How do we communicate our value proposition? In particular, how do we communicate our quality performance to a variety of stakeholders—especially employers, health plans, and our community?


I attended a joint HFMA and American College of Physician Executives conference recently where James Landman, JD, PhD, director of thought leadership initiatives for HFMA, presented an excellent summary of the latest findings from the HFMA Value Project. One of the things that I learned was that many organizations are challenged to communicate their value proposition.

The HFMA report that Landman referenced, The Value Journey, states:

Organizations interviewed for this report indicated that refining, clarifying, and communicating their organizations’ value proposition is a significant challenge. For example, in light of future financial challenges facing Franklin Memorial Hospital in Farmington, Maine, leaders of this rural hospital have critically examined how to best position the hospital: as a primary care operation that refers out for specialty care, or as a facility that offers select specialty services. Academic medical centers are considering what balance to strike among the research, academic, and care delivery components of their organization, and more specifically, the role of primary care in their future.

At Billings Clinic, an aligned integrated system based in Billings, Mont., one of the primary challenges is the need for better data to demonstrate to purchasers how the health system’s integrated model improves outcomes and reduces inpatient utilization and the total cost of care.

So how do we communicate our value proposition to our stakeholders? For purposes of this discussion, let’s focus on clinical performance: patient outcomes, including complications, mortality and readmission rates, and length of stay.

I recently visited with a large consulting firm that was helping a large health system confront this challenge. The firm worked with the health system to define and communicate its value proposition. The consultant’s initial approach to sharing quality performance was to highlight the hospital’s mortality and readmission rates, available via Hospital Compare, for three conditions—acute myocardial infarction, congestive heart failure, and pneumonia—and then to compare the hospitals’ performance with those listed in the Truven Top 100 hospital list. This was a good start, but in the average-sized hospital, these three conditions can represent less than 5 percent of total annual admissions. So the information fell short of telling a complete story of the health system’s value proposition.

Strategies for Telling the Value Story

As we brainstormed other approaches, we came up with several alternatives that we hope will provide a more complete picture of overall clinical performance. 

Idea No. 1: Measure and report superior outcomes for the majority of patients. This approach was used in the late 1990s in a highly competitive managed care market. At the time, we needed to not only say we delivered better outcomes, but also prove it with cold, hard facts. To do this, the organization developed clinical dashboards for the top 15 high-volume DRGs. The dashboards reported on the most important clinical outcomes and included industry benchmarks for comparison.   

In addition to showcasing the outcomes, several points were integrated into presentations to stakeholder groups. First, by focusing on the most common, high-volume conditions and surgical procedures, the top 15 DRGs covered more than half of the hospital’s inpatient population. Few, if any, competitors could claim they were improving quality for the majority of patients in their care. 

Second, the dashboards provided actionable data that were used to decrease complications that were adding significantly to the cost of care. Demonstrating the decreased complication rates spoke directly to both parts of the value proposition: quality and cost. That was a home run for the hospital. 

And finally, competitors were challenged to provide similar information. Because they hadn’t invested in business intelligence, they couldn’t answer the challenge. To further establish a competitive advantage, the hospital hired the actor Donald Sutherland to record radio spots that highlighted several of the organization’s women’s services projects and the outcomes that the patients experienced. These radio spots spoke directly to the medical decision makers in every household in the organization’s primary market area. As a result, we moved 50,000 lives to our system—a significant shift in market share.

Idea No. 2: Use quality measures from independent third parties. The second approach relies on information provided by independent rating groups, including Truven Health Analytics, Healthgrades, and Hospital Compare. Organizations that have performed well in these ratings can leverage their results to demonstrate the value proposition to their constituents.

For instance, Truven Health Analytics analyzes MedPAR data to determine hospital performance in a number of domains: in-hospital mortality, complications, patient safety, 30-day mortality rates, 30-day readmission rates, average length of stay, HCAHPS score, inpatient expense per discharge, and operating profit margin. The data are adjusted for severity and risk as appropriate. Taken together, Truven’s approach provides a balanced assessment of hospital performance on the most important clinical, financial, and experience outcomes. For hospitals that receive the Top 100 Hospitals designation, it’s safe to say that they are delivering some of the best quality in the country, and this can certainly be highlighted in discussions related to an organization’s value proposition. The same can be said for those organizations in the Top 15 Health Systems category.

Healthgrades takes a different approach, but one that is equally compelling. Healthgrades evaluates hospitals on mortality or complication rates for 27 of the most common medical conditions and surgical procedures. Mortality is divided into three time periods: in-hospital mortality, mortality within 30 days, and mortality within 180 days. Healthgrades provides star ratings for each:

  • One star if performance is worse than expected
  • Three stars if performance is as expected
  • Five stars if performance is better than expected

Five stars generally place an organization in the top 10 to 15 percent of hospitals in the country. Healthgrades also has a variety of quality awards that are announced each year. These awards and the five-star ratings establish a hospital’s ranking compared with other hospitals in the country and can also be used in discussions of healthcare value related to clinical quality.

The ability to prove the level of quality delivered by a healthcare organization is definitely challenging, especially at a time when quality measures continue to be vetted at the national level and debate rages around what and how many things to measure and report. But as we continue to try a variety of approaches to prove we can deliver on the value proposition, I hope these strategies provide a few ideas. 

John Byrnes, MD, is chief medical officer, Sisters of Charity of Leavenworth Health System, Denver, and a member of HFMA’s Colorado Chapter.

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