CMO Perspective
While the industry has shifted in recent years to a focus on value-based purchasing, I will profess that I’ve always been a value evangelist. Throughout my more than 25-year career in healthcare, I have served in executive roles leading health plans, health systems and nationally scaled providers. As I share a few observations from the culmination of my years in seemingly different roles, suffice it to say: The lessons learned are pretty much the same.
Financial risk is not accountability | The highest and best use of risk is to defer to the provider to know what to do best and to eliminate burdens in the way of doing so effectively. It’s about freedom to perform. An appropriate risk design assures that if an incorrect decision is made, risk provides a swift, certain and proportionate response.
Physicians as partners | An effective risk strategy turns physicians from mere participants to partners, requiring financial skin in the game. Understanding the cost implications of medical decisions and holding our providers accountable to those decisions is an obligation on the part of hospitals, IDNs and health plans. We have data that provides the greatest understanding of this space, yet there are still doctors with little to no understanding of how cost or reimbursements work. The industry can’t continue to see providers as a means to growth without a commensurate understanding of what is high-quality growth.
“One way to uncover hidden value is by integrating supply chain & clinical operations through formal cost, quality & outcomes programs.”
Aashish Shah, M.D., JD
Alignment of incentives | The most mature model of aligned incentives is fee-for-service. Value-based care really isn’t about aligned incentives; it’s about shifting risk. Therefore, in order to control unfettered, uncoordinated specialty care and services (as well as their related sites of care), the focus and investment should be in primary care. This means identifying the singular provider best equipped to address high-quality referrals, avoid chronic breakdowns and manage the inappropriate site of care usage—primary care. Continue to pay specialists well but pay primary care providers (PCPs) better.
Mature data and reporting | Those most likely to give away their risk are those least likely to have mature data integration and reporting. There are unlimited “partners” willing to offer risk but unable (and some unwilling) to provide the most fundamental reporting to monitor and measure risk performance. Notably, many national, risk-based PCPs have data sets and platforms far greater than their payer counterparts. This is a natural setup for failure as outlined in the previous paragraph.
Connecting the dots | Organizational alignment is key. The CEO, CFO, COO and CMO must all be in lockstep. Neither cost containment, quality improvement or better outcomes can be achieved without this integrated view. It is clinical financial decision-making.
Across the U.S., hospitals and health systems continue to look for ways to deliver more value to patients, to payers and to their bottom lines. One way to uncover hidden value is by integrating supply chain and clinical operations through formal cost, quality and outcomes programs. For those struggling with how to do so effectively, HealthTrust can help you bridge that gap.
Aashish Shah, M.D., JD
Senior Vice President & Chief Medical Officer
HealthTrust Performance Group
Read more about performance improvement solutions from HealthTrust in Unlocking Value and then reach out to let me know how we can assist your organization. In the meantime, stay well.
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