The shift to value-based care: Technology will be key
July 13th, 2016
The healthcare industry is always changing, but there’s been a lot of attention on one major impending evolution in particular – the move from volume (or fee-for-service) to value-based (outcome) payment models. This new wave of the future is something that all healthcare organizations – from major hospital systems to private independent practices – must look forward to and be prepared for.
So, what does it mean to move from a volume-based to a value-based model? In a nutshell, until now the healthcare industry has followed a ‘do more’ model where providers are paid for each service they provide. Meaning every diagnostic test, procedure or patient visit translates to more money.
The evolution to value-based models means an introduction of bundled payments and value-based care, where based on the value of care (outcome), there is a percentage of savings that may be allocated for those who do a good job. As the healthcare industry moves toward this model, the fee-for-service might disappear entirely. Being a true outcomes-driven model, the bundled payment model will require the payer to look ahead and pay providers a single, pre-determined price for an entire encounter at the time of service delivery. This payment covers all of the related services for a procedure or condition across care settings, including follow-up.
According to a recent HealthData Management article, “healthcare organizations must re-evaluate how they manage their revenue cycles and if they don’t, significant lost revenue is sure to follow” as we move toward the value-based bundled payment model. It claims that while many organizations have revenue cycle management systems in place today, few have evolved their systems to be able to tightly measure and manage cost, care and outcomes across the entire episode of care, ranging from physician visit to surgery to post-surgical care.
So how do healthcare organizations maintain a healthy revenue cycle during this impending shift to value-base care? Technology will be a key factor. No longer will it be a “nice to have,” but a necessity to survive. Technology that provides visibility across the entire healthcare spectrum must be in place, including what happens to a patient after they get treated and leave the healthcare facility.
In particular, widespread EHR adoption is essential. According to the article, at the most basic level, all organizations will need an EHR system to house their clinical information. Without this baseline technology as a starting point, moving to the new value-based payment model will be difficult at best. To be successful with value-based care requires the ability to gather and analyze information about patients, partners and payers. An EHR will serve as the underlying system for everything moving forward. Without this information, it will be impossible to make informed business and clinical decisions.
With the base technology in place, revenue cycle management analytics technology should be the next focus. This technology will provide the much needed insight into key performance indicators, such as cash on hand, dates outstanding, cost accounting, supplies, resource usage and much more.
Technology needed to engage patients will also play a crucial role moving forward. Organizations must have the ability to engage in communication with patients through sophisticated patient engagement technology, telemedicine and patient portals. Communicating that a healthcare organization has high-quality service with very low readmissions is particularly important for value-based care.
The move to value-based care and alternative payment models will not happen overnight, the article recommends for organizations to start small and begin by looking internally to make sure their own technology offers the capabilities necessary to maximize their position in the community (i.e. doctors, hospitals and patients). Once the basics are in place, then they can then evolve to more advanced technologies such as population health, telemedicine, patient engagement technology, sophisticated referral systems – and even social media.
It will be a gradual shift but regardless of the final components of the value-based care payment model, one thing is certain: It will be data driven. Having the proper technology in place is a key component to an organization’s successful transition to value-based care.