Rogers discusses her new position, her ultimate goals for the organization, and how healthcare leaders can overcome the onslaught of financial challenges facing hospitals.
Sherron Rogers, a veteran in the healthcare finance space with almost two decades of experience—has recently stepped into the role of chief financial officer for Johns Hopkins All Children's Hospital—a St. Petersburg, Florida–based pediatric care organization.
Rogers joined Johns Hopkins All Children's Hospital earlier this year, having previously served as CFO and chief strategy officer for Eskenazi Health in Indianapolis for six years. Rogers says she was drawn to the CFO role at Johns Hopkins All Children's Hospital out of a desire to help the organization's mission to care for vulnerable members of the community and its patient-first focus.
HealthLeaders recently connected with Rogers to discuss her new position, her goals for the organization, and how healthcare leaders can overcome the onslaught of financial challenges facing hospitals and health systems.
HealthLeaders: What financial challenges is the organization facing and what solutions do you plan to utilize?
Sherron Rogers: Healthcare is changing rapidly, and we are challenged to keep up with the pace of change. It's important to continue to provide the most meaningful services to our patients, to the community, and to expand the services that we provide. Like everyone else, we're facing challenges in continuing to recruit and retain the workforce. We have a wonderful organization that is mission-driven and is a place where people want to work. But that's not the end of the story. People need to feel their work is valued and they can do that in our organization. And we need to continue to make sure we're providing those meaningful experiences for our members because they are the ones giving to our patients. We are hiring in all areas of the health system, but like others, we're trying to make sure we're recruiting, in nursing, and respiratory therapy, specifically.
We've asked a lot of our people throughout the course of the pandemic. You don't go into healthcare expecting an easy career. Most of us in healthcare are the ones running toward a challenge, not away from one. We have that in our spirit. However, nobody expected the pandemic or the effects of the pandemic to last as long as it has, so that provides somewhat of a weariness, and that's part of the challenge to attracting and retaining talent.
HL: What are some ways Johns Hopkins All Children's Hospital is investing in its employees?
Rogers: Sacrificing patient care and sacrificing our workforce are non-negotiable. We pride ourselves on delivering outstanding high-quality care and creating memorable experiences during extremely tough times in people's lives, we won't compromise on that. And to do that, we have to have an engaged, happy, and empowered workforce. We have to find a way to do both, and it isn't as simple as compensation.
Compensation is extremely important, but it is also about those other services and benefits that we can provide like dependent tuition reimbursement, continuing education, training on engaging people around work, and pursuing their ideas. All of that creates a good work environment and we're intentional about that.
Anyone who works in healthcare has a taxing job, cares deeply about the patient in front of them, and wants to do their best. So, we invest in things like employee assistance programs, having on-site counseling services, and ensuring our leaders are trained and equipped to identify if someone is challenged and having burnout. We also invest in future planning, like retirement planning, and helping support school loan payments. Anything that can reduce the financial burden can be critical to our colleagues.
HL: How does Johns Hopkins All Children's Hospital utilize technology in healthcare?
Rogers: We are reliant on technology. We have a number of robust technology systems in place, and we have strong business and finance systems that support our work. We are investing in additional analytic support so we can better understand the clinical data within our electronic medical record system and the financial data within our business system. With that information in the hands of our leaders, we can work toward improving our goals.
HL: What is your goal for Johns Hopkins All Children's Hospital, and how will you achieve this goal?
Rogers: When I joined the organization, I went on somewhat of a learning tour. I wanted to hear feedback from my team. I wanted to know what was working well for them, what ideas they had, and the things that we could improve, as well as different services that we could provide to add value to our customers. I wanted to know the ways in which they typically work with finance, not only their priorities but also their pain points.
It's important to understand our customers' needs first and to ensure we're meeting those needs and then as we begin to address our customers' needs and wishes, we can start to layer in some of our own priorities as well. So, I'm focused on providing additional transparency and insight behind the numbers. You won't find me just sharing numbers—I'll share all the numbers that I can, but there is always context and story behind those figures. That mindset resonates well when I am working with our operational leaders. Finance has an opportunity to monitor not only what's occurring right now, but how we support strategic decision-making in our future. That's a priority for me.
HCA originally planned to invest $45 million in developing the new Angel Medical Center but ended up spending $25 million more to see it completed.
HCA Healthcare’s Mission Health—an Asheville, North Carolina-based hospital with over $1 billion in total revenue—has recently opened a 30-bed inpatient critical access hospital in Franklin, North Carolina.
