Budgeting For Technology To Support Value-Based Care

Technology expenditures for health and human service organizations used to be an afterthought. A few decades ago, the technology required was focused on relatively inexpensive administrative functions, but that has changed.

Technology is now strategic and mandatory – the ability to leverage technology is now essential to competitive advantage and strategic success.

And it’s expensive. Stats on implementing an electronic health record (EHR) range from $15,000 to $70,000 per provider. Budgeting for technology is no longer optional – and shouldn’t be done in isolation by tech staff.

Ray Wolfe, JD, OPEN MINDS senior associate, outlines best practices for budgeting. First, assess what technology functionality is mandatory for current operations and what investments are required for future strategy. “Whether we think we can afford it or not, whether we can manage it—technology, and especially an EHR—is a mandatory purchase. This is something we simply have to do,” he said.

EHRs enhance the clinical experience and improve back-end efficiencies, Mr. Wolfe said. For example, EHR dashboards allow teams to shift from an intuitive, creative approach to medicine “when we thought we knew best and everyone had their own approach,” to capturing relevant and meaningful data at each patient interaction. “We can assess whether what we’re doing is truly helpful and, if not, change it,” said Mr. Wolfe. “That’s impossible to do without a tech tool.”

And what you can’t assess, you can’t be reimbursed for by health plans when negotiating contracts.

Costs fall into two buckets: Upfront (the biggest investment), which includes training, equipment, and implementation; and ongoing costs that include license fees, technical support, hardware, staffing, and application specialists. And you need to show the rationale behind the expenditures –the return-on-investment, which can add 3% to 5% to the bottom line. An EHR is not an expense for its own sake, or for the sake of technology – it’s to help organizations improve both clinical care and financial results.

The key is to remember that with technology purchases, “You don’t get what you pay for; you only have the opportunity to get what you pay for,” which is why a strategic approach matters. It also begs the question, does your organization have the capital required to make this investment? Or, as Mr. Wolfe, asked, can you afford not to?

To answer that question, executives should review assets-to-debt and debt-to-equity ratios to ensure they don’t borrow more than they should to finance technology. Consider debt to equity (well-run organizations have a larger equity-to-debt share with a ratio of 1 or less) and compare assets to debt (you want to see a ratio of 2 to 1 or better).

And ask how effectively the organization covers the costs of liability. “You need a 2-to-1 ratio,” said Mr. Wolfe. If assets are higher than 2 and the assets-to-debt ratio is less than 1, you have assets you can use for an EHR system purchase, the costs of which can be spread out over several years.

When you consider the upfront cost of technology, you must find a way to manage it within these ratios. Most executives underestimate them, warned Mr. Wolfe. But don’t forget cost savings in this equation—from cloud storage to outsourcing tech staff, improved productivity and collecting 95% of what is billed.

Adding up cost savings associated with technology investments reinforces what a growing number of subject matter experts call a mandatory investment in EHRs. This way of thinking will ensure health and human service agencies survive an increasingly competitive market that requires sophisticated data collection and reporting.

How To Build Value-Based Payer Partnerships: An OPEN MINDS Executive Seminar On Best Practices In Marketing, Negotiating & Contracting With Health Plans — Best Practices in Payer Negotiating

OPEN MINDS Senior Associate Paul Duck delivered this seminar at The 2020 OPEN MINDS Performance Management Institute in Clearwater Beach, FL on February 12th, 2020. In this seminar, we discussed how to start strategic conversations with health plans, how to demonstrate your organization’s value in way that will capture health plan’s interest, and how to secure and optimize service agreements with health plans. The presentation has been broken into four parts, this page contains Part 4: Best Practices in Payer Negotiating.

