What Is the Role of Value Analysis in Bundled Payment Success?

medicare money_1200.jpgLast week, I had the distinct privilege of presenting the keynote at the first annual Northeast Regional Conference of the Association of Healthcare Value Analysis Professionals (AHVAP). With the ever-increasing push away from fee-for-service and toward value-based healthcare, I thought it pertinent to discuss the role of value analysis in the success of a health system’s bundled payment initiatives. Specifically, I wanted to highlight the role evidence can play in assisting value analysis professionals in their evidence-based decision making, as well as how it can help them define the part they play in the value-based purchasing environment.

“The U.S. spends two-and-a-half times more than the OECD average on healthcare. Additionally, at 17.6% of the GDP in 2010, U.S. health spending is one-and-a-half times as much as any other country and nearly twice the OECD average.”

U.S. Healthcare Spend

burning money_1200.jpgTo provide some context, a comparison of U.S. healthcare spend compared to other developed countries was examined. Of the 35 Organisation for Economic Co-operation and Development (OECD) countries, the U.S. spends two-and-a-half times more than the OECD average on healthcare. Additionally, at 17.6% of the GDP in 2010, U.S. health spending is one-and-a-half times as much as any other country and nearly twice the OECD average. The U.S also leads in costs of procedures, categories of care, and volume of procedures performed.

These are staggering and, frankly, alarming numbers that, without some type of intervention, are unsustainable. There are a number of drivers contributing to these excessive costs, which include, but are not limited to:

  • Excess and medically unnecessary use of healthcare products
  • Financial incentives that reward overutilization
  • Clinical variation and inefficiencies
  • Opinion and preference-based healthcare decisions

 

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Value-Based Purchasing

Value-based purchasing models were implemented as an attempt to prevent healthcare spending from spiraling out of control. They are defined as “financial incentives that aim to improve clinical quality and outcomes for patients, while simultaneously containing (or better yet) reducing healthcare costs.” Some of these models include:

  • Shared savings with ACOs
  • Pay-for-performance (P4P)
  • Bundled payments

“By utilizing unbiased evidence assessments, such as those provided by Hayes, they can improve physician and clinical committee buy-in to carefully select products and procedures that will not only reduce spend but improve patient outcomes, bringing them closer to achieving the elusive Triple Aim.”

Value Analysis and Evidence

med necessity_1200.jpgTake a look again at those selected healthcare cost drivers. Do you notice any commonalities there? Each one of them can be influenced by value analysis professionals. And that influence can be significantly enhanced by incorporating unbiased evidence into their process. Medical necessity, overutilization, clinical variation, and preference-based decisions are all within the scope of a value analysis professional’s ability to affect. By utilizing unbiased evidence assessments, such as those provided by Hayes, they can improve physician and clinical committee buy-in to carefully select products and procedures that will not only reduce spend but improve patient outcomes, bringing them closer to achieving the elusive Triple Aim.

More to Come

As part of our participation in the conference, we sent out a survey to AHVAP members to help us more clearly see how their roles in bundled payments are currently defined. We also were fortunate enough to have an attendee provide us with (and co-present) a case study regarding how one of her value analysis initiatives related to clinical variation resulted in a savings of almost 2 million dollars for her health system.

In the coming weeks and months, we’ll be releasing a few publications around this topic. Check back here regularly for updates!

In the meantime, download our FREE eBook, Making Healthcare Technology Decisions with Limited Evidence. In it, you’ll find the 10 questions you and your health system need to ask when making challenging technology acquisition decisions. We also examine how to make those decisions in the presence of marketing hype, physician preferences, and financial considerations.

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Topics: Health Technologies, Hospitals, Hayes Blog