Value-Based Purchasing Must Bring Healthcare Providers & Vendors Together

March 18, 2012
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Healthcare reform is the new normal. Change will be constant with continuous adjustments to projected regulations, but one mandate is here to stay: Pay for Performance CMS style…popularly known as Value-Based Purchasing (VBP), an offshoot of the Accountable Care Act.

Healthcare reform is the new normal. Change will be constant with continuous adjustments to projected regulations, but one mandate is here to stay: Pay for Performance CMS style…popularly known as Value-Based Purchasing (VBP), an offshoot of the Accountable Care Act.

That great American tradition, the lame duck session of congress, likely will generate nothing of substance impacting the rolling changes sweeping healthcare and especially VBP. So it’s time for healthcare providers to prepare to succeed in this new environment.  ModernHealthcare.com has a great post that shares perspective from providers who have taken the step to simulate a VBP report on the CMS QualityNet website to see where they stack up before the program officially begins. It’s a great first step for healthcare providers to come to grips with what VBP requires of them.

In essence, healthcare providers must compete against one another for reimbursement dollars they previously were receiving for simply reporting their accomplishments. Healthcare system management, patient outcomes and health status—as well as patient opinions of their healthcare experience—will determine how the reimbursement pie gets divided. It’s pure competition with very visible winners and losers.

For healthcare providers to succeed in this new world in 2013, organizations must be able to align with the following:

  •  Effective Quality, Utilization, Risk and Infection Management programs and practices throughout the entire system
  • Reliable performance improvement tools, programs and measures
  • Establishment of and adherence to best practical clinical guidelines and care pathways.
  • Operational efficiency and performance excellence
  • Solid clinician alignment with process
  • Impact on patient satisfaction

And the time is now for providers to turn to suppliers for assistance and answers about the true value and outcomes their products deliver.

Price will remain important. After all, provider revenues are shrinking while costs are growing, but the days of providers and vendors focused mainly on price won’t win the ACO battles building for 2013 and beyond. This is about true performance, impacts and outcomes for providers and vendors together.

What are some immediate changes I see in the relationship between providers and vendors as a result of value-based pricing?

  •  Standardization – An increase in equipment and system standardization to lower cost, drive productivity and eliminate unnecessary variations in the use of products that could deliver inconsistent patient experiences. Clinicians will be more intimately involved in purchasing decisions.
  • Intelligence – Providers will need to collaborate more with the supply chain on data collection to closely study utilization patterns, quality gaps and areas for better clinical outcomes and cost reduction.

I’ll close with a favorite quote from a recent Healthcare Finance News story about preparing for VBP, “Hospitals and health systems that don’t start to prepare now will pay those that do – literally.”

Are you talking to your vendors about value-based pricing?