The United States leads the rest of the world in multiple areas such as military spending and medical research. It also outspends other countries in healthcare, with a monetary output of almost twice as much as the average developed country.
According to the most recent numbers, healthcare spending in the U.S. is an astounding $4 trillion (about $11,582 per person) annually, an amount the Centers for Medicare and Medicaid Services (CMS) projects will soar to $6.2 trillion by 2028. Even with that astronomical number, the U.S. has a lower life expectancy and worse health outcomes than any other high-income nation.
To address this high spending, CMS in 2008 established a focus on transitioning from fee-for-service to value-based care. This focus on value as opposed to volume of services provided was designed to enhance both financial and clinical performance through incentives given to providers who meet specific quality and performance measures.
Drivers of value-based care
A key driver of the shift to value-based care was the emergence and proliferation of electronic health record (EHR) systems and numerous other technology tools. With these resources, providers are able to utilize advanced analytics to better measure and improve outcomes, improve care coordination, reduce risk and procure easier access to patient information for enhanced clinical decision-making.
Similarly, the interoperability achieved by connecting and integrating disparate healthcare IT systems enables providers to better collaborate with other clinicians, resulting in more focus on evidence-based medicine and a reduction in duplicate tests and procedures. All of these capabilities aid physicians in reducing the number of administrative tasks for which they’re responsible and help to reduce overall healthcare costs.
There’s no one specific process for providers to implement in order to transition to value-based care. In addition, not all healthcare entities have the resources necessary to make value-based care payments work smoothly. However, those that make the shift can realize multiple benefits, including better disease management, reduced hospital readmissions, and enhanced patient involvement in care.
Although the transition from FFS to a value-based payment model represents the largest shift in healthcare reimbursement in the past 40 years, there’s no exact science that allows providers to measure their progress to the new system. Fortunately, there are specific key performance indicators (KPIs) they can track to measure their performance and identify any areas of weakness that need to be improved to ensure their revenue cycle is optimized to the highest level possible.
KPIs are designed to help highlight and compare key quality improvement and value metrics and facilitate insight into providers’ clinical, operational, and financial performance through analysis of real-time data. They also enable providers to boost staff productivity, eliminate root causes for poor performance, increase patient satisfaction, and promote proactive decision-making. In order to be effective, though, they must be specific, achievable, measurable, actionable and relevant.
A group of 29 KPIs developed by industry leaders for the Healthcare Financial Management Association (HFMA) and considered an industry standard are the Measure, Apply, Perform (MAP) Keys. These enable providers to track revenue cycle performance using objective and consistent calculations. The MAP Keys consist of 5 primary categories: patient access, pre-billing, claims, account resolution and financial management.
Solutions for examining provider progress
A wide range of KPIs are employed by many providers, from costs by payer and patient safety to medical equipment utilization and patient wait time. Although these measures are useful in gauging many areas of a physician practice, they’re not as helpful in evaluating a provider’s progress in the realm of value-based care and payment. This is primarily because they don’t adequately capture the quality of care that’s vital to the success of patient-centered care.
A few of the top KPIs to track in order to assess progress in the value-based care system are readmission rate, patient-reported outcomes, and patient experience or engagement. Calculating these metrics lets providers not only gain insight into their specific performance but also compare it to pre-determined benchmarks.
Let’s take a look at each one:
#1) Readmission rate
It’s estimated that roughly two million patients are readmitted per year, costing Medicare $26 billion. CMS’ Readmissions Reduction Program (HRRP), section 3025 of the Affordable Care Act, was created to penalize hospitals with excessive readmission rates of patients within 30 days of their discharge. In addition to avoiding such penalties, hospitals should strive to decrease their readmissions to help cut costs and improve operational performance.
Providers with high readmission rates often suffer from procedural gaps in patient care, negatively affecting patient outcomes and producing expenses that aren’t necessary. Multiple studies have shown that hospitals can perform several activities to lower their rate of readmissions, including clarifying patient discharge instructions, coordinating with post-acute care providers and patients’ primary care physicians, and reducing medical complications during patients’ initial hospital stays.
Through the use of technology, providers can more accurately track their readmission rate. After identifying it as a KPI, the use of an EHR can help them identify patients at the highest risk for readmission, allocate resources accordingly, improve patient education and support multidisciplinary rounds. By gathering clinical data through their EHR on a regular basis, they can review data such as a patient’s length of stay, acuity, ER/ED visits and more to noticeably improve outcomes and reduce the occurrence of preventable readmissions.
Similarly, predictive analytics can be utilized to identify at-risk patients at time of admission and customize patient care to reduce cost-prohibitive readmissions. By using statistical techniques, including modeling and data mining, it enables providers to sift through large amounts of data, allowing them to gauge opportunities to improve quality and efficiency.
Also, when used correctly, predictive analytics can be utilized to assess the probability a readmission will occur along with how often and when it might occur. For example, patients with chronic health conditions have been found to have higher hospital readmission rates, a fact providers can take into account when analyzing their KPI for this area of patient care.
#2) Patient-reported outcomes
Patient-reported outcomes (PROs) demonstrate value and transparency to patients and examine whether a specific treatment improved a patient’s quality of life. The goal of measuring PROs and rewarding performance on the basis of PROs is to encourage clinicians and organizations to adopt procedures that improve outcomes experienced by patients.
PROs as a KPI are important because they:
- assist patients and their providers in making informed decisions about healthcare
- monitoring the progress of care
- setting policies for coverage and reimbursement of health services
- improving the quality of healthcare services
- tracking or reporting on the performance of healthcare delivery organizations
They’re comprised of clinical information reported directly by patients about their symptoms, performance status, distress and quality of life. They can be used to capture non-clinical information, including satisfaction with care, social determinants of health (SDOH), and financial toxicity.
In addition, patient-reported outcome measures (PROMs) lead to better shared decision-making and are a high priority for CMS. General health PROMs focus on a patient’s overall well-being, mental health and quality of life and are utilized to survey patients with almost any condition. Conversely, condition-specific PROMS target the symptoms of a specific disease or condition and examine a patient’s mobility, function, or level(s) of pain in certain areas of their body.
#3) Patient engagement
A KPI rising in popularity for many providers, patient engagement centers on providers and patients working together to improve health. Recent evidence shows that patient engagement is related to health-related outcomes and that patients barely engaged in their healthcare experienced costs 21% higher than those heavily involved.
Research has linked higher levels of patient engagement to the following advantages:
- greater use of preventive care
- less smoking and obesity
- less delay in seeking care
- more positive ratings of relationships with providers
- greater awareness of treatment guidelines
- better clinical indicators (e.g., cholesterol levels, triglycerides, depression)
- lower use of hospital and emergency care and lower hospital readmission rates
- lower overall predicted health care costs
For those providers who want to hasten their shift to value-based care, tracking patient engagement is essential. One way to do so is through the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey, an industry standard for examining patient satisfaction and experience. These surveys are tied to certain aspects of value-based reimbursement and offer valuable insight to providers.
Implementing technology solutions for patient engagement offers time savings for both patients and providers. Specifically, it leaves more time to focus on patient care and automates a multitude of administrative tasks, allowing staff to focus on other job duties. The result is improved patient satisfaction and a financially successful practice.
At Harmony Healthcare, we deliver expert consultants within reimbursement to providers of all sizes on a national basis and across all care settings.