Value-based care is about changing financial incentives from volume to value and population health, says John Kelly, principal business advisor at Edifecs. It’s also about providing quality care at a lower cost.
However, traditional revenue cycle KPIs (key performance indicators), such as days in accounts receivable, volume of claims denied, or cost to collect, are not as relevant because they don’t capture the quality of care that’s rendered, says Kelly. Rather than focusing solely on financial efficiency, organizations that want to increase profitability should monitor these KPIs instead:
Emergency department (ED) rates. Some payers require organizations to stay below a certain volume of ED visits annually as a pre-requisite for shared savings. Others use it as a general barometer of the quality of care patients receive throughout the system and factor it into future payment rates. Regardless, organizations should monitor their ED rates closely and implement outreach programs to engage patients in primary or specialty care with the overarching goal of reducing ED visits.
Readmission rates. Some payers also specifically carve out readmission rates as part of a shared-savings contract while others use it to assess quality of care for future payment rates. Preventing readmissions often requires a coordinated effort that includes transitional care management, medication reconciliation, and patient education.
Admissions per thousand patients. Organizations should strive to reduce this number through chronic disease management. For example, consider monitoring patients with congestive heart failure to identify those individuals at risk for admissions. Many electronic health records (EHR) include algorithms to help physicians assess populations based on their symptoms so physician offices can offer outreach to those individuals before an exacerbation or complication occurs.
Number of potential opioid abusers identified per day. Payer contracts could include a benchmark for identifying opioid use and abuse as a prerequisite for shared savings.
Ultimately, KPIs will move away from balance sheets, ledgers, and numbers to data that’s being collected and managed in the EHR. A critical factor will be ensuring that data is collected consistently and across facilities and locations, including physician practices.
Kelly notes that we don’t yet know the effect of these new KPIs on profitability. We can assume, for example, that if ED visits go down, our profitability will go up, but there often is not a clear and direct correlation.
Read more comments from Kelly in an extended Q&A published in HFMA’s Revenue Cycle Strategist newsletter.