Presentation Download (PDF)

Click here for related resources:

Part 1 — Context of Behavioral Health

Part 2 — Best Practices in Marketing

Part 3 — Best Practices in Contracting With Health Plans

How To Build Value-Based Payer Partnerships: An OPEN MINDS Executive Seminar On Best Practices In Marketing, Negotiating & Contracting With Health Plans — Best Practices in Contracting With Health Plans

OPEN MINDS Senior Associate Paul Duck delivered this seminar at The 2020 OPEN MINDS Performance Management Institute in Clearwater Beach, FL on February 12th, 2020. In this seminar, we discussed how to start strategic conversations with health plans, how to demonstrate your organization’s value in way that will capture health plan’s interest, and how to secure and optimize service agreements with health plans. The presentation has been broken into four parts, this page contains Part 3: Best Practices in Contracting With Health Plans.

Presentation Download (PDF)

Click here for related resources:

Part 1 — Context of Behavioral Health

Part 2 — Best Practices in Marketing

Part 4 — Best Practices in Payer Negotiating

How To Build Value-Based Payer Partnerships: An OPEN MINDS Executive Seminar On Best Practices In Marketing, Negotiating & Contracting With Health Plans — Best Practices in Marketing

OPEN MINDS Senior Associate Paul Duck delivered this seminar at The 2020 OPEN MINDS Performance Management Institute in Clearwater Beach, FL on February 12th, 2020. In this seminar, we discussed how to start strategic conversations with health plans, how to demonstrate your organization’s value in way that will capture health plan’s interest, and how to secure and optimize service agreements with health plans. The presentation has been broken into four parts, this page contains Part 2: Best Practices in Marketing.

Presentation Download (PDF)

Click here for related resources:

Part 1 — Context of Behavioral Health

Part 3 — Best Practices in Contracting With Health Plans

Part 4 — Best Practices in Payer Negotiating

How To Build Value-Based Payer Partnerships: An OPEN MINDS Executive Seminar On Best Practices In Marketing, Negotiating & Contracting With Health Plans — Context of Behavioral Health

OPEN MINDS Senior Associate Paul Duck delivered this seminar at The 2020 OPEN MINDS Performance Management Institute in Clearwater Beach, FL on February 12th, 2020. In this seminar, we discussed how to start strategic conversations with health plans, how to demonstrate your organization’s value in way that will capture health plan’s interest, and how to secure and optimize service agreements with health plans. The presentation has been broken into four parts, this page contains Part 1: Context of Behavioral Health.

Presentation Download (PDF)

Click here for related resources:

Part 2 — Best Practices in Marketing

Part 3 — Best Practices in Contracting With Health Plans

Part 4 — Best Practices in Payer Negotiating

Navigating the Path to Value-Based Care: The Journey to Improved Clinical Outcomes

Behavioral health organizations have more clinical data at their fingertips than ever before — but are they getting maximum value? This webinar will demonstrate effective methods to improve clinical performance and client outcomes through more targeted data management.

Upon completion of this webinar, attendees will:

  • Gain a better understanding of how value-based care requirements are changing how behavioral health organizations need to be thinking about clinical outcomes
  • Learn the different components of a measurement framework that applies to their organization
  • Discover ways to incorporate data collection into their clinical workflows
  • Explore actionable insights from the data collected in order to improve the quality of care being delivered

Download Webinar

A Beginners Guide To Value Based Reimbursement: Five Things You Should Know

  1. Behavioral Health Is In Transition From Volume Based Care To Value Based Care

Healthcare reimbursement models have shifted away from volume-based care, sometimes called fee-for-service, where a provider is paid a fee for each service rendered. The current trend is toward value-based care, defined as reimbursement that is directly linked to performance on cost, quality, and the patient’s experience of care.

This transition is already well established in physical health where, for instance Medicare has shifted almost 90% of payments for hospital visits into value-based models. While the numbers are not as robust in behavioral health, the percentage of value-based reimbursed care does continue to grow. Despite this growth, there are still many within the behavioral healthcare continuum that have not fully embraced the model. However, the transition is inevitable and one way to prepare is to understand the basic language and models of value- based care. Let’s start with terminology.

