On Jan. 26, 2015, U.S. Department of Health and Human Services (HHS) Secretary Sylvia M. Burwell announced a timeline to move the healthcare system at large — including the Medicare program — toward paying providers based on the quality of care given to patients, as opposed to the quantity of care, which had been the model of use in the past.

The evolution from the fee-for-service model to value-based care is still a hot topic among those affected in the case management and healthcare industry. In an exclusive interview with MultiView, Cheri Bankston, RN, MSN, director of clinical advisory services for Curaspan, explains just where the industry is going and how best to help your hospital staff move productively in the right direction.

Natural evolution

Fee-for-service (FFS) is a payment model where unbundled services are paid for separately. The model gives physicians an incentive to go overboard with treatments because payment is based on the quantity of care as opposed to the quality. The Centers for Medicare and Medicaid Services (CMS) pushed for the natural evolution to a value-based care.

According to an HHS news release, the department set a goal of tying a previously-agreed-on amount of "traditional, or fee-for-service, Medicare payments to quality or value through alternative payment models, such as Accountable Care Organizations (ACOs) or bundled payment arrangements by the end of 2016, and tying 50 percent of payments to these models by the end of 2018."

"HHS also set a goal of tying 85 percent of all traditional Medicare payments to quality or value by 2016 and 90 percent by 2018 through programs such as the Hospital Value Based Purchasing and the Hospital Readmissions Reduction Programs," according to the news release. "This is the first time in the history of the Medicare program that HHS has set explicit goals for alternative payment models and value-based payments."

The evolution from the FFS model to value-based care was to be expected, Bankston noted.

"The fee-for-service model has failed us," she said. Those involved in the industry and those who are meant to benefit from it have only seen "increased costs, increased complications, and we're not getting what we want."

Although it can and has been debated which is better and whether FFS is actually as bad as some are making out value-based care models seem to better address costs, directing focus squarely on quality.

Bundled payments

One example of the industry's new attention to value-based care and how it can work was exemplified in the CMS hip and knee replacement payment bundle initiative last November.

Patients seeking out total joint replacement procedures found there was little to no consistency in costs or quality of care, Bankston explained. Often times, patients found themselves paying wildly different costs for similar procedures, depending on where and in what hospital they received care.

"The [cost] variances were huge ... across the nation," she said.

CMS found this to be true: "In 2014, more than 400,000 Medicare beneficiaries received a hip or knee replacement, costing more than $7 billion for the hospitalizations alone. Despite the high volume of these surgeries, quality and costs of care for these hip and knee replacement surgeries still vary greatly among providers."

On April 1, the CMS's finalized Comprehensive Care for Joint Replacement (CJR) model went into effect, holding hospitals accountable for the quality of care provided to Medicare FFS beneficiaries and patients receiving care from surgery through recovery for major leg procedures, including hip and knee replacements. The conditions of the model offer payment incentives for certain hospitals that show strong performances and quality of care, while potentially penalizing those that do not.

The key was bundling costs into one payment. The hope is that moving toward requiring patients to pay one payment, no matter how long the patient is being cared for, could help reduce costs and strengthen quality and efficiency, Bankston said.

Guidance through change

The biggest issue for hospitals adjusting to the switch from FFS to value-based care may be convincing staff from different levels of healthcare to come to the table together and adapt to these new changes, Bankston said.

And this is where the proper leadership comes in handy. With bundled payments, teamwork will be essential.

When introducing these new rules to staff, "you have to have a good understanding of where you stand [at the moment]," Bankston said.

Define your goals ahead of time. When making such staffwide changes, managers may wish to focus on "low-hanging fruit" goals that can be reached easily.

"Identify your biggest opportunities," she said. "These opportunities should require little change and offer great results."

When you make changes that may feel drastic to staff, it's important that managers also share successes for morale purposes. Morale can be a major issue when dealing with staff members who are stuck in their ways and accustomed to past procedures.

For example, sometimes bedside teams think new rules may get in the way of them properly performing their jobs. Many would rather resign themselves to the mantra, "I'm just here for the patient." But understanding the rules even newly initiated ones that may seem intrusive is being a good steward for your patient, Bankston explained.

If you don’t understand the rules that help ensure value-based care, "you can't help your patient as much as you think you can otherwise. This is especially true if you don't understand your limitations," she said.

As a leader, it's important to explain to your staff what the changes will mean for better patient care. Address changes by:

  • Being transparent
  • Being upfront about your goals
  • Celebrating small victories

With all of the recent changes in the healthcare industry, things can seem a bit overwhelming. But this transformation can be worth it in the end.

"It's like juggling cats," Bankston admitted. "It's difficult, but it's very rewarding."