Answer the questions in the reflection journal. use the powerpoint slides to answer the questions.

Presentation-WeekFour-SessionTwo-Chapter20-21final_1_1.ppt

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The Reason We’re All Here …

We began our final week of the course – taking a step back to review the Quality Improvement Landscape.

What are the key issues affecting Quality and Patient Safety?

We also reviewed the process of accreditation and how it influences quality and safety.

HCA 622 Week Four Roadmap

√ Please read Chapters in the required text prior to our class

√ In order to get the most out of the course, pace yourself by completing something everyday

√ Catch up as needed over the weekend

√ All graded assignments must be turned in no later than Sunday at midnight PT each week

HCA: 622 Quality Appraisal and Evaluation– WEEK FOUR ROADMAP
	Monday	Tuesday	Wednesday	Thursday	Friday	Sat/Sun
Themes	The Quality Improvement Landscape, Accreditation: It’s Role in Driving Accountability in Healthcare	How Purchasers Select and Pay for Value: The Movement to Value-based Purchasing, Transforming the Healthcare System for Improved Quality
Readings	Review Course Outline and read all items under Week One tab	Read Chapters 18, 19, 20, 21 in required text
Film Festivals
Discussion Questions		Complete DQ7	Complete DQ7
Exercises		Reflection Journal #1		Reflection Journal #2
Assessments						Final Exam
Case Studies
Course project						Signature Presentations/Paper

Chapter 20: How Purchases Select and Pay For Value: The Movement to Value-Based Purchasing
Chapter Outline

Value-Based Purchasing
Background and Terminology
Patient-Centered Medical Homes
Case Study: PROMETHEUS Payment
Keys to Successful Implementation and Lessons Learned
Conclusions and Key Lessons

The topics of discussion for this final session present information that is very important to you, as future healthcare leaders.

Where is the future taking us?

What are the different models we will use in the future for payment of care – moving from a volume-based process to a value-based process?

What are the implications of pay-for-performance?

We will review some case studies and the keys to success for moving forward.

We will finish our course work with some closing thoughts on leadership, quality and patient safety.

Introduction

Findings: Quality improves when physicians, nurses, and other clinicians take a high-touch approach; affordability improves when payment models are designed with built-in savings.
The simplicity of these findings underscores the complexity of reforming the US healthcare system.
If reform were simple, the findings would suggest that successful strategies could have been implemented long ago to the great benefit of all. And yet they have not. Why?

Value-Based Purchasing

Evolution of value-based purchasing
Concept imported into healthcare and applied on the premise that plans would compete for employers’ and employees’ premium dollars by demonstrating greater effectiveness in caring for covered members and greater efficiency in paying for care services
Strategy to achieve efficiency: consolidate the purchasing power of payers and health plan sponsors and obtain discounts from physicians, hospitals, and ancillary care providers
Strategy to achieve effectiveness: standardize measures of quality across plans and create a common way of assessing quality

Why has the evolution of reform in healthcare taken so long?

The key is that historically, the incentive systems have not encouraged us to take these vital steps toward reform.

Value-Based Purchasing (continued)

VBP movement has evolved from trying to get managed care organizations to compete for patients by delivering better value, to getting plan members to improve their personal healthcare consumption habits, to trying to affect provider behavior.
Reducing the variation and increasing the overall level of quality have become purchasing imperatives, especially in light of continued cost increases.

It is helpful to look back and track the evolution to our present model.

Timeline for the Medicare Quality Program

After the advent of Medicare in 1965, the model for payment was based on volume – the more care that was provided, the more rewards for care.

Medicare reinforced the model that was based on “fee for service”, whatever the doctor ordered for the patient, it was reimbursed – volume-based care.

Although there were efforts built into the Medicare process for a review of quality and cost, they were focused on individual cases and not on the over-all quality of the care provided.

As costs continued to rise, various methods were used to evaluate the care provided, encourage cost reduction and introduce a way to reduce cost. For the most part, these models, such as capitation – providing a lump sum for each patient cared for with a cap on spending, did not work.

Background and Terminology
Payment Models

Spectrum of payment incentives between the poles of fee-for-service and capitation
Fee-for-service
Pay-for-performance
Upside-only bundles
Full-risk bundles
Shared savings
Capitation

In recent decades, the model began an evolution toward paying for value or performance instead of paying for volume.

There is a spectrum of payment models that have been evolving – moving from fee-for-service to value-based purchasing.

Let’s take a closer look…

Assign varying levels of financial risk to providers

“Burning Platform”

The significant payment reform activities introduced by the Affordable Care Act (ACA) not only creates a burning platform for fee-for- service (FFS) payments but empowers the Center for Medicare & Medicaid Innovation (CMMI 2013), housed within CMS, to pilot new payment and delivery system models

There were several steps taken to prepare for this model, but the Accountable Care Act really created “the burning platform for change” and provides for CMS to pilot new approaches for rewarding for value instead of volume.

“Burning Platform”

FFS – Fee for Service
FFS entails a minimal amount of risk for the provider. FFS encourages physicians to provide more services, which can be useful when payers want to encourage use of services—for example, immunizations and screenings for certain diseases or conditions.
Medicare, which is the largest payer in the United States, primarily pays physicians according to the FFS model.

It is helpful to understand a little about each of these elements in the Provider-based Purchasing Model:

Fee for Service – Whatever is ordered is paid for - both the hospital and the physicians are rewarded for volume of care and services. Hospitals and physicians are paid separately.

“Burning Platform”

Pay for performance is the most prevalent method that attempts to counter the FFS model’s tendency to reward the volume based consumption habits, to trying to affect provider behavior

Pay for Performance – For the patients covered by CMS, hospital data is gathered on quality, patient safety and satisfaction indicators and benchmarked against all providers.

Whoever has the best performance against a set benchmark receives additional reimbursement.

For those who are below benchmarks, reimbursement is reduced. Hospitals and physicians are paid separately. (For the most part, physicians are still paid fee-for-service)

The pay-for-performance model is now in place and the data is publicly reported.

There is an expectation that the physician data that is being collected will also be publicly reported soon, but presently the physicians are still paid for fee-for-service.

Upside

Downside

This slide shows the progression toward pay =for=performance and the reqrds system changes.

“Burning Platform”

Upside-only bundles group the services that center on a specific procedure, an acute medical event, or even a chronic condition.
This form of payment does not lay probability risk on the provider, but it does entail technical risk because the provider is at risk for the frequency, mix, and costs of services produced within the defined bundle.
Upside-only bundled payments are designed to insulate the providers against any downside risk but create the potential for financial gain if the actual costs of care are lower than the predefined budget for the bundle.

Bundled payments – A set price is contracted with the hospital and physician together for the care of a patient – let’s say a hip replacement.

Up-side bundle – If the care costs less than the set payment, the physician and the hospital split the left-over dollars, thereby incentivizing them to work together and coordinate care. In the up-side model, if the care costs more than the set amount – only the hospital is affected and has to absorb the additional cost.

In a full-risk bundle – Both the hospital and physicians are at risk if the care exceeds the set amount.

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