Healthcare Musings May 2013

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Value-based Purchasing: What Hospitals and Health Systems Need to Know Now to Manage Their Medicare Dollars
by Jyoti Kamal

May 2013 - Value-based Purchasing (VBP), an outcome of health reform, mandates that eligible hospitals of all sizes have portions of their Medicare reimbursements withheld based on how they score on 20 key performance measures. Hospitals are given the opportunity to earn back the withheld reimbursements by improving their scores. There is even an opportunity to earn back more than what was withheld if the hospitals score higher than expected on certain metrics.

The purpose of the program obviously is to incentivize hospitals to preserve their reimbursements while also ensuring that the quality of care is optimized to meet the expected standards. It’s important for administrators to track the scores of their hospitals so they can build a strategy to recover the withheld amount while at the same time take advantage of VBP’s incentive component to secure additional dollars that might be available to the highest performers. Here are two things that can substantially help with those objectives:

1. Organizational commitment. It takes commitment to get the entire organization involved in the process of improving the 20 key performance measures. Everyone, from housekeeping to physicians and administrators, needs to understand that they can help the hospital perform at the highest level. How they deliver care and perform their duties has a direct impact on overall scores. It is important that the organization convey that everyone stands to gain by improving his or her own individual performance. A culture that fosters positive reinforcement and continuous improvement will go a long way in positively impacting VBP performance.

2. New data analytics solution. At many hospitals and health systems, information is manipulated manually using spreadsheets that contain data pulled from disparate sources and departments. At the same time, leadership and others responsible for performance work to determine how they can quickly and efficiently organize this disparate data to help them understand where the hospital stands. There are data analytics solutions available that can empower hospitals to stay on top of their scores and performance numbers in a timelier manner. An example is a Value-based Purchasing application to track, monitor and plan for scores and outcomes. This puts administrators in the best position to identify areas for improvement so they can proactively improve upon measures and possibly secure more VBP dollars.

When considering the 20 performance measures, it is important to note that a strong emphasis is placed on patient satisfaction. That means numerous subjective factors can come into play. For example, how a physician or nurse communicates with a patient can have a direct impact on the patient’s satisfaction level. How housekeeping does its job can influence patient opinions as to their overall hospital experience. As a result, more outlying influencers now can have an impact on the Medicare dollars that a hospital receives.

Having the ability to monitor patient satisfaction and core measure metrics and trends is more mission critical than ever. With this new program, hospitals need to gain a greater understanding of their VBP data to gauge where they stand, in part so they can plan for financial impacts, but also so they can gain insights and knowledge to put improvement plans in place to boost scores. Without the ability to understand and evaluate VBP measures, hospitals essentially are flying blind. It is one thing to know where you are performing poorly, and another to know why and what can be done to fix it. If a hospital sees a trend where patients are giving low scores for physician communication, the organization can put a plan together to enhance patient and physician communication.

Some things to look for when considering a VBP application include: enterprise scale to get a full view of all metrics; pre-built features that eliminate the need for manual data collection; and a SaaS architecture to enhance accessibility and ease of use. Other desirable features include a summary view, an estimated withholdings calculator, and “what if” modeling capabilities.

VBP is creating a new paradigm for healthcare administrators and executives, putting greater pressure on them to meet the challenges that directly impact their bottom lines. By harnessing organizational data in an efficient manner, they will be positioned to use actionable knowledge to make important and well-informed decisions that can affect patient satisfaction and quality of care, thereby managing VBP withheld dollars.

About the Author

Jyoti Kamal, PH.D. is President and Chief Data Scientist of Health Care DataWorks, Inc., where she is one of the visionaries behind the technology that became the foundation for Health Care DataWorks KnowledgeEdge™. She is a foremost expert in healthcare analytics and speaker on all aspects of an Enterprise Data Warehouse.

For more information on Health Care DataWorks please call 1-877-979-HCDW (4239) or send us an email at info@hcdataworks.com or visit www.hcdataworks.com

 

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