How Healthcare Providers Can Thrive in a Risk-Based Payment Model
Value-based care is the future of healthcare, and we’re all going to be affected by it in the healthcare industry, one way or another. Even those who choose to stick with their archaic fee-for-service setup will still be forced to ponder some new questions thanks to the competitive environment that is being brought about by value-based care.
Before value-based care was even on the radar, the main metrics that were measured were things like operations, quality, profitability, and satisfaction. The primary goal of using these metrics was to increase profitability, improve throughput, and grow volumes. However, it was inefficient because it put the emphasis on money rather than quality care of the patients.
Now that value-based care is becoming the norm, even providers who still want to use the old fee-for-service metrics must look at the new metrics being used by value-based care organizations. Although they may not want to use value-based care metrics to measure the quality of care, their referring physicians, patients, and purchasers are all using value-based care metrics.
The new questions raised by value-based care are forcing healthcare providers to go back and take a second look at the metrics that service lines are tracking to assess their performance. They are quickly learning that their metrics need to present the correct data required to answer the new questions that service lines are inquiring about.
If healthcare providers want to increase their overall understanding of what is considered good performance in this new value-based world, they need to focus their attention on four key areas that make up the bulk of what value-based care is measuring. Focusing on these four areas will be vital to the success of any healthcare organization looking to figure out how their service lines are contributing to their overall strategy and initiative within value-based care metrics.
The four main value-based care metrics are:
- Share of Continuum
- Episode Value
- Service Quality
- Evidence-Based Care
Share of Continuum
The metrics that are measured in this category show how much potential the service line has to contribute to growth in the future, as well as indicates the competitive position of the service line within the market. Under a value-based care system, providers are required to compete for the business of patients, and for a share of the population. This means that the more potential value a service line can bring to an organization within the value-based care system, the more emphasis should be placed on improving or maintaining the quality of that service line. This naturally lends itself to improving the healthcare
system overall as well.
These metrics determine the overall value of an entire episode of care. After evaluating the metrics in this category, healthcare organizations will learn that due to the value-based environment of healthcare they need to manage their patients across longer periods of time, while at the same time managing their longitudinal costs. Measuring the overall value of an entire episode of care will help the leaders of service lines identify which steps they can take to improve the management of transitions as well as reduce the costs of each episode of care.
The quality of service is valued above all else in the new value-based system, and as such providers must make sure that their service lines are the first choice for both the referring physicians and patients seeking care. The metrics measured under service quality will help healthcare providers learn what their opportunities are to best compete for and appeal to the physicians and patients that keep their organizations running. This again contributes to improving the overall landscape of healthcare as organizations are now competing to offer the best services to their patients and are not running any monopoly on less than stellar health care options.
In addition to the quality of service, evidence-based care is another metric category that is crucial for healthcare providers looking to thrive in a value-based care system. The reliability and quality of care the organizations can provide and the evidence of such are directly correlated to the financial success of these organizations. The performance of healthcare providers on clinical quality metrics will determine the general cost target levels and qualification for any bonus payment incentives offered through value-based care contracts as well.
Value-based care is happening, providers looking to thrive in the years ahead need to adjust their focus as they make the transition from old fee-for-service systems. There are four main categories of metrics that providers need to focus on in order to maximize their potential this new world. Evidence-based care, service quality, episode value, and share of the continuum are relevant categories to manage under value-based care. By focusing on these four categories, healthcare providers can rest assured that their bottom line will improve the quality of care they provide their patients. When providers adopt this value-based system, everybody from physicians to patients will benefit.