By Karen Matthias, MBA, RN, Vice President, Sales and Marketing
I had the opportunity to attend the HFMA National Institute in Las Vegas last month. HFMA is a membership organization for healthcare financial management executives and leaders. With more than 39,000 members, HFMA is recognized as a thought leader when it comes to top trends and issues facing healthcare finance. Much of the conversation at the conference trended toward discussions about the processes that hospitals and healthcare systems are putting into place to determine the value of the services they provide to patients. This relatively new shift toward value is likely to reshape healthcare in the United States.
One of the cutting-edge sessions I attended featured a panel of speakers who discussed “Transitioning to Value-Based Care: A Case Study from the Cleveland Clinic.” Michael McMillan, Executive Director, Market and Network Services, Cleveland Clinic; Jim Landman, HFMA Director, Thought Leadership Initiatives; and Katie Keystone, McManis Consulting, Senior Consultant discussed the commitment among hospitals to pursue value-based payment methodologies over the next 3 to 5 years. The key point that these experts made was that value-based payment is not—and should not—be the main goal. Care-delivery transformation is the intended result, with an emphasis on outcome measures that include taking a look at the patient’s functional status, for example, how quickly they return to work.
What’s your approach to defining value? The panelists recommended a simple equation:
VALUE = Outcomes/Cost
Outcomes include the quality of the services provided, combined with the patient’s functional status and the patient experience. Costs can be calculated by adding inpatient costs, postdischarge costs, and any ongoing costs associated with the patient’s condition. By dividing outcomes by costs, we can get a sense of the value of the healthcare service being provided.
Defining value might be simple for patients without complex or chronic healthcare issues that are easily treated and resolved. For complex patients who utilize a lot of healthcare resources, providing value-based care becomes a challenge. Getting and keeping these patients healthy may involve a reassessment of how we deliver care, and the Cleveland Clinic is doing just that by exploring ways to work directly with employers to provide services that address the needs of these complex patients. That’s really out-of-the-box thinking that wouldn’t have been considered a decade ago. Today, with hospitals faced with capitated contracts, pay-for-performance incentives, and quality and patient satisfaction being factored into Medicare reimbursement, we need to find creative ways to transform how we deliver healthcare.
Is your hospital a value-oriented institution? What value metrics are you using to cultivate and communicate value among your stakeholders?