From the President 

Richard L. Clarke, DHA, FHFMA

Clarke_webThe concept of value-that is, the relationship of quality to cost-has finally arrived in health care.

For decades, most other sectors of the economy have embraced consumers' perspectives of value and value drivers. And as consumers, we constantly make purchase decisions based on the perceived relative worth of one item versus another-from cars to dining to clothing to financial services. This increased focus on value in health care is evident in the numerous programs, pilots, and demonstrations attempting to shift the basis of payment from volume to value.

In early April, CMS published the proposed rule for Medicare's Shared Savings Program-Accountable Care Organizations. For the most part, provider reaction to this proposed rule was not favorable. My conversations with finance officers throughout the country suggest that many would not participate in the initial group of ACOs based on the proposed rule. HFMA's comment letter to CMS on this rule was many pages long, listing multiple concerns with the approach.

But the current fragmented,volume-based fee-for-service payment mechanisms create a healthcare system that produces too little quality at too high a cost. It is unsustainable.

So we must move in the direction of improving both quality and cost for our purchasers. We must begin the value transition regardless of Medicare's initial approach. We must be accountable for value. The question for healthcare leaders is how to achieve that elusive and important goal.

HFMA will begin to answer that question on Tuesday, June 28, at ANI: The Healthcare Finance Conference in Orlando, when we unveil the first report from HFMA's Value Project. This project was supported by 17 healthcare systems throughout the United States and involved many interviews, surveys, and working group sessions with financial, clinical, and administrative leaders. The results-featured in the report along with a web-based tool-identify better practices and the capabilities that healthcare delivery organizations must develop if they are to understand, improve, and communicate the value of their services.

Our findings will help financial and other leaders dig deeply into the "how" of these capabilities by learning from organizations that are improving safety and outcomes while removing waste from the care delivery system. For example, Southwest Florida-based Lee Memorial Health System has collaborated with a large local employer to offer clinics that provide employees with ready access to a tailored menu of primary care services, reducing the employer's healthcare costs while increasing employee productivity. For another example, Illinois-based Advocate Physician Partners' Asthma Outcomes initiative has achieved an asthma control rate of 88 percent-38 percentage points above the national control rate-reducing absenteeism and lost productivity by an estimated 58,436 days.

The transition to being more accountable for value will be challenging. But systematically building capabilities contained in our report will help organizations thrive in the new era of accountability. It is our responsibility to build a sustainable healthcare system for our society and our children. HFMA's Value Project will help fulfill that responsibility.

Publication Date: Wednesday, June 01, 2011

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