The constant thread weaving through every healthcare organizational strategy should be adherence to the Triple Aim. But with uncertainty generated by the changes at the federal level, healthcare organizations may be tempted to put their value-based care plans on hold. This article explains why that’s not necessary and lists six strategies for thriving under a fee-for-value model: 1.) Use Leadership and Team Structure to Support Improvement 2.) Drive Down Costs 3.) Reduce Unnecessary Waste 4.) Encourage the Learning Organization 5.) Prioritize Patient Education 6.) Track Data and Outcomes This blog cites one small medical center with odds stacked against it, and how it is managing to not only weather the changes, but also distinguish itself by staying true to the values of the Triple Aim.

1. Against the Odds:
How this Small Community Hospital Used Six Strategies
to Succeed in Value-Based Care

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The Future of U.S. Healthcare
What will
Trumpcare
look like?
Many Healthcare Professionals are Thinking

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The Future of U.S. Healthcare
For any healthcare organization that has
paused in building its value-based platform
because of uncertainty in the administration,
it might help to know that it doesn’t matter
who the president is.
Hospitals need to keep their sights on the
Triple Aim—providing topnotch care,
controlling costs, and improving outcomes—
regardless of who’s in the White House or
controlling Congress.
Despite the odds against it, one small
medical system in the rural south is
excelling in the transition.

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Shifting from Fee-for-Service to Fee-for-Value
It can be said that value-based care puts
hospitals in the business of intentionally
losing business.
Improving quality and reducing costs
should lead to greater efficiency of care,
preventing readmissions, and generally
keeping populations of people healthy
and out of the hospital.
This is great for the health of patients; not
so much for the health of healthcare. But it
can be a win-win situation for all involved.

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Shifting from Fee-for-Service to Fee-for-Value
As fee-for-value (FFV) quality and cost
control incentives are incrementally layered
on top of fee-for-service (FFS) incentives,
hospitals need to fill the inevitable volume
and revenue gaps.
The challenge is how to do so when
volume alone is no longer grounds
enough for reimbursement.
Healthcare delivery systems must now
think about how to thrive in both FFS
and FFV worlds.

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Shifting from Fee-for-Service to Fee-for-Value
Working with Payers
Payers steer their customers to top-
performing hospitals.
Top-performing hospitals are those
that have created a culture of improve-
ment by minimizing waste, reducing
costs, improving outcomes, and
figuring out how to sustain the gains.
But assuming payers will automatically
take notice of these achievements could
be a mistake. It requires active pursuit of
every opportunity to partner with them.

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Shifting from Fee-for-Service to Fee-for-Value
Working with Payers
Many hospitals recognize that, although they
have expertise in many areas, negotiating
with payers may not be one of them.
Some healthcare organizations have the
internal structure necessary to support
this work, but many third-party companies
provide strategic services around the FFS
to FFV transition and how to engage payers.
Either way, the key is to be prepared.

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Six Strategies that Lead to FFV Success
Hospitals and healthcare systems of every
size, in every geographic region, and in every
socioeconomic setting can successfully
transition from FFS to FFV despite significant
government changes.
One relatively small medical center has
made great strides in this transition.
This hospital has been eager to move into
the value-based market even though,
because of its small size, one bad outcome
in a risk-based contract could be financially
disastrous.

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Six Strategies that Lead to FFV Success
Here are six fundamental strategies that have
contributed to this hospital’s current success:
1) Use Leadership and Team Structure to
Support Improvement
2) Drive Down Costs
3) Reduce Unnecessary Waste
4) Encourage the Learning Organization
5) Prioritize Patient Education
6) Track Data and Outcomes

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Six Strategies that Lead to FFV Success
1) Use Leadership and Team Structure to Support Improvement
Hospital leadership, especially C-level
executives and the board, understand
and support the need to be proactive in
changing the way medicine is practiced.
They understand how to be profitable in
a FFV world while continuing to invest in
the best technology, recruit the best
physicians, and raise the quality of care
to best standards.

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Six Strategies that Lead to FFV Success
1) Use Leadership and Team Structure to Support Improvement
Leadership is aligned and the team structures
are in place to support improvement and the
shift to FFV.
There is a clear mission and vision from the
very top that’s effectively communicated
throughout the system.
The message is clear about where the
organization is going and leadership
expects everyone associated with the
organization to be aligned with the message.

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Six Strategies that Lead to FFV Success
2) Drive Down Costs
Any healthcare system on a journey of
care transformation needs to reduce costs.
This hospital has a cost accounting system
to support improvement and give visibility
into where the money is going.
It had practiced Lean and Six Sigma for a
long time, but now addresses other areas,
like waste and variation in the way
physicians practice, as well as materials
management and physician ordering of
preference items.

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Six Strategies that Lead to FFV Success
2) Drive Down Costs
The hospital uses a financial management
explorer application to see the materials used
in the OR by physicians.
It gathers surgeons and OR nurses to talk
about which items are not being used so they
can standardize surgical kits.
For example, one orthopedic surgeon was
ordering a higher cost implant from a more
expensive, unapproved vendor.
The application exposed the higher cost the
surgeon was paying for the same implant.

