Using Data to Navigate the Value-Based Care Journey

by George Dealy | Nov 13, 2018 | Healthcare

Reading Time: 7 minutes

Lately, I have been thinking about the transition to value-based care in terms of a journey and envisioning an automobile dashboard as a means for presenting the most relevant information from perspectives that change throughout the trip. For example, a vehicle dashboard equipped with GPS can give “turn-by-turn” navigation while also measuring overall progress toward the destination. It can also provide the driver with visibility into different collections of helpful measures at a glance, and assist the driver in optimizing the trip plan based on priorities such as taking a scenic route versus the fastest one.

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Similarly, analytics – done well – can give healthcare organizations visibility into their incremental (“turn-by-turn”) steps toward value-based care, exposing opportunities for course corrections while also showing how each step fits into the broader context of the entire journey. Here’s how.

Providers’ increasing risk

Moving from the fee-for-service model to quality-based contracts brings increasing degrees of risk for providers. The journey will not go well without both a plan and feedback on how well the plan is working along the way. Navigating step-by-step will require closely tracking operational metrics reflecting revenue cycle efficiency and performance on quality measures, for instance. Healthcare organizations will increasingly find they need to put the systems and tools in place to maintain visibility into performance across clinical, financial, and operational dimensions. Adaptable dashboards provide a useful means for assimilating this information – similar to how a dashboard guides a driver.

Monitoring the revenue mix

In the transition to value-based care, healthcare organizations will want to keep a close eye on their balance of revenue mix, contract types, and risk exposure. For now, revenue from traditional fee-for-service sources still mostly pays the bills, so it is tempting for organizations to focus almost exclusively on revenue cycle management.

But that perspective will need to shift as providers migrate more of their business to risk-bearing contracts. These come in a variety of shapes and sizes. On the riskiest end of the spectrum is full capitation, in which healthcare organizations receive a monthly payment to provide all the care for an enrolled, or specifically defined, population. Less risky arrangements include bundled payments for conditions such as joint replacements, Medicare-shared savings programs (ACOs), and payer contracts with bonuses and/or penalties that are based on quality and outcome measures, such as compliance with evidence-based practices, readmissions, and patient satisfaction.

Although organizations may not necessarily monitor their revenue mix every day, a well-defined set of KPIs can help leaders understand performance parameters that contribute to the big picture, such as the efficiency and effectiveness of revenue cycle management or the degree of savings – or loss – in a shared savings arrangement.

Bundled payments

One example of a fairly well-defined form of risk is bundled payments. In a bundled payments contract, a single provider organization typically assumes the risk for an entire care episode associated with a specific condition or procedure. However, other constituents in the healthcare value chain will influence the cost and quality of an episode. The Medicare Comprehensive Joint Replacement Program is one of the most prominent examples of this type of arrangement. Consider a hip replacement. The procedure might take place in a hospital, but much of the care – and associated cost – of the 90-day episode period comes after the patient is discharged from the hospital. Skilled nursing facilities, rehabilitation, physical therapy, and ongoing primary and secondary care all play a role.

Multiple parties in the health value chain don’t share just the care and costs. They also share responsibility for the quality of the episode, gauged both by quantitative measures and the more subjective measure of a patient’s perception of their experience and quality of life afterwards. However, success with this type of contract requires the responsible provider – the one most at risk – to effectively manage the episode across the value chain.

It is challenging to measure everything that has a bearing on the cost and quality of an episode. It’s especially difficult to do in real time, when the data is coming from so many different sources. However, healthcare providers can move in the right direction by assembling the information as soon as it is available. Visibility into what has happened can provide insights into how strategies are working and opportunities to improve processes, communication, and coordination throughout the value chain. Incremental changes guided by continual feedback can ultimately lead to significant progress. It’s certainly better than trying to guess your way through the process.

Optimizing the journey

Now let’s get back to the dashboard metaphor. In a vehicle, the primary indicators (speedometer, fuel gauge, GPS) are displayed most prominently. Other gauges of secondary importance (engine speed, temperature) are less eye-catching. Then there are indicators (oil pressure, tire inflation) that only appear when there is a concern. Ultimately, all of the measurements are important, but the dashboard’s design keeps the focus on what is most important at any given moment. This is the goal for healthcare feedback systems that support value-based care as well – helping to optimize a journey around multiple variables and priorities. On a car trip, is it important to arrive quickly? To enjoy a scenic route? To minimize costs through fuel-efficiency? And consider risk: if you must be on time for a job interview, you are unlikely to gamble on the unknowns of a scenic route. Each of these has a counterpart in navigating the value-based care journey.

One key difference: Unlike a traditional car dashboard, which is for the most part constant for the life of the vehicle, dashboards for healthcare organizations need to be agile and adaptable – changing continually throughout the journey. Fortunately, today’s most progressive software systems provide opportunities for continuous reconfiguration – shifting perspectives to reflect and emphasize evolving priorities and generate the most useful insights in a quickly changing landscape.

Adaptability

This adaptability is incredibly important, since some of the impacts of value-based care initiatives will only become apparent over time. Priorities will evolve and new opportunities will be revealed. For example, the effect of bundled payments is likely to become more significant as they become a greater part of the revenue mix. As the share of risk-based contracts increases, it will require more vigilance and therefore greater visibility of the associated metrics on dashboards.

Deciding what data is the most important – and what should be displayed most prominently – in a given time and context will require thoughtful and deliberate decisions, especially as improvements in interoperability make more and more data accessible. Avoiding data overload may be one of the most important contributions dashboard systems can offer as they can focus attention on what’s most critical even in the midst of overwhelming volumes of data. The most important data to emphasize will undoubtedly change during different phases of the journey toward value-based care. One thing that will not change? The importance of delivering this visibility in a useful context. Data will only produce value if it is presented to the right people in meaningful ways, and they ultimately use it to make more informed decisions that lead to better outcomes.