As the healthcare system transitions form a fee-for-service model to a value-based model, early adopters say financial incentives are not a panacea.
As part of the changing landscape that is the healthcare system, the transition from volume to value-based systems is becoming a more common theme. A recent survey by Zolo Healthcare Solutions indicates that strong organizational leadership and meaningful incentive pay are the key ingredients to a successful transition.
Jeffrey Galles, MD, chief medical officer of Utica Park Clinic in Tulsa, OK, where a one-year pilot program generated more than $840,000 in additional billable revenue, agrees with the survey results—especially the part about incentives. But he also offers a caveat.
“Financial incentives are imperative to making [transition from a volume to a value-based system] work,” Galles says. “But they’re not the only thing. Sharing data with our providers has been a stronger driver of behavior change than financial incentives.”
Dipping Toes in the Water
The Utica Park Clinic is part of the Hillcrest Health System, and is one of 16 US healthcare organizations nationwide participating in a 4-year demonstration project funded by the Centers for Medicare and Medicaid Services, and in conjunction with TransforMED, VHA, Inc., and Phytel. The goal is to improve the cost and quality of patient care by redesigning primary care while building patient-centered medical neighborhoods.
“The key first step for us was to somehow aggregate data,” Galles recalls. “The problem within most electronic medical systems, and for sure with our first electronic medical record system, is that they’re not designed for population health management. They’re designed to bill and to chart. So, from our perspective, our first step was really to identify a partner who could help us consolidate data and help utilize the data that we need to drive population health within the group.”
The next step was identifying where the opportunities to use the data were that would not destroy demand on the hospital side, but would increase the revenue on the provider side. Partnering with Phytel, a provider of population health technology, gave Utica Park the tool it needed to integrate existing data into its electronic medical records.
“We were able to drive new volumes into the practices, and drive new revenues into the practice,” Galles says.
That’s an understatement. The clinic was able to initiate a total of 291,426 patient communications, successfully reminding patients of 140,000 appointments, informing 65,000 of a care gap, and spurring 6,800 to interact with Utica Park providers. The effort yielded a 14:1 return on investment.
Not an Easy Transition
Success aside, Galles explains that the transition from a standard fee-for-service model to a value-based healthcare system was a phenomenally difficult challenge. The easy money in medicine, he says, has already been made. To make further inroads, it’s imperative to have systems in place that enable organizations to provide healthcare efficiently. The challenge is that healthcare organizations are not used to having those systems in place. They’re used to working on a very lean model of healthcare delivery. And all these systems that are required to help support value-based care cost money and require additional human resources.
“I think one of the struggles we’ve had is how you make that transition to a more labor-intensive workforce to provide the services with value-based care in a model where we’re still really, for the most part, being paid exclusively on fee-for-service,” Galles says. “And I think that’s been the real challenge.”
The other component, he says, is the challenge to the healthcare provider. He acknowledges that most providers are conscientious and want to provide good, quality care, but they’re also used to working in a system where revenue is driven by volume. With value-based care systems, physicians are being asked to go back and think a little bit about something beyond volume to drive care.
“Quality is kind of a natural offshoot of our consciousness and how we’re trained to practice; but when push comes to shove, it’s not uncommon that, you know, volume is the king,” Galles says. “And that transition for providers has really been a struggle.”
When, Not If
Galles says the transition to value-based healthcare is inevitable. He explains that CMS, the largest payer of healthcare services in the world, has announced the move to a value-based healthcare system. What healthcare providers are waiting for is the drivers that will push them in that direction.
“We’re beginning to feel some of the pressure from those drivers,” he says. “And as that pressure begins to mount on the hospitals and the providers, we understand that we’ve got to move in that direction. The only question we’re asking is how fast do we move in that direction? Because we sure don’t want to undermine our current model by moving too fast. So, it’s really just a matter of timing.”