it is time to take a hard look at your progress and assess if these initiatives (e.g., bundled payments, clinical integration, shared savings models, etc.) have measured up to the targeted goals. Have you really been able to reduce your costs? Are you meeting your quality metrics? Essentially, has the organization lived up to expectations? We do see some overarching issues that many are facing:

1. Reducing inappropriate care. This is really difficult to achieve and requires clinicians to change how they practice medicine by unlearning the old ways and embracing new models with new tools. A common setback is that many do not use utilization or spend metrics to provide information and guidance to physicians regarding their performance; this is critical. We have also seen the use of unimportant or even too many metrics that become a distraction to an organization’s ability to focus on meaningful change. 

2. Using metrics and holding people accountable. Many moved the “nice guy” into leadership positions or population health without proper leadership skills or training.  A frequent challenge we see is that these leaders either lack the skills to bring others along or are not being held accountable for their own performance, both of which result in poor execution. You must start with established clinical benchmarks and the spend profile of the organization to set effective and useful metrics requiring the collaboration of those directly involved and those accountable for performance.  If those individuals who are accountable cannot perform, then you must take measures to find new resources to accomplish the established goals. Likewise, participants in the program need to be given feedback and tools to assist them in turning around performance that may be less than desired.

3. Changing payment models.Payers may be slow to change payment models, and yet organizations have started or are in the middle of having changed care models. Payer contracts may still be based on discounted charges and per diems, yet length-of-stay is down, and resources per case have been reduced due to concerted efforts to drive value. An assessment of payment models and incentives are needed as care models change.

4. Lack of physician alignment. We have seen various challenges related to physician alignment. Some failed to recognize the importance of the economics to the physician and their desire for independence. Others did not achieve physician engagement and buy-in to the process, model, metrics, goals, and vision. Starting over with a vision and goals that physicians have helped create and embrace is a necessary step for success.

5. Underperforming business units. Some health systems acquired businesses that are missing projections. Why? Was it bad business? Poor management? Did you change the business model? Post-merger or acquisition, it is important to perform an objective and disciplined analysis – one based on a strong quantitative assessment. Consider perhaps a quick valuation of the business to bring focus to the equity loss and the key drivers to improve performance of the business. Both a quantitative approach along with qualitative information must be assembled to provide an objective assessment of the situation. Whether you are a freestanding hospital, a regional health system, or an academic medical center, a hard look at your strategic plan, capital requirements, and credit worthiness will help you assess your future.

In short, taking a hard, objective look at performance to uncover why the organization is underperforming is the first step in moving back to the path to success. 

Steven T. Valentine is the president of The Camden Group, an El Segundo-based consulting firm.