5 Initial Steps to Move From Volume-Based to Value-Based Healthcare

by Rachel Fields

Most experts agree that the healthcare industry is in the midst of a transition from volume-based to value-based healthcare, but the process of changing a deeply ingrained culture of fee-for-service is still unclear. Ken Cohn, MD, MBA, FACS, believes hospitals can start transitioning to a value-based culture now by changing the way physicians interact with patients and each other and dissecting healthcare processes to eliminate waste. Here he discusses five ways hospitals can start thinking in terms of value rather than volume.

1. Improve communication around hand-offs. Dr. Cohn says one of the biggest reasons for hospitals readmissions is failure to communicate a plan for patient needs across the care continuum. “If you look at patients with congestive heart failure, the most frequent reason they come back [to the hospital after discharge] is that families, patients, and physicians haven’t had a definitive conversation about how to provide follow-up care at home, the office, and in a hospice setting, if necessary,” he says.

He says orthopedic readmissions, on the other hand, are frequently caused by a medical problem, which also emphasizes the need for providers to communicate in a different way about follow-up care. Patients need clarity about what to expect after discharge from the hospital and have a timely appointment to see their primary care provider, possibly within 7-10 days of discharge. A call to the patient within 24-48 hours of discharge may also clarify communication and prevent readmission, as discussed below. Hospitalist physicians need to know that the patient’s primary care provider has received a faxed or electronically delivered hospital discharge summary to make sure that everyone is on the same page about the appropriate follow-up treatment.

2. Call patients after discharge. Dr. Cohn says Waterbury (Conn.) Hospital has instituted a program where every patient receives a call from a healthcare professional after discharge. This process benefits the hospital in several ways. First, the patient is less likely to be readmitted to the hospital because of inadequate follow-up care, saving healthcare costs. Second, the patient feels a personal connection to the hospital and is more likely to recommend the services to family and friends. Third, the hospital catches medical communication issues more rapidly and is able to treat them with less-extreme options than if adverse drug reactions or signs of infection fester.

Dr. Cohn says Waterbury Hospital has seen enormous success with the program — “they’ve essentially dropped the number of patients who bounce back from the emergency room,” he says. He adds that the program is not expensive or overly burdensome.

3. Look at long-term value as well as day-to-day needs. Dr. Cohn says hospitals frequently prioritize day-to-day needs over long-term investment, particularly when dealing with complex problems that involve multiple departments. “We get so focused on day-to-day and month-to-month department budgets that we forget to step back and look at the overall cost structure,” he says. For example, using mid-level providers to facilitate physicians’ discharging their patients earlier in the day and on weekends can drop overall length of hospital stay dramatically.

4. Eliminate non-value-added care. Dr. Cohn estimates that 40 percent of the medical care provided in the United States may not add value, based on reports from The Dartmouth Institute for Health Policy and Clinical Practice. A study released by the American Academy of Orthopedic Surgeons in February found that 96 percent of orthopedic surgeons practice defensive medicine, with 24 percent of tests being ordered for defensive reasons and without significant benefit to patients. Another 35 percent of specialist referrals by orthopedic surgeons were motivated by defensive medicine. If healthcare is to move towards “value-based” rather than “volume-based” healthcare, physicians need to work together to remove unnecessary steps in the care process, Dr. Cohn says. “I think we are recognizing that sometimes providing more care is not necessarily in a patient’s best interest,” he says. “Finding a way to increase the number of patients who receive operations for low back pain may not necessarily increase patients’ ability to do daily activities, and it certainly increases cost.”

When a department requests another FTE, he recommends gathering all the workers involved in that aspect of care and determining who does what. A good way to streamline healthcare practice is to take a bunch of post-it notes and write down every step in the patient care process. Then put all the post-it notes on a wall, step back and determine which steps are unnecessary, consolidating the steps to make sure that each is adding value. “We often get so busy that we just add steps to the process rather than looking at this as an opportunity to improve the care process,” he says.

