By Ken Buchanan
Have you ever stopped for directions while traveling and heard the response, “You can’t get there from here”? With today’s ubiquitous GPS navigation devices, we rarely need to stop for directions. And no matter how complicated and convoluted, the GPS navigator will undoubtedly ensure that you can get to your destination from where you are.
Navigating a healthcare system through all the challenges of financial risk management in a value-based care (VBC) market can seem very similar to navigating through unfamiliar and constantly changing geography.
Where Are You?
Healthcare organizations have advanced significantly over the past several decades. In the early years of shared risk it was important to use paid claims, EMR and self-reported information (the GPS of the healthcare world) to gain a solid understanding of the current state of the system. Knowing where you are is certainly a fundamental starting point for navigation. However, it is neither directional nor strategic. As someone once said, “Wherever you go, there you are.”
Where Are You Going?
The next important advancement in managing financial risk for healthcare orgs was being able to forecast where they needed to be quarterly and annually to ensure profitability. Prospective risk modeling and sophisticated actuarial formulas enabled these organizations to establish strategic direction and financial goals with increasing clarity and confidence. A healthcare system managing risk in a VBC environment may determine that they need to increase reimbursement levels by five percent while decreasing medical claims by three percent. Are those reasonable goals? Are they achievable? Many of us know that setting goals for ourselves, like a New Year’s resolution, will end in failure without an action plan, a commitment to the strategy and a frequent measurement of our progress against our starting point.
A good VBC analytics system can manipulate financial models to help healthcare orgs set financial, clinical and infrastructure goals. An advanced VBC analytics system can even help to predict where the organization will go if no new strategies are implemented. But even those two capabilities, though important, will prove useless unless there is a roadmap to help navigate where they need to go. Just as a GPS system leads us directionally to our requested destination, a VBC system must provide actionable information to help navigate to the desired strategic goals.
How Do You Get There?
A good risk management strategy starts with knowing where we are and where we want to be. An advanced risk management strategy includes actionable options for how to get from where we are to where we want to be. And just as modern GPS systems offer multiple options for navigating to a destination (based on travel time, costs, obstructions, comfort, etc.), an advanced VBC analytics system should provide options for choosing the actionable paths to meeting a health organization’s strategic goals. Whether those paths involve improvements that are patient-driven, provider-driven or organization-driven, actionable information can identify actionable strategies. The healthcare org can select strategies that may include population health support, primary care coordination and referral management, provider outlier management and centers of excellence, organization growth options for filling specialty care gaps, models for bundling major intervention services like joint replacements, and stronger management of pharmacy protocols for specialty drugs, office injectables and formulary adherence.
If the healthcare data used for guiding strategy is not actionable down to a level of transactional detail, then it is no better than a GPS system that only shows you where you are and where you want to go. Unless you are supported in how to get there, you will likely only arrive at your destination by luck. An advanced VBC analytics system should never leave you thinking that “you can’t get there from here.”
If you need a guide to help you “get there,” give us a call.