Frontiers of Health Services Management - Summer 2013 - (Page 18)

Moving from Volume to Value traditional approaches to contain costs by reducing unit prices only encourage providers to increase units. changing the environment from an episodic, fragmented, hospital-centric care delivery system to one that is patient centered and led by physicians shifts the focus of care provision from volume to quality outcomes. an environment characterized by coordinated care achieves better outcomes and lowers the costs of care. coordinated care not only increases An environment value but also provides characterized by strategic channels for coordinated care achieves reimbursement. early in 2008, better outcomes and UnityPoint Health (forlowers the costs of care. merly iowa Health System) Coordinated care not only publicly recognized that increases value but also healthcare in the United States, as it was currently provides strategic channels being delivered, would for reimbursement. not be sustainable. a delivery system that was fragmented, episode focused, and paid on volume could not address both an increase in Medicare beneficiaries and doubledigit health cost inflation without putting programs, patients, and the federal budget in jeopardy. at that time, the following characterized healthcare delivery: • fee-for-service medicine had driven primary care physicians onto a treadmill of volume, which, by definition, does not place the individual patient at the center of care. • Patients were being shuttled between silos of care (or sites of care) without coordination between clinicians. • a small portion of our patients—those with chronic health conditions— consumed half of our existing resources. as one of the nation’s largest nonprofit healthcare systems, we chose not to adopt a “wait and see” approach regarding healthcare reform. rather, we actively forged solutions and created innovative approaches to transforming care delivery and payment reform. With the support of our board of directors, we embarked on our integration initiative, knowing that this approach would entail some risk and that we might ultimately create a better delivery model without a payment system to compensate it. as we are all too aware, our current health system is complex and difficult for most to understand, even for those who work within it. We believed that transformation to a better delivery system depended on changing the payment structure. intrinsically, fee-for-service payment, which is reimbursed regardless of the quality of outcome achieved, will continue to escalate costs. in the past, public and private payers tried to control costs by focusing on the unit price paid for the services delivered. the natural economic reaction of providers, when their unit price is steady or decreasing, is to produce more units of service to maintain their revenue. for a primary care physician, this shift triggers a treadmill effect: each year, primary care physicians must see more patients each day to maintain revenue to support their practice. this economic cycle must be broken to stabilize or curb the costs of healthcare. to do so, the system has to move away from volume and toward value as a basis for payment. 18 • f ro ntier s o f h ea lth s e rvic e s m a na g e me nt 29 :4

Table of Contents for the Digital Edition of Frontiers of Health Services Management - Summer 2013

Frontiers of Health Services Management - Summer 2013
Contents
Editorial
At the Heart of Integration: Aligning Physicians and Administrators to Create New Value
Volume to Value
Physician-Led Models of Accountability and Value: Observations on Payment Policy and Culture
Collaboration Across Clinical Silos
Breaking Down Clinical Silos in Healthcare

Frontiers of Health Services Management - Summer 2013