The new Angel Medical Center—which opened earlier this month— has three operating rooms, dedicated endoscopy and radiology spaces, and a 17-bed emergency department with two trauma bays. Outpatient services include a wound clinic, a full laboratory, digital mammography, CT, MRI, nuclear medicine, and physical, occupational, and speech therapy, according to its website. The hospital also operates Mission My Care Now—Angel and CarePartners hospice and palliative care providers.
HCA originally planned to invest $45 million in developing the Angel Medical Center but ended up spending $25 million more to see it completed, according to a report from Blue Ridge Public Radio.
"This is an incredibly exciting time for Angel Medical Center and Macon County. There has never been more change than in today’s health care environment—from federal policy, to care delivery to technology and the ever-growing demands on our facilities. It’s our responsibility as board leadership to be thoughtful, adapt to meet the needs of our valued communities, and ensure sustainability for decades to come," Angel Medical Center Board Chair Jane Kimsey told Smoky Mountain News back in 2017 when the new facility was first announced. "Our remarkable investment in this new facility supports our vision to deliver the highest quality services and an exceptional patient, family, and team member experience for the long-term benefit of Macon County’s patients and families."
Forty-four percent of hospitals view the 340B Drug Pricing Program as a critical revenue source.
The original purpose of the 340B Drug Pricing Program was to help ensure patients with cancer could afford the life-saving drugs they’d need, however, a lack of regulation and oversight has gotten in the way of the original mission, and new research from the Community Oncology Alliance found that safety net hospitals have hiked the cost of cancer drugs almost five times their 340B purchase price.
The Community Oncology Alliance examined 49 top acute care hospitals with many uninsured patients and found that these hospitals price the top oncology drugs at 4.9 times their 340B acquisition costs, assuming a 34.7% discount, which the report calls a conservative estimate. The lowest average markup, according to the report, was 3.2 times and the highest was 11.3 times their 340B acquisition costs.
"The 340B program is now seen as a major revenue source by 44% of the nation’s hospitals, particularly in cases when they utilize the discount program on patients with insurance and retain the spread between the deeply discounted 340B price and insurance reimbursement," the report reads. "There is no clear definition of eligible 340B patients and there are no requirements for 340B hospitals to pass savings to patients, though there is an implicit expectation that these facilities would reinvest the funds to support care for patients in need of financial assistance. Yet, concerns about the lack of transparency into how much money 340B hospitals generate from the program or how they use it have also augmented the calls for increased hospital price reporting."
The report suggests that current transparency regulations may not be enough to accurately assess the pricing transparency on the margins that hospitals make on 340B products. Though the report does acknowledge that hospital reporting has "improved slightly," further legislative and regulatory changes are needed to remediate mark-ups among 340B hospitals.
"These realities translate into access to services being put in jeopardy and this deserves the immediate attention of policymakers," says Rick Pollack, President, and CEO of the American Hospital Association.
The mounting pressure on healthcare staff and resources is turning 2022 into one of the worst financial years for hospitals and health systems on record.
Over half of the hospitals and health systems surveyed by Kaufman Hall are projected to operate in the red for the rest of this year, limiting access to care for patients and resulting in billions of dollars in losses for these organizations. Fifty-three percent of hospitals are expected to finish 2022 with negative margins relative to pre-pandemic levels, according to the data—which was released by the American Hospital Association. Expenses are also expected to grow through the rest of the year, leading to an increase of almost $135 billion over 2021 levels. Labor expenses are predicted to grow by $86 billion, while non-labor expenses are expected to grow by $49 billion.
To make sure patients have access to care and hospitals across the country are financially strong, the AHA is asking Congress to stop more Medicare cuts from taking effect next year, as well as extend government assistance programs for rural hospitals. The AHA is also asking Congress to make critical waivers permanent and keep payers honest by holding them accountable for plans that raise the cost of and delay access to care.
"The bottom line is America’s hospitals are under severe financial pressure as they experience stark workforce shortages, broken supply chains, and rapid inflation that has increased the cost of care," Rick Pollack, President, and CEO of the AHA said during a media call discussing the research. "These realities translate into access to services being put in jeopardy and this deserves the immediate attention of policymakers at every level of government to ensure that we’re able to keep people healthy, and also maintain essential public services that our communities depend on."
Projections for the rest of 2022 indicate margins will be down 37% relative to pre-pandemic levels, according to the Kaufman Hall, AHA data. More pessimistic projections suggest a possible 133% decline in margins. Projections also show expectations that there will be no additional federal support, yet there is the potential for future COVID-19 variant surges that could cause increased rates of expense growth, sicker patients who have delayed care, aggressive payer negotiations, and increased payer mix of non-commercial payers.