 

    1. Know Your VBR Payment Model Terminology

Know your reimbursement structures and the associated level of risk assumed by the provider organization, listed below in ascending order from low risk to high risk:

  • Performance-based Contracting-Contracts in which payment is linked to provider performance and require providers to undertake specific activities or meet certain benchmarks for services. These contracts may include incentives and penalties, caseloads and Pay for Performance.
  • Bundled & Episodic Rates-A single bulk payment for all services rendered to treat an individual for an identified condition during a specific time period. These payments also include case rates.
  • Shared Savings-Supplemental payments to providers if they successfully reduce health care spending for a defined patient population relative to a benchmark. The payment is a percentage of the net savings generated by the provider.
  • Shared Risk-An arrangement of shared financial responsibility between payer and provider that allows for cost control, efficiency of service use and quality. In this arrangement, both financial savings and losses are shared.
  • Capitation– A payment arrangement for health care service providers that pays a set amount for each enrolled person assigned to them, per time period, regardless of whether the person receives services during the period covered by the payment.
  • Capitation + Performance-based Contracting-This payment arrangement adds performance-based contracting as a supplemental incentive to a capitation contract.

 

  1. Develop an Incremental Plan For Risk With Payers

As noted above, the type of payment arrangement you choose will assume a certain level of financial risk for the provider. That level of assumed risk can be small, medium, or high as illustrated below. The upside of assuming risk is a higher payout for the provider. Of course, the downside is the potential to lose money.

  1. Assess Your Organization Readiness

Carefully assess your organization and determine the gaps in value-based care. OPEN MINDS has developed an online readiness assessment tool, sponsored by Carelogic. This tool offers you recommendations in your planning process in the following domains:

  • Provider Network Management – Strategies to enhance provider networks
  • Clinical Management & Clinical Performance Optimization – Data analyzed to drive clinical decision making
  • Consumer Access, Service Engagement – Processes to empower consumers and create engagement
  • Financial Management – Revenue cycle management and accounting procedures to support contracts
  • Technology & Reporting Infrastructure – Data leveraged to gain insight
  • Leadership & Governance – Alignment of strategy with infrastructure and resources

By Joining the Value Based Care for Behavioral Health online community, you have free access to the VBR Readiness Assessment. The assessment is available now at https://vbcforbh.com/vbr-assessment/

  1. Prepare for Challenges During Your Transition
  • Create a transition plan for your clinical and financial operations to support value-based care. Plan capital expenditures over time.
  • Identify patient experience and clinical outcome indicators that align with the expectations of your payers.
  • Establish evidence-based care, aligned with workflows, data entry and outcome reporting.
  • Adopt interoperable electronic health record systems and effective data analytics tools.
  • Eliminate waste, streamline workflows, rightsize staff, and align supplier contracts to reduce costs.

Even if Value Based Reimbursement (VBR) is not immediately imminent in your region, it is on the horizon. Prepare now by measuring and improving patient experience and patient outcomes. Begin to demonstrate improvement in the quality and efficiency of care that your organization provides. Your pathway to value-based care will improve the health and satisfaction of your consumers and the financial effectiveness to your organization.

The Evolution of Financial Management to Support Value Based Care, an Interview with George Braunstein, FACHE

George Braunstein, FACHE has 40 years of experience in the health and human service industry, leading both private and public organizations – in institutional and ambulatory settings. He has worked as Executive Director of the Fairfax-Falls Church Community Services Board (CSB) in Fairfax, Virginia and also was the Executive Director of the Chesterfield County Community Services Board. Mr. Braunstein also served as the Executive Director of Behavioral Health for Aurora Health Care in Milwaukee – the largest integrated health care system in Wisconsin with 13 hospitals, 20,000 employees and $1.5 billion in annual revenues.

Ahead of His Time

Starting with in the early 1990s, before NCQA and EHRs were well developed to support Value Based Reimbursement (VBR), George Braunstein was directing an HMO in Milwaukee overseeing behavioral health care. As was the trend at that time for HMOs, cost savings were based on limiting all services across the board. Said Braunstein, “We were struggling with a policy which was a denial of care to attempt to make the bottom line look better.” Despite the reduced services, overall costs were not necessarily declining. When Mr. Braunstein looked at this trend, he had a different idea. Using only simple algorithms and rudimentary financial data, Mr. Braunstein and a nationally based work group quickly realized that there was a “missing piece”, which he described as “how do we create value out of behavioral health”.

