HFMA Executive Roundtable

Although many healthcare organizations have begun the journey of moving toward value-based care, they still have a long way to go to truly capitalize and scale on these new models. Organizations have to address the challenges of contract negotiation, enrollment and member management, data access and assimilation, and on-the-ground implementation while remaining focused on the goals of quality and efficiency. In this Executive Roundtable, sponsored by GE Healthcare Digital, senior healthcare leaders discuss how they are pursuing value-based reimbursement and offer some key actions organizations can take to find success during this monumental shift.

Where is your organization on the journey to value?

Andrew McCoy: Fairview Health Services has jumped in with both feet. In 2009, our CEO felt that health care had to move in the value-based direction because it would align the incentives of the payer and provider to reduce costs, which, in turn, meant serving our customers better. We started talking to payers about changing contracting parameters to include incentives around total cost of care by attributed population. By 2011, all of our contracts offered these incentives, and we took the next step, setting up a Medicare Pioneer Accountable Care Organization (ACO) that shares some risk with the Centers for Medicare & Medicaid Innovation (CMMI) and Medicare Advantage. Now, we have a patient population of 300,000 under shared-risk arrangements.

Brittany Cunningham: Here in Tennessee, state-mandated bundles were initiated in 2015, encompassing 75 episodes of care over four years. With this in mind, along with the federal mandates rolling out, Vanderbilt University Medical Center decided not to wait to pursue value-based care. We centralized efforts in a new office and created a team to take responsibility for responding to state and federal mandates. 

As director of episodes of care, I lead this team of project managers, operational analysts, and quality consultants in analyzing episodes and digging into proposed rules, working with patient care centers and front-line leaders to perform any clinical redesigns necessary to meet our mandates.

Melinda S. Hancock: Virginia Commonwealth University (VCU) Health System has been quite deliberate in selecting demonstration models that complement our system’s strengths as a large academic medical center—primarily the delivery of complex care. We participate in the Centers for Medicare & Medicaid Services (CMS) Independence at Home project, as well as a state dual eligible demonstration project, and we have received a Transforming Complex Care grant from the Robert Wood Johnson Foundation. 

Our organization is also working to get ahead of the curve. We were nominated for a Comprehensive Joint Replacement (CJR) bundle and taken out in the final phase, so we decided to behave as though we were participating in the bundle anyway. We look at the data to see where we need to learn and shift. If joint bundling becomes a mandate for us, we’ll be ready to meet the regulations.

What challenges have you encountered with value-based models?

Cunningham: Our No. 1 challenge has been engagement. We have to merge the process and culture changes that come with value-based care into the normal workday, and although people aren’t resistant per se, they want to prioritize their urgent tasks over what they see as long-term goals. We have found that approach is everything when changing people’s perspectives. For example, many physicians become more engaged once we share data and give them feedback on their performance. 

Jon Zimmerman: I see a few persistent challenges for our clients. One relates to the specificity of contracting. If contracts don’t clearly delineate payment terms and how they’re met, there is an opportunity for disagreements down the road. Another hurdle deals with the changes to provider and payer workflow. Both entities are undergoing change at the same time while learning to work together differently, and this can be tough. Coordinated action is essential in value-based care, which requires a different mind-set, as well as a common set of information. All this necessitates robust analytics and new revenue cycle tools that organizations are just beginning to use. 

McCoy: I agree. The nitty-gritty of setting up agreements, establishing analytics that measure our performance under the new contracts, exchanging and warehousing payer data, and building tools to extract data in useful ways—all of these things are difficult. Despite the challenges, we’re continuing to develop the best solutions we can and make adjustments to reach our goals. 

To lay groundwork for the new payment structures, how has your organization improved collaboration?

McCoy: Fairview is a strong supporter of value-based models based on the total cost-of-care for the customers we serve. We’re disinclined to use insular models built to drive down the cost of a particular service. Total cost-of-care models demand greater coordination across specialties and facilities, so the process is inherently collaborative. 

Hancock: At VCU, we look at internal cost as well as bundle data—including public use data that we purchase—to find opportunities to improve efficiency and reduce variation. The process brings people together to collaborate and has achieved great results that propel the program forward. Externally, we’re looking at how we discharge to home health and skilled nursing facilities to learn how we can partner better, share information, and create expectations as a preferred network. In addition, we benefit from having a 190,000-member Medicaid HMO as part of the VCU Health System. Our collaborations have already allowed us to develop the knowledge and skills to effectively manage costs and quality for those most complex patients who currently consume a disproportionate share of resources.

