Healthcare financial leaders and clinicians have traditionally worked in their own silos, running into each other occasionally but rarely seeing eye-to-eye. Yet they now must work together to achieve the goals set forth in the federal value-based purchasing rule.
Currently, VBP rules hold healthcare organizations accountable for 12 process of care measures and HCAHPS. Next year, however, mortality rates and hospital-acquired-conditions will be added to the mix. To meet both the medical and financial imperatives of VBP, financial leaders will need to go beyond their usual scope. Look through the eyes of the clinicians to improve patient care and prevent reimbursement losses.
"Most CFOs are concerned with the negative consequences of VBP, because if you don't comply you get a reduction in reimbursements," says Bruce L. Van Cleave, MD, senior vice president and chief medical officer at Aurora Health Care in Milwaukee. "But, on the medical side we need to concentrate on patient safety and high quality care. If we aren't careful, when we [each] talk about value-based purchasing we could be having two very different conversations," says Van Cleave, who is also the former president and CEO for Carondelet Health in Kansas City and a board-certified family practice physician.
Van Cleave's clinical and administrative background helps him see VBP from both vantages. Taking a broader perspective can help financial leaders prevent VBP reimbursement losses.
"I wish the ongoing conversation we were having [with financial leaders] was, 'How do we use this to re-look at our strategies around care delivery?'" he says. "And that we'd broaden the discussion away from, 'How can we maximize our reimbursements?'"
Van Cleave believes that if healthcare leaders concentrate on understanding the intent of the VBP law, they will find the answers to their reimbursement concerns.
"Think about why the government wants us to do this. What outcomes are they really trying to get at? Certainly one outcome is to control cost, but it's not all of it. … What impact will this have on how healthcare will be practiced in the U.S.? And, how can we link our outcomes and our finances so they are strategically aligned?" he asks.
Van Cleave points to length of stay as an example of how different goals for the financial and clinical staff can influence one another.
"Clinicians need to have enough time to complete the [patient] education cycle, to monitor the illness, and to get the patient tuned up to a higher level before discharge. If it's rushed, there's risk. What we need [from CFOs] are the right tools for an efficient process so patients get the right education and care. We need to set standards so when the patient reaches certain milestones we can help them make the transition to home," he says.
Financial leaders have focused on LOS since 1983. That's when Medicare introduced the prospective payment system and announced it was going to pay hospitals a flat fee to cover costs based on an expected LOS. CFOs reasoned that if their hospitals could shorten patients' LOS, the result would be greater margins. They encouraged doctors to discharge patients as soon as they no longer required an acute level of care.
What has been the outcome of this effort? Providers have managed to shorten LOS, but at the cost of 30-day readmission rates. In 2010, Medicare released a study of heart-failure patients showing that between 1993 and 2006, mean LOS decreased from 8.81 days to 6.33 days. In-hospital mortality decreased from 8.5% to 4.3% during the same period, and 30-day mortality decreased from 12.8% to 10.7%. But 30-day readmission rates (which are not part of the VBP measures) increased from 17.2% to 20.1%.
Just as your clinicians' actions influence patient outcomes and reimbursements, so too do the actions of financial leaders. You may know how VBP will influence your organization's bottom line, but have you asked clinical leaders how to improve your metrics? By understanding the clinician's perspective, CFOs may get a clearer picture on how to hit VBP measures and improve HCAHPS scores.
Complying with VBP is going to challenge organizations for the next few years. It puts 1% of Medicare payments for hospitals and health systems at risk in the first year, and that percentage will grow as the measures grow. Nevertheless, it really is possible to win with VBP.
But doing so, Van Cleave observes, requires that "everyone has to pull in the same direction and be very clear about the goal and the numbers to succeed."
Karen Minich-Pourshadi is a Senior Editor with HealthLeaders Media.