The solution was to set up a “single integrated model’ where behavioral health providers were embedded in the primary healthcare system. And instead of strict limits on services, George and his team looked for the most cost-effective ways to reach desired results. One relatively simple strategy was to not limit outpatient behavioral health therapy which had the direct effect of reducing expensive inpatient readmission rates. Mr. Braunstein and his team closely monitored both costs and outcomes and developed a 10 percent withhold reimbursement to incentivize the staff to achieve desired clinical outcomes. As noted by Braunstein, he saw “the need for some kind of continuous quality improvement tool.” The program succeeded. In its first year, Mr. Braunstein noted a two percent pay out and seven percent payout in the second year.

Lessons Learned

This early success laid the groundwork for more sophisticated VBR processes that Mr. Braunstein would later develop in his career. For instance, the implementation of higher financial risk accountable care organizations and the implementation of case rates and bundled rates, to name a few. While these VBR models became more sophisticated, the underlying principles that needed to be in place for VBR to work remain the same. Some of the lessons learned include:

  • Understand your baseline data, both clinical and financial, and make that data available at the “point of impact.” The front-line providers need to be in the loop.
  • Stay on top of the data. Organizations can have a great deal of data but without built-in processes for sharing and accountability, VBR will fail.
  • Be patient. Most behavioral healthcare providers are “mission driven” and may not see the ‘value’ in VBR. Mr. Braunstein noted that although changing organizational culture can take years, continuously providing clinical and financial updates on improvement to providers will help them develop a more “entrepreneurial approach” to their practices too.

When asked what he considered to be the largest barrier to creating a Value Based culture, Mr. Braunstein noted that an overly controlling corporate environment is often hard to overcome. As noted, the transition to VBR seldom occurs overnight and there can be failures. He recommends that you carefully work with your board to ensure that they are both mission-driven and entrepreneurial in their outlook. Finally, some bandwidth for program development and, occasionally, a failure is a necessity for overall success.

Technology and VBR

One of the biggest changes Mr. Braunstein has seen since the early days of Value Based Reimbursement is the development of Electronic Health Records. He noted, “the data can be organized, both performance and financial, to adapt and improve”, more efficiently and allow you “to act more proactively”. Importantly, these systems allow for timely analysis of revenue cycles. As noted by Mr. Braunstein, with ever shrinking budgets in behavioral healthcare, the ability to identify and contain costs is the best way to maximize revenue.

Assessing Leadership & Staff Competencies in the Path to Value-Based Care, an Interview with OPEN MINDS Senior Associate Drew Digiovanni

Preparing your organization for the shift to a Value Based Reimbursement (VBR) model is a unique challenge for behavioral health organizations. The conceptual underpinning of VBR is relatively simple: payment based on improved outcomes. However, the implementation of value-based programming presents a long list of competencies to manage care and population health in a new way. The challenge for leadership is to support providers in meeting these new market demands and yet maintain clinical integrity.

Drew Digiovanni is the former director of education with the Medical Group Management Association, where he served over 20,000 practice administrators in primary care, medical specialties and behavioral health. Drew also served as vice president of quality, supporting 150 health centers to provide value-based care for large employers. In his leadership and consulting roles, he has worked with hundreds of health systems around the county, assisting leadership and staff in developing VBR skills.

Drew noted that the first step in developing VBR within an organization is to, “assess the way we view leadership, clinical and staff competencies across the organization. Certainly, we’re having to shift from a focus on productivity to a focus on patient outcomes. And I think that people have been trained and have the skill sets for a productivity-based environment.” In doing this, it helps point of care providers to understand the market demands and the alignment of demands toward improved clinical outcomes.

