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Simplifying value-based care is paramount to a successful transition

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Article

While there are general steps that health care providers can take to ease the transition to value-based care and be prepared for the future, leadership and standards are imperative to making a full transition to value-based care work.

Meade Monger: ©CenturyGoal

Meade Monger: ©CenturyGoal

The US health care industry continues a predominant fee-for-service provider reimbursement model, despite trying to shift to a value-based care model for now approaching two decades. Moreover, providers continue to be consumed in a figurative avalanche of paperwork. It is a challenging system for both practitioners and patients, often delivering unpleasant experiences for both.

Ultimately, the goal is to provide value-based care as we continue a tortured transition from the traditional fee-for-service model to a comprehensive method of holistic treatment that has the potential of achieving the admirable goal of improving outcomes, enhancing life expectancy, while, at the same time, reducing costs.

Achieving this health care “Holy Grail” could be as simple as establishing a common set of standards that, at present, seems unattainable because of competing interests among the industry’s dominant players. The dynamics of our bifurcated health care system with no clear leadership came about as the industry experienced a piecemeal evolution over the past century to a multi-third-party payment structure that is generally divided into a market justice system and social justice system.

The Centers for Medicare & Medicaid Services (CMS) has stepped up in a leadership role to some extent, attempting to bring some organization to the chaos with a set of standards. Even its efforts fall well short of what is necessary to cure the nation’s wild west-like revenue cycle processes in the health care industry that comes with many different and constantly changing rules set by many different players. Moreover, transitioning to value-based care presents even more administrative work and reporting requirements for health care providers. The environment is in big need of agreed-upon standards that are followed as existing and new technology evolves, with a tightly controlled Artificial Intelligence (AI) system playing a larger role.

To meet the goals of value-based care and better-quality care at lower costs, health care providers must report on quality results of their patients along with the costs of treatment. This adds a whole new layer of requirements. However, it can result in eliminating a substantial portion of what is required under the fee-for-service models. The rub is making the transition and requiring health care providers to now double up their administrative efforts while accommodating both fee-for-service and value-based care models during the transition.

Health care providers already report spending nearly half their time on paperwork and administrative tasks. They’re forced to record every discussion they have with patients in their medical records for the sake of coding and billing. These records are then turned over to their office’s coders, who read the documentation and manually match the discussion to insurance billing codes before sending them off to the insurers for payment. If the doctors are lucky, these charges are accepted — but they’re regularly rejected by the insurers, forcing doctors to re-record, recode, and resubmit their claims.

It’s a headache-inducing process for doctors and a costly process for health care administrators. As a result, doctors are spending an exorbitant amount of time not on patient care but on paperwork — and it’s driving a clinician burnout crisis in our country. Nearly two-thirds of doctors report burnout, attributing it to the significant amount of time they’re forced to put into paperwork. It’s become a major administrative hurdle in our health care system.

A transition to value-based care is scary for health care providers and their back-office support teams, since they are required to undertake many more administrative tasks on top of a workload that has already resulted in exorbitant costs and severe burnout. And this is not even the worst part.

The other issue is that there are no clear standards for how value-based care physician reimbursement models should work. In the current fragmented value-based care environment, a transition requires multiple times the current workload for health care providers. This is because there are multiple different payment models and requirements for value-based care reimbursement. This complexity arises from the variety of payers, each of which often has its own set of rules, incentives, and metrics for evaluating and reimbursing care based on value rather than volume.

As examples, there are shared savings models, episode-based payments, capitation models that pay fixed amounts per patient, bundled payments that health care providers need to figure out how to allocate among each other, continuous care models such as through ACOs, and a variety of other different types of payment models. We cannot expect health care providers to accommodate all these payment models due to the unreasonable amounts of burdens and costs that are placed on their infrastructure and processes.

For value-based care, there are whole new sets of information that need to be captured, calculated, and transmitted coming from numerous data sources. The major concepts are the abilities to report on costs of care and quality of care. In other words, health care providers need to be able to demonstrate that they are making patients healthier and solving their medical issues at reasonably low costs. There are other critical information needs that health care providers must have to make this work, which in general is understanding costs of care and profitability.

Health care providers must understand the costs of care per patient and per type of patient to know how to make money in value-based care payment models. Otherwise, they may take on fixed-fee and contingent type arrangements that can result in costs exceeding their revenue and wiping them out.

There are general steps that health care providers can take to ease the transition to value-based care and be prepared for the future. Decision support systems can be implemented for efficiently managing patient care and maximizing quality through systematic workflows and assignment of care personnel. This helps to optimize quality outcomes cost effectively. These systems can also be used to track and report quality and costs.

However, leadership and standards are imperative to making a full transition to value-based care work. These are the critical elements that we are still waiting for.

Meade Monger is the CEO and founder of CenturyGoal.

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