Cunningham: Last year, our centralized value-based care team partnered with orthopedics, neurology, and pediatric asthma to go through their processes and identify ways to decrease variation and increase efficiency. Based on these reviews, we were able to develop new protocols and time frames. This year, we’re starting in the neonatal intensive care unit and working with cardiology for coronary artery bypass graft surgery and acute myocardial infarction. Our centralized group manages all protocols, post-acute care, and time frames through our office—a more straightforward approach than having each department build its own post-acute care partnerships. 

How are your data needs changing? What data do you use, and how do you access them? 

Cunningham: At Vanderbilt, we have good internal data, which we use a lot, but public data are not where they need to be to make big changes. The state used to give us PDF reports, but they were not overly helpful. Now, we receive Excel spreadsheets. Medicare data are great, but they’re six months old—we need current information to make continual changes. Distributing the data is also critical; my team has an operational analyst whose main role is building reporting tools and creating report cards.

McCoy: We’ve built up our data warehouse to integrate electronic health record (EHR) data, claims data, and population data. In addition, we lease a vendor tool that allows us to assess the population’s acuity. Staff look at the data and track it over time, and it informs our physician compensation models.

For payer data, patient privacy and the timing of delivery are concerns. For open-access products that allow patients to go to any health system, the risk arrangement with payers is based on a retrospectively attributed population. Payers wait about 90 days after a quarter to verify we are the provider and send us the data, which makes the data at least 120 days old. This means payer data are obsolete for patient care. We’ve begun setting up a limited network with payers where patients remain in our risk pool for the year, which allows us to get data sooner.

David Kovel: At this time, if data don’t come from the EHR, they generally come slow, complicated, dirty, and late. Claims and utilization data from payers are informative but not actionable at the point of care a month later. At Continuum Health Alliance, we went to two major national laboratory companies and asked them to supply population health data directly. Their data are critical to protocols, and it is much easier to get data straight from them than from every EHR in the community. 

Zimmerman: There’s no question that providers require more current data from outside sources. Physicians can’t wait months for payers to tell them if the patient in front of them has had a recent hospital visit. For the data to be actionable, they must be current and presented within the employee’s workflow, reinforcing the right behavior at the right times. 

What metrics do you track to monitor value-based reimbursement? 

Zimmerman: For a good foundation, providers should track CMS Star and HEDIS measures that relate to quality and satisfaction. They can benefit from expanded cost-to-collect metrics as well, such as the cost to collect on bonus revenue from a value-based contract. In these new reimbursement models, organizations will need to be aware if they’re spending $12,000 to collect $10,000. 

The intent of value-based care is to examine what’s in it for providers and payers and whether that combination makes it better for patients. Providers might consider how their actions affect the payer’s medical loss ratio and administrative costs. Analysis also can show providers how the goals of the Triple Aim (better quality, lower costs, improved patient experience) align with metrics for value-based care.

McCoy: Fairview hasn’t reached pure capitation in any area yet, so we’re still paid fee-for-service for now. Each payer with which we have a shared risk arrangement sends us quarterly reports on our total cost-of-care performance and how it compares to the rest of our market. From those reports, we dive into claims details and other information so we can examine our performance against expectations.

We’ve developed a population health operation analytics department, where our analysts track information from payers and look at internal data to assess our performance. They ask, “What are the costs for the patients we’re serving? How can we influence that in a positive way?” These aligned incentives are ingrained thinking now.

Kovel: Continuum Health Alliance uses a population health platform to develop analytics, typically running regression statistics and risk-adjusted values so we can try to adjust physician behavior to match benchmarks. We also use data to inform providers if they will meet shared savings projections. 

Clients often also need us to create attribution for the correct physician. They know which provider organization a patient used but not the specific doctor. We use a solution that gives them the right physician, which supports both internal evaluation and reimbursement.

Cunningham: The classic definition of value is increased quality over decreased costs, and there are valuable metrics tied to both parts. Tennessee defines some quality measures for each type of care episode, so we use those, as well as internal quality measures. Readmission is a hot metric for payers, and measures such as follow-up phone calls or confirmed discharge appointments show whether an organization is engaging in processes known to limit the likelihood of readmission. On the cost side, we look at reconciliation from the payer perspective, internal variable cost decreases, and efficiency measures, such as standardization of care. 

Do organizations need to make IT infrastructure changes to support value-based models? 

Kovel: Providers need data to help them succeed in a value-based environment, and IT systems can deliver those data. One example is a system that we use that overlays the EHR and indicates where patients may have deficiencies in their protocols. We also use applications that are population health-oriented, so providers can look at the population as a whole and identify integration issues.

Hancock: VCU has a great partnership with our EHR vendor, and we meet routinely to work through data collection and reporting needs. As we move toward a merit-based physician payment system, we need to know what analytics have to sit on top of our EHR for real-time tracking, so we can know how we’re doing on any given day. We also have to start creating connectivity for health information exchanges. 