A second challenge is shifting organizations to a data driven mindset. He noted that it is normal for organizations to resist this change. Noted Drew, “we’re trained to focus on people, not on data necessarily. And so we’ve got to step back and reduce the resistance to a data driven environment through competency development. Our competency development is as much based on attitudinal change as it is on gaining new knowledge and skills.“

Competencies of a CEO

A CEO doesn’t need to have the skills of their C-suite, but they do need to have enough skill to oversee those functions, including Finance, Operations, Human Resources, IT, Quality and Population Health, and Clinical Operations. Clinical leaders and business leaders often see the world through a different lens. The CEO who drives the leadership team to see through the lens of their counterpart helps the organization to support an outcomes-based culture.

Needs for Continuous Leadership Development

“A foundation for VBR, or any large initiative, is to provide leadership development and enhance conflict management skills.” Leaders can better facilitate change using leadership styles that engage clinicians and staff and empower them in the change process. Turf battles between legacy teams and new service line and care management teams may ensure, and conflict management is critical.

Clinician and Staff Development

Staff require education in five key areas: 1. A clear understanding of payer needs and demands; 2. Performance goals; 3. Evidence-based standards within the organization’s scope of behavioral health, clinical care and chronic care management; 4. Patient experience standards that will be measured and reported; 5. How to interpret key performance data. Drew further explains “in the old paradigm, we might hand a client or patient discharge instructions or other patient education information. In an outcome-based environment, staff competencies in working with patients with low literacy skills is essential to helping them comply and stay engaged to achieve our outcome goals.”

Staff education isn’t always focused on knowledge and skills. Changing attitude comes into play when shifting to an outcome focus. Clinicians and staff need to value the changes necessary to drive outcomes. Drew says, “attitude doesn’t change in one conversation and leaders should expect that multiple conversations happen to outline the benefits to organization sustainability and particularly to enhance patient care.”

Engagement with Data Monitoring Through Visual Management

Drew cautions that no program will work without a sound approach for data validation. There needs to be a process which establishes a standardized approach to care, and a focus on evidence-based practices. Said Drew, “I think that the leadership needs to think about what are the standards of care that are driving internal operations, and then looking at how we document and get data into our systems so that we have good data coming out of the system.” A key takeaway that Drew emphasized is that staff and leaders need to know how to configure the EMR to capture that data. The ability to update and customize the EMR will allow for agility to manage your value-based program.

A final thought is the need for investment. The first investment is in technology; however, the larger investment is in human resources. We need to make an investment to move towards value-based care, and part of that investment needs to be in competency development to address the gaps of our leaders, our clinicians and our staff. There’s going to be cost. It may seem like non-productive time to conduct education and training, but there is a return on investment if we help our teams come up to speed to support this new paradigm.”, says Drew. In the end, the marriage of agile technology with a well-trained workforce bodes well for success in this new value-based world.

Implementing Value-Based Care Through The Certified Community Behavioral Health Model: A Value Based Care Community Interview With Chad Van Houten

Implementing innovative service changes with a focus on value-based care and reimbursement often involves identifying how to provide more effective service outcomes through coordination-of-care and integration of services – internally and with other community providers. A good model for this change in focus is the Certified Community Behavioral Health Clinic (CCBHC). The CCBHC service model was created and funded on a demonstration basis with the Excellence in Mental Health Act (EMHA). The EMHA created a new Medicaid provider type requiring participating organizations to provide, or contract for, essential services for individuals needing behavioral health and substance use disorder services to ensure accessibility, care coordination, and service integration. Eight states were selected for participation in the two year demonstration beginning in 2017 – Minnesota, Missouri, Nevada, New Jersey, New York, Oklahoma, Oregon and Pennsylvania. We recently had the opportunity to talk with Chad Van Houten, Chief Financial Officer of Zumbro Valley Health Center, one of six CCBHCs that were created in Minnesota. Chad shared with us the opportunities and challenges of creating a new value-based service line.

