From the President


Richard L. Clarke, DHA, FHFMA

A predominantly volume-based healthcare system isn't sustainable, and healthcare leaders are taking steps to transform their organizations for a value-based system, despite formidable challenges.

That was the message from an HFMA retreat last month that included more than 100 participants-finance leaders of healthcare provider organizations, joined by other C-suite leaders and representatives of payer organizations.

At the outset, participants answered a series of questions about the impact of environmental forces on key healthcare stakeholders. Most attendees believed that employers would continue to shift risk to employees and providers. They also believed that government would continue to reduce the rate of payment increases through various value-based payment approaches and pilots, as well as through overall rate cuts. They noted that employees and consumers need a greater economic "skin in the game" through increased responsibility for the cost of their care, but they also noted that providers need to enhance systems to help patients improve their health and maintain wellness.

Most notably, participants believed that a key survival technique for providers is improving quality while reducing cost-that is, achieving value. This belief was reflected in formal presentations and discussion groups throughout the event.

Presentations from a purchaser panel highlighted the need for a transition from volume to value, and several speakers congratulated HFMA on its focus on value. Other presenters discussed the use of telemedicine to enhance quality at lower cost and described how a patient-centered medical home pilot helped build capabilities with population health management and increase value.

Jason Hwang, MD, who, with Clayton Christensen and Jerome Grossman, co-authored The Innovator's Prescription: A Disruptive Solution for Health Care, shared a warning to providers about the effect of disruptive innovation, as well as strategies that providers can use to harness disruptive innovation. Finally, a panel discussion of key service providers to the industry highlighted their view of the future delivery system and strategies for success.

After extensive roundtable discussions, participants agreed that change is coming, although the exact form it will take is still unclear. Most attendees were not interested in participating in the CMS pilots for accountable care organizations and bundled payments, but expressed an interest in working with private payers on techniques to increase accountability for both quality and cost. True clinical integration was acknowledged as critical, as were new techniques to finance strategic initiatives related to integration (physician practices and IT). But most also acknowledged that they lack both experience and comprehensive information (business intelligence) to be successful. Many cited HFMA's Value Project findings on key capabilities that need to be developed as a key area of attention.

Finally, attendees acknowledged that costing systems used by provider organizations were generally inadequate and must be improved. This is an area where finance leaders must step up their efforts.

The conference focused on the need for change, the desire to be more accountable for quality and cost outcomes, and a sense that new approaches must be used. These areas suggest that health care is ready to engage in the value transformation.

Publication Date: Tuesday, November 01, 2011

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