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Six Strategies that Lead to FFV Success
3) Reduce Unnecessary Waste
In the process of improving quality and patient
satisfaction as part of meeting the Triple Aim,
the care transformation team discovered that
the hospital was performing biopsies on 100
percent of C-section deliveries.
This was in the bylaws of the hospital so
it couldn’t just be stopped, but by bringing
it to light, it was able to change the bylaws.
Now the pathology is performed only if
maternal indication is present and the
hospital saves $40,000 in costs every year.

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Six Strategies that Lead to FFV Success
4) Encourage the Learning Organization
This hospital is a learning organization – it
shares knowledge.
If someone is performing a particular
surgery well, then it’s shared throughout
the organization through lunch-and-learn
and town-hall type meetings, and the
medical executive committee.
The administration has created the
structure to automatically share
knowledge among clinicians.

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Six Strategies that Lead to FFV Success
4) Encourage the Learning Organization
One improvement project was around reducing
costs in anesthesia. During joint replacement
surgery, the hospital went from using general
anesthesia to using spinal anesthesia.
The cost of spinal anesthesia is less expensive,
so this reduces costs and improves patient
experience and outcomes.
This was shared with the care transformation
group to see where else it could be applied. It
proved the hospital could use data for learning—
not punitive purposes.

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Six Strategies that Lead to FFV Success
5) Prioritize Patient Education
Payers pay attention to patient satisfaction
scores and won’t steer volume toward a
hospital if scores are low.
Through surveys, patients gave feedback
to this hospital that they were not being
educated well enough about what to
expect during and after surgery.

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Six Strategies that Lead to FFV Success
5) Prioritize Patient Education
In response to this feedback, the hospital
created patient education packets and
added classes, and some procedures now
require patients to attend a pre-surgery or
post-op class with their caregivers.
Patients feel more educated about their
procedures, which has reduced LOS and
improved patient experience scores.

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Six Strategies that Lead to FFV Success
6) Track Data and Outcomes
The patient satisfaction scores are
visualized in a tool so clinicians can see
how they are doing.
There’s a tool around each of the care
transformation groups.
Part of being able to improve is knowing
what the baselines and goals are, then
using visualizations to drive the
interventions.

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Six Strategies that Lead to FFV Success
6) Track Data and Outcomes
The hospital uses Activity Based Costing,
a tool that helps it lower costs, improve
profitability, and negotiate better
contracts with payers.
Other tools, like Department Explorer:
Surgical Services and Supply Chain
Explorer, provide insights to improve
operational efficiencies, reduce waste,
and lower costs.

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The dogmas of the quiet
past are inadequate to the
stormy present.”
Value-Based Care Requires Setting and
Keeping the Course
In 1862, Abraham Lincoln, in his second
annual address to Congress, made this
statement that is as applicable today as
it was then:
This quote typifies what hospitals should
be doing right now, not only as
presidencies change, but also as they
strive to stay relevant and involved.

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Value-Based Care Requires Setting and
Keeping the Course
Thriving under value-based care is a
matter of establishing an internal culture
and practices that can be achieved
regardless of the political climate.
Healthcare organizations may find
themselves trying to weather a big storm
as they make the transition, which
requires doing things they haven’t
done in the past, such as executing
the six strategies outlined above.

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Value-Based Care Requires Setting and
Keeping the Course
The hospital in our article would have
suffered financially had it not been prepared.
Given that it’s an independent among all the
vertical and horizontal integration taking
place across the country, this is a huge
accomplishment made possible by putting
the Triple Aim at the center of everything.
Health systems of any size, anywhere, with
any socioeconomic influences, can also
achieve FFV success by providing superior
care, controlling costs, and proactively
engaging payers to drive volumes to become
part of a sustainable healthcare model.

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For more information:
“This book is a fantastic piece of work”
– Robert Lindeman MD, FAAP, Chief Physician Quality Officer

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More about this topic
Link to original article for a more in-depth discussion.
Against the Odds: How this Small Community Hospital Used Six Strategies to Succeed in
Value-Based Care
Why You Need to Understand Value-Based Reimbursement and How to Survive It
Bobbi Brown, VP of Financial Engagement
The Key to Transitioning from Fee-for-Service to Value-Based Reimbursement
Bobbi Brown, VP of Financial Engagement; Jared Crapo, VP
Surviving Value-Based Purchasing in Healthcare:
Connecting Your Clinical and Financial Data for the Best ROI
Bobbi Brown, VP of Financial Engagement
9 Ways Your Outcomes Improvement Program Could Be Delayed
Brian Eliason, VP of Technical Operations
How Partners HealthCare is Managing Costs in the Emerging At-Risk Environment - PDF
Health Catalyst Success Story

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Amanda Rich worked at Wells Fargo in New York City as a client associate in the Private
Wealth Management Group where she thrived in Portfolio Research. Amanda has a degree in
Marketing from North Central College in Naperville, IL.
Other Clinical Quality Improvement Resources
Click to read additional information at www.healthcatalyst.com
Brian Eliason brings more than 10 years of Healthcare IT experience to Health Catalyst,
specializing in data warehousing and data architecture. His work has been presented at HDWA
and AMIA. Prior to coming to Health Catalyst, Mr. Eliason was the technical lead at The
Children's Hospital at Denver with experience using I2B2. Previously, he was a senior data
architect for Intermountain Healthcare, working closely with the disease management and care
management groups. Additionally, he helped Intermountain bridge clinical programs with the
payer-arm, Select Health. Mr. Eliason holds an MS in business information systems from Utah
State University and a BS from Utah Valley University.