"While we're grateful for the relief that was provided during the pandemic, which was a lifeline, it's important to remember that not a dime that was provided during that period was addressing the Delta and Omicron surges and that accounted for half of all hospital admissions," Pollack said. "I want to make sure that we recognize that while federal relief has tapered off and new payment reductions have kicked in, the fact of the matter is that COVID hasn’t."
Peggy Abbott is the CEO of Ouachita County Medical Center, a hospital in rural Arkansas and she can attest firsthand to the challenges facing organizations like hers.
"Our small hospital is financially challenged and struggling to survive the negative impacts that are created by this historical level of inflation, the increase in supply costs, and labor," Abbott said on the call. "Competing with the agency staffing for clinical staff is contributing to the financial strain and it's impacting our ability to recruit and retain clinical staff. If we don't have nurses, respiratory therapists, and radiologists, we cannot have patients in the bed. And of course, there is the spread between the cost of operating a hospital and the reimbursements from our payers for Medicare and Medicaid, as well as commercial insurance companies and that is causing an incredible strain."
The Kaufman Hall, AHA data highlights the critical situation hospitals are facing and without direct government support, industry leaders are concerned about the future of the American healthcare system.
"The American healthcare system is one of the best in the world and we cannot let it fail," Jack Lynch, president, and CEO of Trinity Health said on the call. "We must continue to make changes on the provider side which will be difficult in an environment where consumers have higher expectations than ever. However, without the care provided to government beneficiaries and appropriate rate increases from commercial payers the ability to assure access to timely care in rural, suburban, and urban communities will be at risk. In my 35 years in healthcare, this is the most fragile I’ve ever seen the American healthcare system."
Sultana Afdhal, CEO of WISH, calls for global collaboration between health systems to manage the next pandemic.
Healthcare workers around the world agree that challenges including poor funding, labor shortages, and poor planning mean that hospitals and health systems are not prepared for another crisis like the COVID-19 pandemic, according to research from the World Innovation Summit for Health (WISH).
Forty-nine percent of the healthcare professionals in the U.K., U.S., Saudi Arabia, Nigeria, India, and Brazil who were surveyed say they lack the preparation needed to endure, should another healthcare crisis like the COVID pandemic arise in the next five years. In the event of a new pandemic, 60% of the healthcare workers surveyed by WISH say a lack of financial support will be a major contributing factor to their system failing to rise to the challenge. Another 55% say the workforce shortage across global healthcare systems will also play a significant role in the next pandemic.
"Our findings spotlight some of the critical challenges that the COVID-19 pandemic has forced upon us over the last two years, and which those that care for us are still trying to mitigate today," Sultana Afdhal, CEO of WISH, said in an emailed press release detailing the survey. "As an advocate for a healthier world through global collaboration, we urge governments, industry leaders, and policymakers to take these insights and work towards building next-generation health systems that are better equipped to meet similar challenges in the future, in order to improve the standard of care and, crucially, to ease the burden felt by our healthcare workforce."
Additionally, 44% of those surveyed said an inability to properly support patients is a threat to their national health systems.
"The current pandemic has strained health systems to create urgent response measures such as increasing capacity, enhancing infection control, moving to remote models of care, and enabling mass vaccination, among others," Afdhal continued. "There is a need to take stock of the challenges and for enablers to respond at a national level, as well as create opportunities for accelerating the sharing of strategies internationally."
John Pohlman, CFO and SVP of Finance for Mount Sinai South Nassau, speaks about the challenges currently impacting healthcare leaders.
Maintaining the financial operations of a hospital or health system comes with a unique set of challenges that takes a steady hand to navigate. Labor shortages, rising expenses, COVID-19 infection surges, and other challenges have been plaguing the healthcare industry for years, forcing healthcare organizations to reevaluate the way they budget and do business.
John Pohlman, CFO, and senior vice president of finance for Mount Sinai South Nassau has been working to overcome these challenges since assuming the role back in October of 2019.
He has always been mathematically focused and wanted a career in finance. He came into the healthcare industry with an understanding of how unique it is, knowing it wasn’t an area to be taken lightly, and that the financial well-being of an organization must walk together with the well-being of patients.
Pohlman recently connected with HealthLeaders to discuss the financial challenges currently facing the healthcare sector, how to overcome those obstacles, and his ultimate goal for Mount Sinai South Nassau.
