Succeeding on the journey to value-based care The journey to value-based care is a complicated one with varied aspects. Jonathan Niloff, MD, MBA, vice president and CMO, McKesson Technology Solutions, shares insights into what organizations need to succeed on the path to value-based care. He has more than 25 years of healthcare experience as a physician, medical director, professor, author and healthcare technology innovator. He was the founder and chief medical officer of MedVentive, which is now a part of McKesson. In his current role, he is responsible for, among other things, the strategic development of population health analytics and solutions.
We’ve been hearing about the major changes coming with the introduction of value-based care, yet statistics indicate that many organizations only have a toe in the water. Where does the industry stand right now and when can we expect the tipping point?
There is a lot of diversity of approach among both large and small organizations. Some have gone full scale into these types of arrangements and others are just dipping their toe in the water. Those who are going full scale understand the advantages of achieving organizational alignment around a single contracting model, as well as the efficiencies of scale with going uniformly toward a value-based approach. That said, for everyone there’s still more revenue in fee-for-service than in value-based reimbursement models today.
With respect to the tipping point, we’re likely to see it by 2020 or shortly thereafter. We’re already seeing the government and private payers preparing to transition the majority of their payments to value-based care by 2020. With mandatory bundled payments, the Next Generation ACO program and the MIPS program, we’re definitely seeing movement toward a tipping point.
That’s only four years away. What capabilities and resources need to be in place to succeed under these value-based care and risk-based contracts?
First and foremost is good leadership. The transformation to value-based care is not easy. It requires a lot of change management. To accomplish that, really good leadership is critical.
Second, success under value-based reimbursement is going to require organizational alignment around a new care model. This includes engaging physicians. If the physicians aren’t engaged and working toward the imperatives of the new care model, then the chances of success are very low.
Third, organizations will need to implement a variety of programs to be successful, including programs to identify and manage high-cost patients, manage transitions in care and prevent readmissions. They also will need programs to understand and manage utilization and quality, close gaps in care, and manage physician practice variation to help ensure everybody’s practicing in an optimal mode with respect to both quality and cost. And organizations will need to monitor their performance under risk contracts. All of that is going to require personnel with expertise in the nuts and bolts of value-based reimbursement programs and an understanding of the types of programs they need to put in place to be successful.
Finally, for organizations to be successful, they will need sophisticated information technology resources and personnel to manage those resources. Competencies such as clinical analytics and claims-based analytics are critical to manage value-based care contracts, yet many provider organizations don’t have much experience in analytics based on paid claims from health plans.
Let’s talk more about analytics. What’s needed to unlock health data for more informed decision-making?
The first requirement is the acquisition of diverse data across the continuum of care and then the aggregation and normalization of that data coupled with claims data in a data platform. With the incorporation of pre-adjudicated claims data and paid claims data, you have a complete picture of all of the care and utilization a patient has received, both inside and outside your network. And you need really robust normalization to make that data meaningful. You also need a robust set of data services so you can provide a single source of truth to support all the analytics across the organization and the different applications or solutions you’re using.
You also need sophisticated analytics to make sense of the data and get meaningful insights from it. The more you can make the analytics – and the delivery of the insights from the analytics – closer to real time, the more it will be valued. Also, as solutions become more sophisticated and can deliver prioritized insights to the most appropriate person at the right time, they will become more valuable and more useful.
The million-dollar question for value-based care really is: How can organizations succeed in both accelerating progress with quality and performance improvement initiatives while at the same time reducing costs and improving profitability?
The way to do that is by data-driven prioritization. Every organization has limitations with respect to bandwidth and resources and can only accomplish so many initiatives at any one time. Use your data to understand where your greatest opportunities are for both clinical health and financial health, and then appropriately resource teams – or partner with experts – to address those set priorities. Focus on actionable analyses to identify genuine opportunities for change and translate those results into best practices. Areas of focus should include identifying high-value opportunities for performance improvement that will drive sustainable change, including evaluating clinical performance and clinical quality measures, correlating outcomes and costs, modeling cost and revenue, and analyzing, modeling, and predicting outcomes. Lastly, to achieve success, incentives among all the constituents in the organization must be aligned and consistent with your priorities; otherwise, you could have competing or conflicting initiatives or incentives that potentially sabotage the fulfillment of those objectives.
About McKesson and McKesson Technology Solutions
As a division of America’s oldest and largest healthcare services company, McKesson Technology Solutions (MTS) plays an integral role by helping organizations across healthcare – hospitals, physicians, pharmacies and health plans – confidently manage their businesses today while focusing on the capabilities required for better clinical and financial health.
