Transition to Value Based Models

Challenges with Transition to Value Based Models

Our organization is moving towards more population health focused/value-based reimbursement models, and have been doing so by dipping our toes in the water with a variety of initiatives. Some of our current initiatives include CMS bundled payment, DSRIP, total cost of care model which pools lives with a number of area healthcare providers, CPC+, PCMH.

Some challenges include:

  1. Initiatives like DSRIP move towards the reduction of ED visits and unnecessary hospital admissions. While there are opportunities to earn incentive dollars based upon ED visit/admission reductions, the incentive dollars don’t offset lost revenue/margin, and therefore runs counter to hospital financial goals and targets. Achieving alignment/buy-in with operations becomes challenging. How have others navigated this?
  2. In participating in value based arrangements with government payors, we can assume transparency with cost of care information through claims data. However, as we move towards similar arrangements with private payors, transparency is more challenging- payors won’t/can’t provide similar information as patients’ continuum of services are often outside of our facilities, often with competing organizations, creating disclosure challenges. How do we negotiate fair arrangements with commercial payors without access to comprehensive historical data, and how do we, other than through blind leap of faith, track the progress of our initiatives without ample data?
  3. In our bundled payment program in particular, we have implemented changes in care pathways that align patients with a preferred post-acute provider network.  These providers have demonstrated themselves to be lower cost, higher quality providers (lower readmission rates, lower length of stay, etc.).  While we may have our physicians and care management team aligned with post-discharge plans to include preferred providers, the pathway is often derailed with the last inpatient touch point- discharge planning.  The intent throughout the inpatient stay may be for the patient to go to a preferred provider upon discharge, but discharge planning ultimately sends the patient to a non-preferred provider.  While discharge planning often points to patient choice as a driver to care pathway diversions, it is more likely that they are clinging to historical referral patterns- ease of access, relationships with non-preferred provider staff, etc..  CMS has approved the use of a preferred network, so there are no compliance concerns relative to patient choice.  In a union environment, how have others solidified post-acute care  pathways that, while maintaining patient choice, direct patients towards preferred providers?


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Participant comments on Transition to Value Based Models

  1. This is an excellent post and a dilemma that we all go through. I believe moving towards value based incentives is the way to go and making it part of the salary is usually the approach taken. Now, you have to begin with a small % and move up slowly to give a chance to people to adapt. The discharge planning piece has to be own by the plan or hospital and the Utilization Management team. We have a score cards from CMS of the facilities that scores are higher and the patients pick them. We have aligned those facilities with our own incentives like reduction readmit, so we all have the same goals.
    We have seen a decrease in ED utilization.

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