Too many tread­ing wa­ter in move­ment to­ward value-based health­care

Modern Healthcare - - COMMENT - By Kevin Lofton In­ter­ested in sub­mit­ting a Guest Ex­pert op-ed? View guide­lines at modernhealth­care.com/op-ed. Send drafts to As­sis­tant Man­ag­ing Edi­tor David May at dmay@modernhealth­care.com.

Few things are con­stant th­ese days in the ever-chang­ing world of health­care, but there’s one in­con­testable cer­tainty in the mind of ev­ery leader re­spon­si­ble for plot­ting the strate­gic di­rec­tion of a hos­pi­tal or health sys­tem: Value-based pay­ment is here—and it’s here to stay.

This re­al­ity leaves us with sev­eral mul­ti­mil­lion-dollar ques­tions, such as: How ea­gerly and ag­gres­sively do we em­brace this change? How rapidly do we plan to make this trans­for­ma­tion from tra­di­tional fee-for-ser­vice to value-based pay­ment? And, most im­por­tantly, what is the hon­est, ac­cept­able level of tol­er­ance in terms of the con­sid­er­able costs as­so­ci­ated with this sig­nif­i­cant change?

For many of my col­leagues, the pre­ferred anal­ogy de­scrib­ing the am­bigu­ous na­ture of this move to val­ued-based care is the im­age of a hos­pi­tal ex­ec­u­tive try­ing to do a lit­tle of both at the very same time—one foot on the dock, the other in a bob­bing, wob­bly row­boat. Metaphors and im­agery aside, this is a tough bal­anc­ing act in un­charted wa­ters, es­pe­cially for those of us so com­fort­able with the sta­tus quo.

At Catholic Health Ini­tia­tives, we be­lieve we’ve al­ready left the dock and are be­gin­ning to get a good han­dle on nav­i­gat­ing this change. While other health sys­tems are clearly on board, too many are tread­ing wa­ter.

De­spite the for­mi­da­ble chal­lenges ahead, few lead­ers would ar­gue that this change isn’t long over­due for a dys­func­tional, hugely ex­pen­sive health­care sys­tem that tra­di­tion­ally has pro­vided fi­nan­cial in­cen­tives for the num­ber of pro­ce­dures per­formed—and not for good out­comes and health­ier pa­tients.

In Jan­uary, HHS Sec­re­tary Sylvia Mathews Bur­well an­nounced with some fan­fare a na­tional plan to tie at least 30% of tra­di­tional, fee-for-ser­vice Medi­care pay­ments to in­no­va­tive value-based pay­ment mod­els, in­clud­ing accountable care or­ga­ni­za­tions and bun­dled-pay­ment ar­range­ments, by the end of 2016. She seeks to tie as much as 50% of tra­di­tional, fee-for-ser­vice pay­ments to th­ese al­ter­na­tive mod­els by the end of 2018.

CHI en­thu­si­as­ti­cally sup­ports this re­align­ment of the health­care in­dus­try’s de­liv­ery and pay­ment mod­els. It’s the only way that we can de­liver bet­ter care at lower costs, achieve the highly de­sired “triple aim”—and truly move from sick care to well care.

Our sys­tem has been mak­ing this tran­si­tion across much of its na­tional en­ter­prise since even be­fore the pas­sage of the Af­ford­able Care Act. CHI, which op­er­ates 105 hos­pi­tals, has more than 400,000 en­rollees in val­ue­based care plans, in­clud­ing Medi­care shared-sav­ings pro­grams, the Bun­dled Pay­ment for Care Im­prove­ment ini­tia­tive, and our or­ga­ni­za­tion’s own health plan for em­ploy­ees and de­pen­dents.

Of its 400,000-plus en­rollees in th­ese plans, CHI has about 250,000 en­rollees in 10 shared-sav­ings sites, mak­ing it one of the largest provider par­tic­i­pants in the coun­try. The or­ga­ni­za­tion has five sites in the bun­dled-pay­ments pro­gram, with as many as five more join­ing soon—in­clud­ing in ar­eas where ex­ist­ing health plans are some­what re­luc­tant to move in this di­rec­tion. All told, nearly 30% of CHI’s to­tal net pa­tient ser­vice rev­enue comes from some type of a val­ued-based model of care and pay­ment.

While th­ese num­bers are im­pres- sive, CHI con­tin­ues to strug­gle with the chal­lenge of car­ing for pa­tients un­der th­ese new cri­te­ria while con­tin­u­ing to re­ceive the bulk of re­im­burse­ment un­der fee-for-ser­vice guide­lines.

Still, we’re show­ing early pos­i­tive re­sults: For in­stance, at Mercy Med­i­cal Cen­ter in Des Moines, Iowa, which op­er­ates a Medi­care ACO, read­mis­sions de­creased by 14% be­tween 2009 and 2014, and emer­gency depart­ment vis­its fell by about 9%. In Lit­tle Rock, Ark., a bun­dled-pay­ment ini­tia­tive for or­tho­pe­dic pa­tients at CHI Health St. Vin­cent’s has sig­nif­i­cantly low­ered the cost of care over a 90-day pe­riod.

De­spite Bur­well’s bold prom­ise of change, the in­dus­try is mov­ing too slowly to­ward the ul­ti­mate goal of cre­at­ing a re­im­burse­ment model that fea­tures value-based re­im­burse­ment as the dom­i­nant sys­tem of pay­ment. The re­sults of a re­cent Mod­ern Health­care sur­vey at­test to this di­chotomy: Although more than three-quar­ters of the mag­a­zine’s Power Panel of top health­care ex­ec­u­tives sup­port this tran­si­tion, only about 1 in 5 fa­vor do­ing away with fee-for-ser­vice.

Change, how­ever, is as in­evitable as it is un­com­fort­able.

For a faith-based or­ga­ni­za­tion like CHI, this con­cept of value-based care is not at all new or for­eign. In fact, pop­u­la­tion health—keep­ing large groups of peo­ple free of sick­ness and dis­ease—is an in­te­gral part of the or­ga­ni­za­tion’s mission to cre­ate health­ier com­mu­ni­ties.

And that rep­re­sents a per­fect align­ment of qual­ity, car­ing and value.

Kevin Lofton is CEO of Catholic Health Ini­tia­tives, based in Englewood, Colo.

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