From the Chair
Greg Adams, FHFMA
No one hits a home run every time-not even the late, great Babe Ruth. In fact, home-run hitters tend to strike out often.
Babe Ruth hit 714 homers, but he also went down swinging 1,330 times. If he was afraid to fail, he didn't let it get in his way. Sometimes, in health care today, it feels like we have to swing for the fences, given what's at stake with new payment models, accountable care organizations (ACOs), and other value-based payment structures.
And while we can't let the fear of failure get in our way, that doesn't mean we should swing wildly at every pitch that comes our way. It's important to pick the right pitch to swing at. As Max Reynolds advises in his article about ACOs in this issue of hfm, "Look before you leap."
In HFMA's Value Project report, which was released in June, five potential value strategies were identified, based, in part, on a provider's choice of how much responsibility for risk to assume and when to assume that risk. Of course, every choice carries some risk. At one end of the continuum, providers that seek to keep the price/volume-driven status quo may reduce their risk in the short run, but risk the eventual loss of organizational independence if they are unable to maintain this strategy. And at the other end of the risk continuum-population health management- providers that choose to accept responsibility for the health of a defined population are taking on risks of a different scope and magnitude. Those that attempted this strategy years ago under the guise of capitation will not soon forget the costs of failure. Understandably, they are not eager to take those risks again.
Each organization should weigh the potential risks and benefits of various value strategies in the context of its own unique strengths, weaknesses, opportunities, and threats. Within that context, HFMA's Value Project offers a way forward. It starts with assessing your organization's current and desired future state on the value continuum, based on your degree of integration and your willingness and ability to accept risk. HFMA is developing a web-based tool that includes a self-assessment questionnaire and in-depth resources on the skills organizations need to develop to succeed as value providers. In the coming months, HFMA will also produce a series of reports describing how to bridge the gap between current practices and a value-based future. Through the use of these tools, HFMA can help our members choose the right pitches to swing at and help improve chances of success.
Of course, no matter how well prepared you are, there's no guarantee you're going to hit one out of the ballpark. But as any good coach will tell you, as long as you're well prepared, don't worry so much about the risk of failure. Worry about the chances you miss when you don't even try.
Publication Date: Friday, July 01, 2011