The transition from Fee-For-Service (FFS) payments to Value-Based Care (VBC) in healthcare has paved the way for a pivotal role for quality improvement. VBC has created financial incentives for healthcare providers to both deliver high quality patient care by improving patient outcomes as well as lower the cost of care for patient populations. The healthcare industry has implemented VBC as a quality initiative in itself to improve the status of the healthcare delivery system.
2021’s Healthcare Quality Week, sponsored by the National Association of Healthcare Quality (NAHQ), was celebrated from October 17th to the 23rd and highlights the importance of healthcare quality in the healthcare delivery system. Quality initiatives have provided organizations an opportunity to make changes and have created an awareness of opportunities to produce and enhance workflows and systematic activities. Organizations have noticed the role that quality plays in the success of their operations and Healthcare Quality Week provides a time to celebrate the professionals that bring this valuable tool to the forefront. In this article, you will find an overview of how tenants of quality can assist organizations in creating revenue through value-based care.
What is Value-Based Care?
As described in Crossing the Quality Chasm from the Institute of Medicine, the American healthcare system is faced with challenges of delivering lower quality care at higher costs when compared to other countries. The United States spends more per capita on healthcare than any other country. The report also examined health system challenges that result in our lower quality of care.
The financial framework of value-based care encourages healthcare providers to implement strategies to provide quality care and reduce spending versus attempting to continually increase the volume of patients seen. The goal is to deliver care through a model that supports patients in achieving and maintaining wellness versus waiting to provide care when patients are acutely sick, which often require treatment services that are more complex and expensive than preventive ones. The VBC framework aims to hold healthcare entities responsible for this evolving paradigm.
Quality and Value-Based Payments
Operating under a VBC arrangement requires alignment between payers and providers. Payment arrangements include quality metrics that measure how well providers are improving quality care, reducing cost, and providing positive patient experiences. These metrics are a combination of outcome and process measures, and provider performance is typically measured against a national or regional benchmark.
An emphasis on quality is a principal component of value-based care payment models, and payers are increasingly moving toward a quality centric focus. Some models use quality metrics as criteria for incentive payments: Providers only receive incentives if they meet or exceed performance on specific quality indicators. In other models, quality metrics are used as gateways for shared savings arrangements: providers must meet performance benchmarks on quality metrics in order to be eligible for a certain percentage of realized savings over a performance year. Some payers check provider performance against each quality metric individually, though some are now agreeing to combine performance across several measures to create an overall quality score.
The Healthcare Effectiveness Data and Information Set (HEDIS), developed and maintained by the National Committee for Quality Assurance (NCQA), is one of healthcare’s most widely used sets of quality measures. HEDIS uses over 90 quality metrics to evaluate:
- Effectiveness of Care
- Access/Availability of Care
- Experience of Care
- Utilization and Risk Adjusted Utilization
- Health Plan Descriptive Information
- Measures Reported Using Electronic Clinical Data Systems.
FEE-FOR-SERVICE WITH A LINK TO QUALITY AND VALUE (HCP-LAN CATEGORY 2)
Payment models within this category use traditional payment structures for clinical services and also offer incentives based on improved care for clinical services demonstrated by providers reporting quality data, or how well providers perform on cost and quality metrics.
Pay-for-Reporting
Pay-For-Reporting programs give providers an opportunity to become familiar with quality metrics and coordinate resources for data collection. Because pay-for-reporting does not link payment to quality performance, this model will typically evolve into pay-for-performance models.
Pay for Performance
Quality metrics have been developed through evidenced-based research to assess how well providers are keeping patients healthy and reducing the exacerbation of health conditions. In a pay-for-performance system, payers compensate providers for meeting performance benchmarks on established measures that indicate specified levels of quality of care. Medicare, Medicaid Managed Care Organizations, and private insurers have all implemented pay-for-performance programs.
FEE-FOR-SERVICE ARCHITECTURE WITH SAVINGS (HCP-LAN CATEGORY 3)
The Fee-for-Service Architecture payment classification is based on cost and utilization performance against a target. This payment model is structured to encourage providers to deliver effective and efficient care.
Shared Savings
As stated previously, one of the primary challenges facing the healthcare infrastructure of the United States is the high cost of providing care. The idea behind shared savings arrangements is to incentive healthcare providers to effectively care for patients at a reduced cost while not negatively impacting the quality of care received by the patient. These types of arrangements often also require providers to successfully perform against pre-identified quality metrics. If a provider successfully meets their quality and spending targets, they could receive a portion of the resulting shared savings, or the difference between what the payer expects to spend and what the payer actually spends on care for the attributed patients covered by the arrangement.
Performing under a shared savings arrangement is not always easy to do on one’s own. While some healthcare providers contract directly with payers for these arrangements, others contract with payers as a group of providers, either through Accountable Care Organizations (ACOs) or Clinically Integrated Networks (CIN). An ACO or CIN groups together various healthcare delivery entities under one contract with a payer with a common goal to coordinate care for a population of patients. The entire group must meet the performance metric benchmarks and shared savings cost threshold. ACOs and CINs may contract with many different types of payers, including Medicare, Medicare Advantage, Medicaid, and commercial insurance entities.