HealthLeaders: What financial challenges has Mount Sinai South Nassau been facing?
John Pohlman: I'll speak regarding the last six to eight months. I'll call it "post-pandemic" even though we’re still dealing with the pandemic, but we’re not in the heat of the battle like back in March and April of 2020. The challenges we’re facing currently, first and foremost, is staffing shortages—and it’s really across the board. Obviously, RNs are leaving, but it's also lab technicians, radiology technicians, and pharmacy technicians, too. It seems like every day we're dealing with a different job function and the shortages that exist. That's certainly driving wages a lot higher than what we saw a year or two ago. That's probably the biggest thing that keeps me awake at night.
The second is from a supply chain perspective. It's the supply chain challenges, inflation, and the impact that has had on our non-labor costs. I was recently in a meeting where I saw our utilities—natural gas and electric—have doubled in the last two months. That is certainly putting a strain on financial operations. And then in general, the cost of care is increasing at a significant pace and the problem we have in healthcare is we can't pass that cost on as quickly as they can in other industries.
HL: What strategies are you putting in place to overcome these issues?
Pohlman: We have reimbursement rates with our managed care companies that are locked in usually over several years. So, we are really locked in on the rate side and have to get creative and maybe open up discussions with those managed care companies or insurance carriers and say, "Listen, folks, we're seeing double-digit increases on the cost side, and we really need to open up negotiations and talk about reimbursement." Obviously, we don't want to impact the quality of care; we want to maintain that high quality of care that our communities deserve and that we're used to providing. So that really has been the struggle over the last eight months. I anticipate that it'll continue through the end of this year and into next year.
When it comes to staffing shortages, there has been a lot of focus on recruitment and retention. We probably have to focus more on the retention side and try to figure out how to keep our high-quality employees. We've recently rolled out what we call "senior leadership rounding" and it's senior leaders getting out to the different units and speaking to the leaders of those departments, but also the frontline staff to really understand the challenges that they're facing on a day-to-day basis. We've seen some positive results from those rounding episodes [that] we've had in place probably for a couple of months now. It's really allowing the frontline staff's voices to be heard, and it's eye-opening for the senior leaders as well because we're not out there in the trenches. To really understand what's going on day to day and the challenges that are that our teams are facing, [it helps] us as leaders to sit down and make some decisions that will support the entire organization.
HL: Have you personally sat down with any of the hospital staff to get a better understanding of what would keep them in the organization?
Pohlman: I haven't sat down with every department, but the departments I've been involved with are not shy. The number one item on their list, in my opinion, is wages. We look at wage data on an annual basis and we compare it to competitors in the area. We compare it to the metropolitan area as well, so that's one of the tools we have in place to make sure that we're competitive on the wage side. Because we're dealing with all the pressures of inflation, our employees are certainly feeling the pain on that personal finance side. We're making market adjustments throughout the year when the market tells us that wages are heading in a certain direction. We certainly adjust the best that we can.
HL: What is your goal for not only the financial well-being of the organization but also to continue providing high-quality care to patients?
Pohlman: Looking at an income statement every year, my goal is usually a 3% operating margin. We have top-line revenue of about $700 million. So, a 3% operating margin would be a surplus of around $20 million. With that surplus of $20 million, we can reinvest back into the organization. There are multiple buckets or silos that I think of when I talk about reinvestment. One is around capital and technology. We want to make sure that we're replacing our radiology equipment, MRI, CT scanners, and all the equipment in the operating rooms that support our surgeons and allow them to take care of patients. We want to make sure that we have the latest technology because that's going to provide the highest quality of care to our patients.
That's one reason why we need that operating surplus. The other reason is we want to reinvest in our staff and our employees. We want to continue to give wage increases and make market adjustments when necessary. Investing on the capital side and on the labor side certainly drives higher quality and patient satisfaction. That's always my goal from a financial perspective. We need to operate on the surplus side so we can continue to reinvest in the organization to support the communities that we serve and provide them with that high quality of care.
Scott Wolfe formerly served as the president of St. Luke's Warren Campus.
St. Luke's University Health Network—a Pennsylvania-based healthcare organization with over $2.7 billion in revenue—has permanently appointed Scott Wolfe to the position of chief financial officer.
Wolfe stepped in as interim senior vice president of finance and CFO in January 2022. He succeeds Thomas Lichtenwalner, who passed away in November 2021. Before stepping into the CFO role, Wolfe served as president of St. Luke's Warren Campus based in Philipsburg, New Jersey. He has held that role since April 2012 shortly after the former Warren Hospital joined St. Luke's that same year.
