How to Succeed at Fee-for-Service While Preparing for Value-based Payment


This blog post is from H&HN, the journal of the American Hospital Association and was written by Rita E. Numerof, Ph.D., president, Numerof & Associates, Inc., St. Louis.

Here are the concluding statements:

A number of recent developments have accelerated the need for predictable and transparent outcomes in health care delivery. These include financial penalties for "never events" and excessive readmissions, mandates for the public release of rates charged by hospitals, new policies and regulations such as health insurance exchanges, and tools to help consumers evaluate comparative cost and quality for the care they need.

For a particular service, organizations should be able to clearly define what's included and what's not included as well as to provide quality guarantees irrespective of where that service is offered along the continuum of care. Organizations that can effectively manage the cost and quality of care within the walls of their own institutions and form meaningful partnerships with like-minded external care providers will be well-positioned to achieve this goal.

Differentiation will come from more effective execution of "standard" protocols reflected in new outcome metrics as well as transparent economic and clinical value data. These data also can demonstrate a value story that will resonate with different key stakeholders. Patients will want to understand why the provider is better than the competition, and payers will want to see evidence of consistent outcomes and predictable costs. Institutions that do not provide such economic and clinical value data risk being omitted from consideration, and thus losing out on patients.

The path forward is clearer than many might want to admit. It is a difficult and strenuous journey — one that challenges traditional norms, requires new competencies and introduces fundamentals that haven't been the mainstay of health care delivery. The pay-off for those organizations that invest now will be significant, both in the short term and long term.



Additional Resources

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