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Customer Experience and Design

Leveraging Analytics for Hospital Value Based Purchasing

Value based purchasing in healthcare has been discussed several times on our blog, most recently in the posts “Taking back the reins: Value-Based Purchasing in Healthcare” and “Maximizing Financial Rewards from Hospital Value Based Purchasing.” Last month, Perficient’s Martin Sizemore also co-presented a webinar with CitiusTech called “Hospital Value Based Purchasing: Leveraging Analytics Platform for HVBP Prospective Payments.”

CMS intends to change the way they have paid in the past from passive payment model to an incentive based program, with the objective of improving the quality of healthcare and purchasing power. In order to accomplish this, CMS will take away payments from eligible hospitals then provide incentive paybacks. Hospitals will be able to take data they are already reporting on, add patient satisfaction results, and calculate their score to determine their payback amount. Manual tracking, which many hospitals are still using, is time consuming and does not allow time to make changes and improvements. Analytics solutions like Health BI provide analytical capabilities to help hospitals track their current scores compared to thresholds and benchmarks, identify improvement areas, and maximize incentives by continuous improvement.

Value based purchasing is mandatory for eligible hospitals. They stand to lose payments withheld if they do nothing to track and improve their performance. On top of that, if hospitals do not participate in VBP, they will be fined. On the other hand, there is the ability to earn incentives greater than the amount withheld. Earning back payments, especially over the amount withheld, requires planning and execution now to win in the future. What providers do today impacts what they will get as incentive payment in the future – now is the time to start.

Each year, the score calculated will be comprised of different increasing factors. For fiscal year 2013, 70% of the score is based off clinical measures and 30% off patient experience results. In FY 2014, there is an added focus on preventative measures for patients with the basic idea being to improve small things that can alter high costs of these things not being managed properly. FY 2015 includes an added focus on efficiency.

Scores are calculated by two measures: the achievement score and the improvement score. The achievement score is based on how a hospital’s performance compares to the performance of all other hospitals during the period. The improvement score is based on how a hospital’s current performance compares to its own prior performance. So, even if a hospital has not performed as well compare to other providers, they can still earn payment if they have improved over their prior performance.

Getting ahead of the competition from other hospitals is key to winning with VBP. Non-performing hospitals are going to lose money to hospitals that are performing. Providers need to know their score before it becomes a challenge for their organization to catch up. By using a BI and Analytics tools, hospitals can create a continuous improvement process. They can identify at-risk, inefficient, or wasteful areas and take corrective action to improve profitability. Know where your organization stands against the benchmark and adopting a culture of continuous improvement will be winning strategies.

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