Value-Based Care: Yes, There Is Low-Hanging Fruit

Feb. 6, 2017
For the CIOs of hospitals and health systems just beginning to transform from fee-for-service to value-based care, it’s important to know two things: 1) value-based care is here to stay, and 2) there is low-hanging fruit.

Life as the CIO of a health system is far from easy.

Most have a broad set of responsibilities that span information systems management, infrastructure upgrades, health data security and patient engagement. Typically they are also challenged by overarching dynamics that characterize the healthcare industry, including the rapid pace of change, an uncertain regulatory environment, physician fatigue and burnout, an increase in data breaches, the consumerization of healthcare, an upsurge in mergers and acquisitions, and more.

Contemporaneously, most hospitals and health systems have begun the evolution to value-based care. Medicare has moved aggressively towards risk- and value-based care. A mere five years ago, no Medicare payments were under risk arrangements. Today, more than 30 percent are, and it’s expected to be 50 percent by 2018.

At the same time, health plans have created many value-based contracts. Estimates suggest there are 838 accountable care organizations (ACOs) serving 28 million Americans, and more than half of them include a hospital. That’s why industry experts have predicted that by 2018, 90 percent of all hospital payments will be value-based.

I recently had the opportunity to participate in the webinar, Readying Your Organization for a Value-Based World. The other panelists, Kyle Johnson, SVP/CIO, Eastern Maine Healthcare System; Michael Elley, system VP of IT, OhioHealth; and Renee Broadbent, AVP, population health IT and strategy, UMass Memorial Medical Center, and I discussed the preparation steps, technologies and challenges in transitioning from fee-for-service medicine to a value-based world. There is much to be learned from these technology leaders whose organizations were early adopters of ACOs and risk-based contracts.

For organizations at the beginning of their journey to value-based care, it’s important to share that, as ambitious as this transformation is, there is also so-called ‘low-hanging fruit.’ Let me say I do recognize the term low-hanging fruit is a subjective one, and what’s simple for one health system to do may be much more challenging for another.

Yet, there was some consensus around initiatives that could be undertaken at the outset to support a health system’s evolution to value. Some of the actions we discussed were:

  • Begin to align the information technology strategy with your organization’s overall business strategy.
  • Start now.

    It may be tempting to wait until the details of the widely-anticipated Affordable Care Act replacement are final, but the consensus of industry leaders is that value-based care is here to stay.

    In the words of Eastern Maine Healthcare’s Kyle Johnson, “Dip your toes in, even as your organization continues to get the majority of its reimbursements from the fee-for-service world. Begin to learn how to manage the health of consumers and populations.”
  • A good starting point is a Track 1 Medicare ACO with one-sided shared savings.

    UMass Memorial Medical Center’s Renee Broadbent eloquently discussed the need for engagement by the medical staff and ultimately to achieve significant behavior change, and recommended health systems begin with ACO models that limit or eliminate down-side risk.
  • For many health systems, leakage and out-of-network referrals offer another good place to begin as well as the opportunity to recoup the investment most organization’s make in health information technology specifically designed to manage value-based care contracts.
    A Geneia health system client used our analytics and insights platform to support a five percent reduction of out-of-network referrals in the first year.
  • Inventory your organization’s measurement that continues to occur with ‘pen and paper’ and prioritize which processes to standardize and automate.
  • Adopt technologies such as telemedicine and remote patient monitoring which have now been shown to cost-effectively improve the quality of care.

    As one of many examples, a year-long Geneia study showed remote patient monitoring slows disease progression, reduces hospitalizations and readmissions, and improves medication adherence while saving $8,375 annually per monitored chronically-ill patient.

As challenging as it is to be a CIO of a health system these days, I do believe it’s an exciting and energizing time as well. The advances we’ve been making with technology and advanced analytics make real the promise of meaningful population health and true longitudinal care, which in turn means health systems can thrive in a value-based environment.

Fred Rahmanian,
Chief Technology Officer,