Healthcare News & Insights

3 strategies: How CEOs can shift to value-based care

453886289There’s new help for hospital CEOs trying to effectively transition to a value-based payment model that’s quickly becoming the industry norm — and the help comes from other CEOs. 

In a recent report from the President’s Council of Advisors on Science and Technology, researchers called on payors to speed up the transition to value-based payments so the healthcare industry could implement systems-engineering principles to boost care efficiency, productivity and quality.

Soon payments will primarily, if not exclusively, be made based on the value of the care provided, rather than the fee-for-service model that has previously dominated the industry.

Well on the way to value-based

In fact, many payors and providers are already on track to switch to value-based reimbursements, according to FierceHealthPayer.

A study conducted by the Office for Civil Rights (OCR) examined 464 payors and hospitals, and found that a majority of both are using a dual system of value-based and FFS reimbursements. Currently, 64% of payors and 62% of providers said they were on track with the value-based transition. And both groups see FFS reimbursements declining more than 20% over the next five years.

The researchers’ data shows that implementing value-based payments is mostly dependent on the region. Areas that had multiple payors and hospitals collaborating together were more likely to follow a predominantly value-based payment model. Along those same lines, accountable care organizations had a close alignment with value-based payment models.

Unfortunately, many facilities are still struggling to transition to an exclusively value-based model. The study found that 12% of payors and 22% of providers are having difficulty implementing a pay-for-performance model.

CEO-to-CEO advice

Many providers still worry about how their financial situations will develop due to wide-spread value-based reimbursements. As FierceHealthcare reports, with a slew of federal funding cuts, reimbursement difficulties with Medicare and Medicaid. and declining inpatient services, providers are concerned about the transition hurting their bottomline even more.

Thankfully, Huron Healthcare’s CEO Forum has compiled strategies from over a 100 health systems, hospital CEOs and physicians to help others transition smoothly.

The forum’s report outlines a three-pronged strategy and then features different CEOs giving their take on how they’ve implemented those steps at their facilities.

The main strategy concepts of the report are:

  • Evolve. In particular, look at how your hospital will drive revenue. Hospitals won’t be able to rely on inpatient services now that the main focus of the industry will be to provide high-quality care that reduces readmissions and subsequently reduces spending. CEOs will have to find new alternative revenue streams. They should consider providing nutrition and wellness centers, telemedicine services, mail order pharmaceuticals and retail and employer-based clinics or partnerships.
  • Integrate. Many healthcare professionals see clinical integration as key to succeeding in the world of value-based payments. As a result, CEOs will have to consider physician alignment strategies to help provide and manage care outside the hospital setting, and
  • Lead. Helping your facility transition to a value-based system won’t be an overnight task. That’s why having  solid succession, retention and leadership development programs in place will be key to making sure facility is prepared for industry changes in the future. Take time to plan what kind of leadership you want down the road. Some facilities are opting for leaders with strong financial backgrounds, while others prefer to promote medical staff who already understand the goals and issues your facility has.

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