While leading Warren Campus, Wolfe oversaw a $150 million investment from St. Luke's that helped to expand access to care in the New Jersey market of Warren and Hunterdon Counties. That investment also went toward expanding services including surgical and GI procedures, weight management, endocrinology, rheumatology, nephrology, and various pediatric subspecialties. The investment also helped rebuild almost all the patient care areas, providing a more state-of-the-art clinical setting.
A decade ago, it would have been nearly impossible to envision the revitalization of Warren Hospital and the powerful impact of its partnership with St. Luke's University Health Network," Karen Kubert, St. Luke's Warren Campus Board Chairman, said in a press release announcing Wolfe's promotion. "Today, the Warren Campus's restored reputation is spreading by word of mouth."
"Fighting for patients’ lives should not include fighting to get paid," says Envision Healthcare CEO Jim Rechtin.
Envision Healthcare—a Nashville-based, private-equity-owned healthcare provider with over $14 billion in annual revenue—has filed a lawsuit demanding UnitedHealthcare pay its bills and fairly reimburse clinicians for providing emergency care to patients across the country.
Envision’s suit claims United prioritized its own profits over patient well-being and supporting doctors and other healthcare practice providers providing emergency room care. The lawsuit points to several incidents including a 31-year-old man requiring an emergency appendectomy and a 2-month-old baby with unexplained episodes of choking, vomiting, and turning blue, suggesting United subjected these and other claims to a "pre-payment review" before eventually denying the claims.
"After pushing Envision clinicians out-of-network in January 2021, United began a routine and systematic denial of commercial claims related to emergency room care for its members with the highest acuity — patients who sought care for life-threatening illnesses and complications," Jim Rechtin, Envision Healthcare CEO, said in an email release detailing the lawsuit. "United’s scheme to deny patient claims violates federal law. Improperly withholding payment from the very frontline clinicians who treated their members in their most acute time of need is, in my opinion, cold, callous, and inhumane."
Envision Healthcare has been struggling financially this year, reporting a loss of $26 million for the second quarter’s adjusted EBITDA, according to a Bloomberg report, which is a decline from the gain of $221 million for the second quarter of 2021. Envision’s losses were the result of growing labor costs, a change in the way private and government insurance plans pay for services, and a separate contract fight with United.
Investors and lenders are unhappy with some recent moves Envision Healthcare has made to secure new financing as it works to improve operations, including moving some valuable assets away from its creditors. The No Surprises Act, which took effect in January, is another area of frustration for Envision Healthcare as it will limit how much patients can be billed for out-of-network emergency services.
The suit against United specifically references emergency department services, claiming that United "didn’t pay a penny" for the emergency treatment provided to the patients previously referenced.
"Only United, with its $17.3 billion in profits in 2021 and 1,000% stock price increase for its owners, would have the audacity to refuse reimbursement to the clinicians providing the life-saving care to its own members," Rechtin said. "Envision’s clinicians will continue to guide their patients through life’s toughest moments. Fighting for their patients’ lives should not include fighting to get paid."
Healthcare finance industry leader Ronnie Thompson has joined the HCA Midwest Health-owned hospital as the new chief financial officer.
Centerpoint Medical Center—a Missouri-based healthcare provider with 281 total staffed beds and over $2 billion in total patient revenue—has appointed 25-year industry veteran Ronnie Thompson as chief financial officer.
Thompson will oversee all financial management aspects for Centerpoint Medical Center—which is part of HCA Midwest Health, the largest healthcare provider in Kansas City. His responsibilities include overseeing the hospital’s accounting, materials management, staffing, case management, and information technology initiatives relating to patient access and medical records.
"I look forward to working with the dynamic and collaborative Centerpoint Medical Center family and advancing the tradition of solid financial stewardship and serving patients and their families," Thompson said in a release announcing his new position. "I have a strong personal and professional commitment to community-based healthcare and value the opportunity to join one of Eastern Jackson County’s most highly-regarded hospitals."
Prior to becoming CFO Thompson served as Centerpoint Medical Center’s controller from 2012 until 2015, before being named chief financial officer at Belton Regional Medical Center, which is also part of HCA Midwest Health.
"Ronnie is a proven financial professional who will add tremendous value to our hospital," Bret Kolman, Centerpoint Medical Center Chief Executive Officer, said in the release. "His breadth of experience and expertise are assets as we continue to drive the hospital’s high-quality excellence in safe and compassionate patient care and physician engagement. Ronnie joins us at a time when we are on a growth trajectory to meet the increasing healthcare demands of the communities we serve."
