How healthcare providers can make value-based care turn a profit

Although many organizations are hesitant to shift from volume-based care to value-based care due to the potential loss of revenue, healthcare executives can draw inspiration from innovative providers who are farther along in the process. 

Intermountain Health Group and the Mayo Clinic are two examples of providers that experienced short-term financial hits but in the long run have made great strides in quality patient care, according to a Harvard Business Review article. 

Intermountain clinics provide its patient care patients with full mental and behavioral healthcare screenings and will coordinate care and direct them to the appropriate follow-up care. Now, 15 years into the program, patient outcomes are improving and costs per patient are falling, wrote Laura S. Kaiser, executive vice president and chief operating officer at Intermountain Healthcare, and Thomas H. Lee, M.D., chief medical officer at Press Ganey Associates. 

Furthermore, they said, Mayo Clinic surgeons have eliminated the need for a repeat lumpectomy in 96 percent of the cases because they work closely with the pathology lab to determine whether all the cancer has been removed. A study of five years of lumpectomy data shows that the 30-day reoperation rate at Mayor was 3.6 percent, compared to 13.2 percent nationally. The result: Mayo's costs for surgery are higher in the short term, and it earns less revenue from follow-up operations. But it reduces overall medical costs, and the patient gets peace of mind more quickly.

Both provider organizations "used process improvements to boost quality of care for patients: better outcomes, an enhanced care experience, lower anxiety, less wasted time, and fewer health risks. When the results became clear, each effort also fostered pride and teamwork, thereby reducing employee turnover," they wrote. 

In the short term, they said, some of these programs cost providers income, but ultimately saved money as levels of patient acuity decreased and the need for follow-up procedures and readmissions was reduced. 

Rather than wait for the market to catch up, the authors urged institutions to be proactive and get ahead of the changes to come. "In short," they said, "we see a compelling business case for acting now to achieve value-based care without worrying about when the market will make the shift."

To learn more:
- here's the article.

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