He says the major medical centers in Indianapolis decided to collaborate on quality and safety measures that would improve care. “They looked at all the steps involved in giving insulin to diabetics and found there were 23 non-value-added steps they could remove and thereby decreased cost and improved outcomes,” he says. This is particularly important because the likelihood of error increases with every step added to the care process.

5. Encourage patients to make better decisions about their health. Dr. Cohn cites a 2002 Health Affairs study that found the contribution of medical care to longevity is only about 10 percent, compared to 40 percent for patient behavioral patterns. This means that while an emphasis on reducing hospital adverse events is important, it is also crucial to encourage patients to adopt a healthy lifestyle outside the hospital walls. “The biggest contribution to patient longevity involved the decisions patients make — about exercise, food, tobacco, seatbelt use, and whether those with multiple partners use protection,” Dr. Cohn says.

He says patients in patient-centered medical homes learn that they don’t have to have a doctor’s appointment to improve their health. “You give the patient the resource of people whose time may not be as impacted as physicians — for example, health coaches, dieticians, physical therapists, track their behavior, and hold them accountable” he says. Patients need to be reminded at every encounter that they have the biggest impact on their own health.

Healthcare is a dynamic industry, in which it can sometimes feel as if change is the only constant. An overwhelming amount of information floods administrators on a daily basis, and there is simply not enough time to take it all in. Nonetheless, it is vitally important for early careerists and more experienced individuals alike to adapt to the transforming environment. Identifying and understanding trends is key, but this is easier said than done. Developing a plan to filter relevant information and utilize appropriate sources is necessary. As the great Peter Drucker said, “Today knowledge has power. It controls access to opportunity and advancement.” Gaining the knowledge most pertinent to personal career goals can help facilitate career advancement.Having a plan
Creating a career development plan outlining future goals must be the first step if you do not already have one. This plan should include strengths and weaknesses to help understand where your talents lie. Being able to use and grow your strengths is a key to success. Having a plan for how to acquire the knowledge you will need to cultivate these assets is easy to overlook, but is just as important. Personalizing how you stay current with your professional goals will help to narrow your focus on the vast array of resources available. Once a plan is in place, you can concentrate on topics related to your areas of interest. Information gathered should be relevant to both your career and your organization. Gaining knowledge that adds value should always be a priority. This will allow you to stay current and informed without wasting precious time on non-essential reading.

Making the commitment
Staying current and up to date must be a daily commitment, which is often a task valued in theory and forgotten in practice. This is why you should devote at least 15 minutes every day to reading about current trends in your industry. It can be tough to allocate any amount of free time due to busy schedules, but it will pay off in the end. Specifying a certain time of the day for reading may help, such during a daily commute or immediately after lunch each day. The key is making the commitment. Many successful individuals spend much more than 15 minutes every day staying current. As you grow more familiar with the process, attempt to increase your daily dosage of reading material. You may also find opportunities to catch up on heavier reading while waiting at the airport or when stuck at the dentist’s office. Maintaining a file of earmarked articles for future reading can aid this process for some. But for others, this may cause reading material to simply accumulate and go unread. Developing a system that works for you is the best strategy. Still, this should be in addition to a daily routine of reading which serves not only as a source of valuable information but also as a reminder to look outward and ahead.

Sources for national issues and developments
Keeping a finger on the pulse of the industry at a national level is important. It is easy to find all of your attention focused on your local market, but this can be detrimental to your organization and career. Looming federal policy changes, for example, can have a direct impact. The reliance of healthcare on constantly evolving technologies mandates continual learning for administrators. Innovation is often inspired from external sources, sometimes even from other industries. According to Peter Drucker, “The entrepreneur always searches for change, responds to it, and exploits it as an opportunity.” While his statement aptly describes entrepreneurs, it also highlights the importance of foresight and adaptation. Awareness of industry-wide issues and developments is crucial to contending in a competitive market.