Title Decision Support In The Emerging Pay-For-Value World: An Essential Element Of Market Place Success Decision Support In The Emerging Pay-For-Value World 1 What Is Driving The Need For Decision Support? The Increasingly Pay-For-Value World Of Health & Human Service Organizations The Patient Protection and Affordable Care Act (PPACA) has sparked a revolution: health care is shifting from a fee-for-service (“pay-for-volume”) model to one in which services are reimbursed based upon the health value they bring to the consumer (“pay-for-value”). In this new market, payers and consumers are evaluated for value against the yardstick of “The Triple Aim:” better care, reduced costs, and improved patient satisfaction.i Transition From A Fee-for-Service to Pay-for-Performance Reimbursement Case Rates & Capitation & Pay-For- Fee-For-Service Bundled Population Performance Payments Payments (P4P) While the U.S. health and human services system has seen change before, a perfect storm of four market factors resulting from this revolution drives change in the competitive market positioning of every stakeholder organization in the field: ii • PPACA’s limitations on health plan profitability • Consumer and payer search for “value” in health purchases • The shift to value-based reimbursement • The merging roles of care management and service delivery organizationsiii Each of these factors alone presents strategic challenges. Combined, these factors have created a new market environment that demands new management team skills and organizational infrastructure of provider organizations to remain competitive and viable. The PPACA limits health insurance premium dollars spent on infrastructure or profit by any health plan or at-risk care management organization; the remaining dollars are targeted for directly improving health, a responsibility that falls to the health care provider.iv In addition, the PPACA disallows annual and lifetime limits for consumer care, bringing with this paradigm shift even more exposure and responsibility for the health of consumers to provider organizations. The health of consumers is now directly tied to Decision Support In The Emerging Pay-For-Value World 2 provider reimbursement, and therefore presents a new kind of financial risk. Gone are the days when prior authorization and utilization processes were sufficient to manage the care of consumers with higher health care needs. Efficient, effective solutions must be implemented with better and less labor intensive tools. In addition, Federal and state governments, employers, and consumers – health care payers – have been hard hit with rising health care expenses. A combination of more advanced (and more expensive) health care technologies, the extended lifespan of Americans, and a rise in the prevalence of chronic diseases, have pushed U.S. health care spending to 17% of the Gross Knowledge is power – v Domestic Product. At that macroeconomic level, health but only if it can be care spending cannot increase or competitiveness is in analyzed quickly and jeopardy – which has touched off the search for value in health care purchases. The question – how to get more and efficiently from a better outcomes without spending more money? deluge of data. Accountable care organizations in Medicare and health homes in Medicaid started just five years ago. Today there are over 700 accountable care organizations (ACOs) and more the 8,000 primary care practices that are accredited as medical homes in the U.S.vi – and these new care management systems span all payers, from Medicare and Medicaid to most commercial plans. What these new systems share is the move to integrated “whole person” care management and the use of value-based reimbursements.vii Both integration and value-based reimbursement have changed not only how the delivery system is organized, but what state-of-the-art health and human service organizations need for an information infrastructure to remain competitive. Last, but certainly not least, is an unintended consequence of the pursuit of value – the merging roles of health plans – traditionally were only care management organizations – and service provider organizations – traditionally were financed in a pay-for-volume model.viii As provider organizations move to more advanced pay-for-value arrangements, they assume more of the financial risk that was traditionally held by health plans and, by necessity, assume more of the functions that were traditionally held by care management organizations. This traditional specialty-specific horizontal ‘carve out’ model of health care financing is being replaced by a complex integrated model with a complicated and cascading set of gainsharing and risk-sharing arrangements.ix What is needed for organizations – traditional health plans, care management organizations, and service provider organizations – to succeed in this new pay-for-value- world? The future belongs to the organizations with the most data the fastest – data that are organized for rapid management decision-making and action. Decision Support In The Emerging Pay-For-Value World 3 EHRs, Data Analytics & Decision Support: Best Practice Informatics For A Value-Based World So how do organizations develop the information infrastructure they need for success in a value-based world? To get data fast – in a way that provides insight for management – forward-looking organizations need an informatics infrastructure with three key elements: a fully-functional electronic health recordkeeping system, a data analytics platform, and decision support tools.x Actionable Insights Driven By EHR, Data Analytics & Decision Support Tools Working Together Full EHR Functionality Data Analytics Platform Decision Support Tools The executive teams of many provider organizations struggling to get EHR functionality to where it needs to be for management of service delivery will be surprised to learn that an EHR is not enough for a pay-for-value environment – unless your organization is not going to participate in pay-for-value contracting. Understanding the analytic capabilities and the decision support tools that are needed – and their relationship to the EHR system – is key to success in the emerging service delivery models. Decision Support In The Emerging Pay-For-Value World 4 Electronic Health Recordkeeping Systems The EHR is essential infrastructure for consumer care delivery. The focus of the EHR is to provide a longitudinal record of consumer care delivery within a health care provider organization or health care system – and with interoperability, connecting the health care records for a single consumer across health care provider organizations. EHRs create a record of each consumer encounter with the health care systemxi – and with it, the ability to submit an invoice for that encounter – exactly what is needed in a pay-for-volume, fee- for-service health care system. What EHRs do not have is the native ability to manage value-based financing or value- based reimbursement arrangements. With that regard, EHRs fall short in three key areas: • EHRs do not provide population health aggregation of data for identification of trends nor the ability to compare agency-based consumer data comparatively across other populations outside of the agency based system • Most EHRs do not have the ability to conduct statistical analysis of a wide array of data, to identify trends, to track current activity patterns, or to project future scenarios (the analytics) • Few EHRs have tools that link current research on best practices, evidence-based practices, and comparative effectiveness to facilitate proactive management decision making (the decision support tools) In the new value-based world, the ability to use the data in an EHR, with other systems’ EHR data and data from other sources, is the factor that will differentiate the successful from the non-competitive health and human service organizations.xii Data Analytics Platforms If you have data, do you have analytics? The answer is no. Analytics is the ability to use the data – to conduct statistical analysis of the data to identify meaningful patterns and generate insights from that data.xiii And for the many provider organizations moving to some type of care management role with value-based reimbursement, the next step in their information evolution is to add the ability to analyze data. To move ahead with the most fundamental of metrics-based management, management teams need analytics to summarize their existing data – whether clinical, administrative, and/or financial. And, as management teams get more skilled using analytics, their ‘view’ of the information moves from retrospective (what happened) to proactive (what is happening) to predictive (what is going to happen). With each step in this evolution, the competitive advantage of the organization increases. Decision Support In The Emerging Pay-For-Value World 5 Evolution Of Analytics Use Among Management Teams Retrospective Proactive Predictive • What • What is • What is happened happening going to happen So how are competitive health and human service organizations using data analytics? Here are a few examples. Flagging Non-Standard Care Non-standard care often signifies waste, as well as treatment practices for which there is no evidence of effectiveness. Identifying patterns of non-standard care that can be improved at the population level and treatment anomalies at the individual level permits agencies and clinicians to further evaluate practices in the context of population health