We know the dollar value of every metric at risk across all at-risk contracts and their expected performance. By knowing this, we can gauge our needed resources and the year-over-year impact of improvement or, conversely, the impact of doing nothing. 

McCoy:  At Fairview, we can access necessary information, but we struggle with a process that is still too manual and cumbersome. Our analytics group spends time pulling and assembling data from the warehouse instead of doing what we need them to do—working with clinicians to design data systems for performance initiatives. We want to align back-end data with the point of service, improving data access for physicians in the exam room without slowing them down. 

Zimmerman: IT changes should serve three emerging realities: first, multiple stakeholders want in-depth information, such as eligibility, benefits, claims remittances, patient histories, population acuity, care plans, and more. Second, collaboration promotes value-based outcomes. When physicians at different sites simultaneously view lab reports and other data, reach a diagnosis, and get instant payer review and approval, both quality and cost will be positively affected. Three, providers need to show evidence for reimbursements. An analytical suite can gather and produce evidence to support decisions and actions. Underlying all of these IT enhancements is security that doesn’t get in the way of people’s work.

What lessons learned would you share with other organizations looking to pursue value-based models?

Cunningham: It takes a lot longer than you expect! When CMS mandates indicate a program will start in six months, it’s too risky to wait and see if you’re included—start working to fulfill the requirements now. From our experience, it also pays to have a centralized value-based care team. Vanderbilt is a large academic medical center, so it is helpful for our team to keep eyes and ears on value-based care initiatives and let everyone else do their jobs. For example, when reconciliation reports come in, they are very confusing. My expert team has the knowledge to make sense of them. 

Zimmerman: One thing I’m learning from one of my most talented, focused, and effective customers is that it’s terribly important to engineer the workflow across the stakeholders inside the organization. That means delivering evidence-based rules to practitioners at the right time, in the right context, so they can be applied. It also involves reviewing patient encounters to make sure they include all appropriate care, and then submitting the results of those encounters to the payers, colleagues in the team or practice, other providers, and the patients themselves. 

Kovel: If you intend to stay on a fee-for-service payment methodology, you’re at risk for reduced reimbursement. The only way healthcare organizations can see the same level of reimbursement they’ve earned in the past is to participate in value-based programs. An excellent first step is to use the EHR in a more sophisticated way, leveraging opportunities to extract and report data to providers who can use it and adopting new financial management tools to administer value-based contracts. 

McCoy: Top-down philosophy change and advocacy from our CEO and board allowed Fairview to start quickly. Value-based care became part of our strategic plan, and the concept spread throughout the organization. That initial shove drove us to get a lot of patients under new contracts. When something affects a large group of people, you create a demand to deliver value-based care. It just made sense for us to expand that approach to everyone. 

It’s not an overnight change, however; conflict is inherent in trying to drive down patient costs while collecting fee-for-service reimbursement. We have had to be committed to doing the right thing and know that eventually the financial benefits will follow.

Looking into the future of value-based care, how do you see its role in the industry in five years?

Kovel: Providers are going to have to get adept at managing a blend of revenue compensation models within their organizations, getting sophisticated in monitoring the practice’s financial business and adopting common clinical protocols of high value to address medical outcome expectations.

McCoy: As more and more costs shift to patients, they will see the benefits to selecting a limited network plan with a lower premium. Organizations need to be able to deliver on cost so we can justify those lower premiums. Our ability to manage the population’s costs will determine whether we gain or lose market share.

Zimmerman: The folks at CMS are serious, and the bonus structures and changes to value-based compensation are here to stay. There will be successes and failures. The data capabilities and legacy revenue cycle solutions required in a fee-for-service model don’t support value-based care, so it’s important to make changes up front to prepare. Flexibility is key. The leaders who can learn quickly and adapt will be fine. 


Participants in the HFMA Executive Roundtable

Brittany Cunningham is director, episodes of care, at Vanderbilt University Medical Center in Nashville.

Melinda S. Hancock is chief financial officer of Virginia Commonwealth University Health System in Richmond, Va.

David Kovel is chief information officer at Continuum Health Alliance, LLC, in Marlton, N.J.

Andrew McCoy is vice president of revenue management at Fairview Health Services in Minneapolis.

Jon Zimmerman is vice president and general manager at GE Healthcare in Seattle.


About GE Healthcare

GE Healthcare provides transformational medical technologies and services to meet the demand for increased access, enhanced quality, and more affordable health care around the world. From medical imaging, software and IT, patient monitoring and diagnostics to drug discovery, biopharmaceutical manufacturing technologies, and performance improvement solutions, GE Healthcare helps medical professionals deliver great health care to their patients. For more information about GE Healthcare, visit our website at www.gehealthcare.com


Publication Date: Tuesday, November 29, 2016