'Value-based payment will only be successful if it is explicitly designed to support value-based care,' says Harold Miller, president, and CEO of the Center for Healthcare Quality and Payment Reform.
Value-based care is a hot topic in the healthcare industry, a payment strategy designed with patients' health and financial needs front and center. Consumers welcome it, but that doesn't mean hospitals and health systems have perfected this type of payment model.
Value-based payments, which offer healthcare providers financial incentives for the quality of care they give to people with Medicare, haven't resulted in lower healthcare costs, with some programs making it harder for patients with complex conditions to receive the right care, says Harold Miller, president, and CEO of the Center for Healthcare Quality and Payment Reform.
"Most value-based payment programs have failed to significantly reduce healthcare spending or improve the quality of care for patients," Miller says in a report titled 4 Steps to Successful Value-Based Payment. "Many have resulted in higher healthcare spending, and some have made it harder for patients with complex conditions to receive adequate care."
Miller says that a value-based payment program can only be successful when it is designed to directly support value-based care.
"Providers deliver care, not payers, so value-based payments must be designed to ensure that providers are able to deliver high-value services to their patients," he says.
To that end, Miller has come up with four steps providers can utilize to implement a successful value-based care and payment system.
The four steps are:
1. Identify potentially avoidable spending, i.e., specific types of healthcare services or spending that could be reduced without harming patients.
This is meant for providers to address areas where they and their patients can avoid costly and unnecessary spending. Areas, where patients and providers can address available spending, include eliminating unnecessary tests, medications, or procedures, and using expensive tests and treatments when a cheaper and equally effective alternative exists.
"In some cases, the unnecessary services can be harmful to the patient as well as resulting in higher spending," Miller says in the report. "A number of studies have shown there is a large amount of avoidable spending in the healthcare system overall. However, the specific types and amounts of avoidable spending will differ for different patients, different health conditions, and different healthcare providers, and it will change over time as new treatments are developed."
2. Design an approach to delivering services that is expected to reduce avoidable spending.
This calls on physicians, hospitals, and other healthcare providers to redesign their approach to the services they are providing patients. This redesign will also help identify areas of avoidable spending as discussed in the first step, says Miller.
"In order for patients with chronic conditions to avoid the exacerbations that result in ED visits and hospitalizations, they may need to receive more assistance in managing their condition or they may need different medications or treatments," Miller writes in the report. "In order for a physician to avoid ordering an unnecessary or unnecessarily expensive test or procedure, they may need to spend more time with the patient to narrow the range of potential diagnoses for a symptom or to help the patient decide to pursue a different method of treatment. Moreover, a lower-cost treatment has to be available and affordable for the patient, otherwise, it is not realistic to expect it to be used."
3. Create payments that give providers the ability to implement and sustain the new approach to service delivery.
This calls on payers to update the way they currently incentivize providers, making the strategy established in step two more appealing. Current payment systems include fees for over 15,000 different services, Miller says, however, there are no payments at all for a variety of high-value services that could reduce avoidable spending. These services include time spent by nurses educating patients about how to manage their health problems, non-medical services such as transportation to outpatient sites, and palliative care services for patients with advanced illnesses.
"In many cases, the simplest method for supporting the delivery of value-based care will be to create a fee for a new service or to increase the fee for an existing service," Miller writes. "In other cases, it may be desirable to replace existing fees with a 'bundled' payment that provides the flexibility to deliver services in different ways. The approach chosen should be one that is easy for both providers and payers to implement and that providers believe will enable them to deliver the services identified in step two."
4. Hold providers accountable for delivering appropriate, evidence-based services in return for the value-based payments.
This step asks providers receiving these new payments to take accountability for delivering services to their patients in a way that can reduce avoidable spending.
"The most feasible and effective approach to accountability is for the physician, hospital, or other provider to agree that they will only bill the payer for the value-based payments if they have delivered the evidence-based services the payments were designed to support," Miller writes. "If the provider has to deviate from evidence-based guidelines for patient-specific reasons the provider would need to document those reasons in the patient's clinical record in order to be paid for the services that were delivered. In contrast to current pay-for-performance systems, this approach assures that each individual patient is receiving the most appropriate, high-quality care for their individual needs. It also eliminates the need for burdensome systems of attribution and measure reporting that significantly increase administrative costs for both providers and payers."