POPULATION-BASED PAYMENTS (HCP-LAN CATEGORY 4)
Population health is the health status and outcomes of a defined group of individuals rather than considering the health of one individual at a time. Population health is a cornerstone of the Institute of Healthcare Improvement’s Quadruple Aim. The Quadruple Aim framework serves as the foundation for organizations and communities to successfully navigate the transition from a focus on health care to optimizing health for individuals and populations.
This HCP-LAN framework category involves prospective, population-based payments, structured in a manner that encourages providers to deliver well-coordinated, high-quality, person-centered care. Payments within this payment model can be used to cover a wide range of services to enhance preventive health, care coordination activities, and wellness services.
Payment for Care Management
This model involves payment from the payer to the provider for specified care management services. One example of this is care management fees, whereby the primary care provider receives a monthly per patient payment, known as a Per Member Per Month (PMPM) payment, in exchange for the delivery of care coordination services. These payments typically exist outside any FFS reimbursement for clinical services. Additionally, a provider’s performance on quality or financial metrics does not generally impact these payments.
Many Medicare patients qualify for Chronic Care Management (CCM) services. These services help patients manage their chronic conditions. More care management leads to better health and decreased overall health care costs.
Transitional Care Management is an additional method to achieve payment for care management services for the Medicare population. These services ensure patients connect to care after a discharge from a hospital or health care facility. Continuity of care providers a smooth transition for patients that improves care and helps prevent unnecessary readmission, thereby reducing costs.
Integrating Quality and Value-Based Care
The Agency for Healthcare Research and Quality (AHRQ) denotes six domains of healthcare quality from the Institute of Medicine. The purpose of these domains is to provide a framework for understanding quality within the broader range of quality indicators. All these domains are essential to success in value-based payment agreements.
EFFECTIVE
Clinical quality metrics can assist an organization in determining that evidence-based care provided by the healthcare organization has resulted in positive outcomes.
EFFICIENT
Efficient care relates to effective care. While the patient may have received an evidence-based clinical intervention, did the intervention result in the intended outcome? If not, how was it efficiently mitigated? Measuring and evaluating these interventions moves organizations to create process improvement techniques to follow up on outcomes of care.
TIMELY
Access to care for patients is important as healthcare providers aim to keep patients out of the emergency department and hospital. Improve timely access to providers can alleviate high utilization and readmission rates that can increase the cost of care for a patient.
SAFE
In tandem to providing effective care for patients, healthcare organizations need to ensure they incorporate models for patient safety into the daily practices. Avoiding patient safety events prevents negative outcomes for patients and avoid additional costs of care.
PATIENT-CENTERED
The key to value-based care success is a patient centric focus. Patients engaged with their care are more likely to comply with their treatment plan. The patient feels that the healthcare staff are invested in their well-being. Many value-based contracts have a component of the quality score that includes patient satisfaction rates. These rates could impair an optimal quality score that could have a direct effect on value-based reimbursement.
EQUITABLE
An important piece of healthcare equity is addressing social determinants of health (SDoH). There are varying approaches to addressing SDoH in value-based care models, but the concept remains consistent, meeting the needs of disparate populations while continually providing quality of care.
Strategies for Success
Providers of healthcare are tasked with establishing new organizational structures and are facing multiple challenges during the transition from volume-based care to value-based care. Albeit challenging, as previously discussed, value-based payments can provide an additional revenue source in addition to FFS payments. Here are some strategies you can use to drive the transition in your organization.
1. Assess and select a Value-Based Payment Model
Assess the readiness of your organization to implement value-based care by evaluating your patient population for risks and opportunities. Review your capabilities to provide care management services. Select the HCP-LAN payment category model that aligns with your organization’s capabilities. Prepare your organization by educating key stakeholders and aligning your strategic goals around the selected value-based model.
2. Develop your Quality Strategy
Develop a strategy that incorporates the Institute of Medicine’s six domains of quality. Any of these domains can be leveraged in value-based care payment agreements. Regardless of the domains selected for quality performance, delivering high-quality, patient-centered care will assure high quality outcomes.
3. Enhance Population Health activities
Identify your opportunities for improvement and design your care management model. Partner with your community healthcare organizations to drive efficient patient care through chronic care and transitional care management. Focus on methods to reduce cost. Evaluate your impact and continuously make improvements.
A Closing Thought…
Quality in healthcare focuses on providing the right service to the right patient at the right time. Doing so inevitably improves patient outcomes and lowers the cost of caring for patients. In improving your quality performance, you are also increasing your ability to succeed under VBC arrangements with payers. But quality takes work. This Healthcare Quality Week, I hope you and your team take the time to remember the benefits of having a quality culture and revisit (or create for the first time) your quality strategy.
