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Analysis

Four Tips for Employer Direct Contracting

By Philip Betbeze  
   April 05, 2018

He continues: "Their task is to get out of this payment model that they have inherited, as we inherited physicians practicing in their own style. We had to understand the allure of defining best practice and executing on that. [Employers] have to get beyond this benefits mentality and into the purchasing model mentality."

Mecklenburg and Anderson have four tips for healthcare organizations that also want to get off that carousel.

1. Create a culture focused on quality and continuous improvement

Culture change is only possible by developing a long-term vision for your organization to deliver healthcare that is reliable, predictable, and has consistently good outcomes. There's no silver bullet, says Anderson.

"You have to start on the journey and create a culture that embraces climbing that hill," she says. "We have our Virginia Mason production system, and it's really how we empower everyone around for continuous improvement. The product it produces is a best practice pathway created by doctors for patients and employers. It requires a systems-based approach. It doesn't and won't come from federal regulations or health plans."

2. Believe that quality equals value

Part of Virginia Mason's strategic plan is to be the quality leader and to transform healthcare. Virginia Mason thinks quality can be expressed best in an equation as follows:

Quality = Appropriateness x (Outcomes + Service)
                                       Waste

"Appropriateness is the hidden secret," says Anderson. "There's a lot of waste because of inappropriate care."

For example, she says, Virginia Mason has demonstrated that nearly 58% of patients who have been referred to their organization for spinal fusion by an outside surgeon really do not need it.

Philip Betbeze is the senior leadership editor at HealthLeaders.


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