10 steps to change healthcare delivery and save money

A new report walks healthcare leaders through the necessary steps to change the way they deliver healthcare by improving outcomes and saving money without cutting fees to providers or benefits to patients.

The Center for Healthcare Quality & Payment Reform's new guide, Making the Business Case for Payment and Delivery Reform, identifies 10 steps that industry leaders can take to redesign healthcare and payment systems to improve quality and efficiency, while saving billions of dollars by avoiding unnecessary tests, procedures, emergency room visits and hospitalizations.

The report--funded by the Robert Wood Johnson Foundation--recommends 10 steps, as well as a hypothetical example of a business case for a physician practice initiative to improve care for patients with chronic disease and reduce avoidable emergency room visits and hospitalizations.

The steps include:

  1. Define the planned change in care and the expected results. Consider the patient population, types of patient care changes, which payers and purchasers the changes will involve, the expected timeframe and any transition costs.

  2. Estimate how the type and volume of services will change. Consider whether the changes will provide a service that isn't currently paid for, whether the changes will provide more or less of a service than is currently paid for and whether providing the current service in a different way changes its costs.

  3. Determine how payments and revenue will change under the current payment system. For this step, assume that only the current payment system in place. Then separately determine the payments/revenue for each provider organization and purchaser/payer.

  4. Determine how the costs of services will change. Use a cost model to identify the fixed costs, semi-variable costs associated with the service and how they will change based on the number of patients served or the number of services delivered.

  5. Calculate the changes in operating margins for providers. Based on the previous steps, determine whether the plan will provide equal or better operating margins, lower the positive operating margins or will mean negative operating margins.

  6. Calculate the changes in payment that providers need. If the operating margin is lower or negative under the proposed change in care, you must then determine what type of payment change is necessary to restore the margin.

  7. Determine whether a business case exists for both purchasers and providers. Consider whether the plan results in no payment changes, whether it lowers total spending or whether it would increase spending but achieve better outcomes.

  8. Refine the changes in care to improve the business case. If necessary, improve the business case by eliminating unnecessary or low-value components of the proposed sets of services, reducing the cost of delivering the proposed services or targeting the services to a different patient population.

  9. Analyze the impacts of deviations from planned care and expected outcomes. Consider the impact on services, outcomes and payments, and whether there is a potential harm scenario that indicates a change is necessary.

  10. Design a payment model to pay adequately for desired services, desired outcomes, and controls variation and risk. Make sure a payment plan provides adequate payment so the provider has the flexibility and ability to deliver the planned services, offers accountability to successfully achieve the intended outcomes, as well as protects the provider against inappropriate financial risk.

To learn more:
- here's the report (.pdf)

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