Bobbi Brown 2Value-based purchasing should be on the mind of every finance executive in health care. The opportunities to benefit from value-based purchasing contracts are great—and the consequences of not making the transition to a fee-for-value model could be devastating. But tackling value-based purchasing is no easy task.

That’s why I’ve outlined steps that help healthcare organizations prepare for value-based purchasing. In a previous post, I discussed the first step: assessing your current performance. Three additional steps are also critical:

  • Implementing education programs
  • Developing a healthcare analytics strategy
  • Identifying areas for clinical quality and cost improvement

In this post, I’ll discuss the importance of implementing education programs as your organization transitions from volume- to value-based reimbursement.

The Role of Finance in Value-Based Purchasing Education

Education isn’t a large part of the finance executive’s role. The truth is that it is unlikely that a finance executive will ever be 100 percent accountable for educating the organization on value-based purchasing. This responsibility will probably be split between finance and a quality department, probably led by a CMO. However, now that organizations are being reimbursed based on value-based purchasing principles, I don’t find it useful to quibble about whose job is it to ensure that everyone in the organization understands how this change affects them. It’s everyone’s job. And finance needs to be proactive and take a leadership role.

Education in a value-based purchasing context can be seen as comprising three activities: teaching, learning, and selling. The teaching aspect is straightforward. You have to explain to staff all of the regulations and what the impact is on your organization. The second aspect, learning, represents the collaborative nature of education on value-based purchasing—as you teach clinicians about the financial impact of value-based purchasing, the clinicians, in turn, can share clinical insights about each regulatory measure. They can explain unfamiliar clinical terms, share their opinion of where the best opportunities to improve might lie, and pinpoint specific measures where they need your help to improve. Finally, you have to sell change to clinicians. Your salesmanship must go beyond informing them of the importance of high-quality, affordable health care. Your education needs to drive behavioral change, advocating for more-thorough documentation, accountability for readmissions rates, and more.

Three Audiences for Value-based Purchasing Education

Finance executives should focus their education efforts on three audiences: clinicians, finance staff and payers.

Educating clinicians. My first experience in educating physicians was presenting the capital budget to a physician committee. I wanted to be transparent and explain our process, so I presented a very technical financial application to them. I asked them questions such as, “Do you all understand net present value?” Of course, no one had any questions. What they really cared about was why their particular project was not on the list of funded projects.

I had a lot to learn about engaging physicians and would never approach them with such technical financial concepts again. Over time, I learned how to speak their language and how to explain to them how we prioritize projects. They came to understand which projects needed a positive cash flow. They also learned how and why certain projects got approved with negative cash flow.

Today I work frequently with physicians, explaining value-based purchasing principles to them and the relationship between cost and quality. Here are two things that I’ve learned from these teaching experiences.

First, never ask whether someone understands all the implications of the Affordable Care Act. No one will admit that they don’t understand. And those who think they understand probably don’t understand every aspect of it.

The second lesson I’ve learned is that data is one of the most important tools for educating physicians about value-based purchasing. They have to see the numbers in front of them showing, for example, that they are ordering an expensive test four times more often than their peers and how that affects cost. And you must have good data. Physicians rarely trust the first set of data you show them; they’re so used to getting bad data that they will throw it right back at you. But if you can show them data in real time and continually refine the data, showing them exactly what they want to see and allowing them to dig down further into the data, they begin to get very excited about the possibilities. This is a necessary process of gaining physician trust.

Educating finance staff. Educating finance staff makes the transition to value-based purchasing much smoother. Finance staff have considerable expertise in the financial data, but they need to be able to understand quality metrics and their importance. They also need to be able to explain these concepts to people who don’t have a finance background. I work with a manager who managed the analytical group for a multisystem healthcare entity. Several of her staff are now working at my company. I am so impressed with their overall knowledge of health care and their passion for transforming health care in the United States. She had spent a lot of time training them until they caught the vision—and it shows in their commitment.

I saw a wonderful example of educating finance staff in an article on the financial boot camp offered by Bon Secours Virginia Health System published in the February 2014 issue of H&HN (Butcher, L., "Intensive Financial Boot Camp Helps Create Team Players,” Feb. 11, 2014). In this program, finance personnel participate in a clinical transformation project with a clinical team. In addition to providing this hands-on experience, the program’s curriculum covers elements of health reform and tools for clinical transformation and clinical collaboration. This level of investment in finance staff is something I hope to see emulated in organizations throughout the country.

Educating payers. Educating payers requires data, plain and simple. You have to be able to show them your quality and explain the benefits of contracting with you. I was lucky enough to be included on a payer call recently where a physician showed the results of the hospital’s clinical improvement initiatives. He showed how the consistent ordering pattern of an antibiotic lowered costs and length of stay. Patient satisfaction and quality metrics were high as well. What a great story to take to a payer! Marketing yourselves to payers using quality and cost data will be key to your contracting success in a value-based purchasing environment.


Bobbi Brown is vice president of financial engagement for Health Catalyst, LLC, Salt Lake City.

Publication Date: Tuesday, June 17, 2014