Implementing a new innovative service creates challenges impacting culture, communications, and infrastructure. For Zumbro Valley Health Center, the model encompassed 60% of the program and 80% of clients across multiple programs, and involved almost all staff. A key requirement when reviewing current workflows was having open communication with staff, and continually asking the question, “Will this help improve client access?” Training sessions were implemented initially so that staff understood the new focus and requirement. Key consumer workflows were then redesigned, starting with intake and insurance coverage to determine whether consumers were covered by CCBHC services and funding, or another source. This caused therapists to begin to think about the services available to consumers based on their payer, and created more streamlined and better communication to maximize those services. Another challenge was keeping the state, as funder, in the loop with open communication. Pilot programs don’t always go as planned and unforeseen issues come up such as administrative bottlenecks, or conflict with other state mandates. Addressing these challenges required frequent pre-implementation and post-implementation meetings to identify unanticipated issues and collaborative work to identify solutions.

To address the significant shift in culture required by the new service model, leadership staff had to continually ask the question, “How does this impact staff?” This focus provided both an opportunity to identify issues, and engage staff in solutions to address those issues. Therefore, establishing a process for clear, open, and ongoing communication was critical. Helping staff understand how the design of the CCBHC would improve client outcomes created a common point for creating cultural and operational change.

Chad also described the changes in technology and data reporting necessary to create a focus on outcomes. The CCBHC reimbursement rate in Minnesota is a bundled rate based on the prospective (anticipated) cost of services and an estimate of potential consumers. A daily charge is created when a consumer receives one, or any number, of services in a day. Their EHR was already configured to work with bundled rates, however they engaged assistance to set up the new service and billing codes, ensuring that only one bill would be created daily per consumer. Getting the data needed to drive and report outcomes was the bigger part of the challenge of measuring quality outcomes. This entailed creating agreements and accepting data from other providers, and implementing a process for consumers to self-report information.

An important aspect of tracking data was having the right staff skills available. Zumbro Valley Health Center increased their resources in this area, hiring an analyst to work the clinical and financial data. This was critical in achieving their operational target since the reimbursement rate was based on anticipated costs, and tracking actual results to estimates ensured alignment with the operational plans. Precise plan execution was important to ensure that the estimated rate remained accurate for the future, for example, making sure that staff were hired when planned. Having a data analyst was helpful because that person had the knowledge and skills to manipulate large amounts of data to meaningfully inform staff about services and create the cost reporting required by the state.

To drive and monitor performance against contracted outcomes, the organization developed key metrics for each director of the organization. This involved a process of identifying outcome targets, determining data sources, and capturing and reporting data. Teams met bi-weekly, or monthly, as needed, to identify outcomes that were off course and collaborate on corrective actions. Chad came from a manufacturing background prior to behavioral health, so he was familiar with this focus on data. This focus was fairly new to the organization as a whole, so time was spent creating a data-driven culture – emphasizing the role of data to ensure the best outcomes – and the skills needed to work with data. These skills included capturing and analyzing the right data and sharing the results in a meaningful, informative dashboard for staff comprehension.

When asked to identify the two top lessons learned in implementing the CCBHC, Chad said, “When you implement, you think that you have a good process. But you need to stop periodically, and look at things from the consumer perspective. If something is cumbersome, then identify a new process. It’s all about access and making integrated services available when they are most needed.”

Because of the focus on consumer access – the services needed, when they are needed – along with care coordination, integration, and a focus on outcomes, Minnesota has committed resources, continued funding of the six CCBHC and plans to expanse the service model to two additional providers. For more on innovative value-based services, see:

Building An Infrastructure For Data-Driven Performance: An Executive Guide For Success In A Value-Based Market – https://vbcforbh.com/building-an-infrastructure-for-data-driven-performance-an-executive-guide-for-success-in-a-value-based-market/

Rate Setting For Value-Based Reimbursement: A Guide To Developing Capitated Payment Models – https://vbcforbh.com/021519ratesetting/

Value-Based Reimbursement: 3 Steps To Go From Idea To Action – https://vbcforbh.com/value-based-reimbursement-3-steps-go-idea-action/

Health Homes, Specialty Health Plans, CCBHCs. Oh My! – https://www.openminds.com/market-intelligence/executive-briefings/health-homes-specialty-health-plans-ccbhcs-oh-my/

Successfully Managing Bundled Rates—The Voice Of Experience – https://www.openminds.com/market-intelligence/executive-briefings/successfully-managing-bundled-rates-the-voice-of-experience/