Change Is Happening: Preparing for the Transition to Value-Based Care

Published on: 

As the healthcare industry positions itself for the change to value-based care, there needs to be a widespread change in terms of collaboration between physicians, hospitals, and payers.

As the healthcare industry positions itself for the change to value-based care, there is a widespread change in terms of collaboration between physicians, hospitals, and payers, said Terri Welter, MSHA, principal at ECG Management Consultants, at the Fall Managed Care Forum 2015, presented by the NAMCP Medical Directors Institute, the American Association of Integrated Healthcare Delivery Systems, and the American Association of Managed Care Nurses.

In the 1980s and 1990s, patients did not like the so-called gatekeeper model because they did not want to be told where to go for their care. Although they still don’t like that model, communication and engagement in the current team model through care managers is much improved, she explained.

The idea now is to tie a patient to a medical home so providers can deliver the right care at the right place at the right time.

“That is a very different model than we had under the traditional [health maintenance organization] model, which is more procedural in order to go to the [primary care physician] to get a referral,” Welter said. “So patients are expecting that communication and that engagement in a more innovative way than we have [provided] in the past.”

CMS is driving the change with the way it pays physicians with the announced goals to associate a higher percentage of payment to physicians to value. This has made the transition shift from being voluntary to being mandatory. That move is just on the provider side; meanwhile, on the hospital side, a bundled payment model that had been voluntary is now being rolled out as mandatory for certain regions, Welter said.


“[This] is just another indicator of what is happening in the marketplace and why you do want to get prepared for value, because the change is either happening or on the way,” she said.

Lillian Lee-Chun, JD, manager at ECG Management Consultants, explained how the healthcare industry can prepare for this move to value, which requires that organizations think about their operations, become more efficient and scale, understand what is going on in their local markets, consider financial components to ensure payment for value, and lastly, the technological components have to be there so organizations can get the right data to assist with implementing value-based care.

Through work with organizations across the country, 5 key components that are critical to the move to value-based care have come up:

  1. Care delivery transformation Organizations that are focused on this are establishing frameworks and physician forums to oversee the transformation. They take a look at the clinical and claims data to identify opportunities and the populations they need to pay most attention to.
  2. Provider network Organizations have to ensure they have a comprehensive and aligned provider network and that the providers are adhering to the established protocols.
  3. Payment models As organizations go down the pay to value-based care, they need to have payer partners who will reimburse for the work they are doing.
  4. Clinical and business informatics Organizations have to integrate their clinical and business data so if they are identifying opportunities, they not only understand it clinically, but see cost-saving opportunities as well. Unfortunately, Lee-Chun said that organizations often don’t have insight into their cost performances.
  5. Organizational foundation Ensuring the organization has the structure to take on value-based contracts and the structure in place for physician leaders to make critical decisions to move forward. In addition, accountability is important. “Some clients lack the accountability structure,” she said, adding “you may have great plans, but if there’s no accountability in place to move the dial, you will stay at a standstill.”

Martin D’Cruz, MBA, FHFMA, vice president system executive at St. Vincent Health provided an example of an ongoing case study of a system moving to value-based care. He outlined the progress so far, the challenges they’ve run into, the lessons learned, and a look at the future.

The health system established a list of costs per member per month based on historical data, looked at inpatient utilization and avoidable admissions, and took a deeper look at the population and areas where it was doing well.

As they started the program, they formed committees because they wanted to make sure senior leadership would have to play a pivotal role in embracing the model.

“[These committees] meet on a monthly basis to make sure that we have the data for our physicians to manage the care of their patients,” he said. “When we first started, data was not available on a timely basis. So the issue became with our physicians: ‘this is data that is 6 months old and I cannot do anything with it.’”

St. Vincent’s was able to determine that of its 50,000 patients, about 4500 members need care on a regular basis. So to manage these patients, the health system hired more nurse navigators.

One of the challenges St Vincent’s ran into is that physicians want to be compensated for all the care they do for their patients. So the health system is working with them so that they will benefit in the long run.

Some of the changes St. Vincent’s has implemented include extended hours for primary care physicians so that the clinic can be open from 6 am some days and as late as 8 pm some days. Implementing this change means patients don’t have to wait to see their primary care physician.

“If you’re still on that fee-for-service model, it’s going to be very difficult to change the culture,” he said. “It’s going to take a lot of time.” And if organizations try to move to value-based care without the infrastructure in place, they likely won’t meet the reimbursement increases that leadership wants.

“So we’re moving very slowly, but at the same time building the infrastructure as we move forward,” D’Cruz said.