Value-Based Care

Blazing the Trail from Volume to Value

Zachary Hafner
Advisory Board

The verdict is in: Transforming health care is harder than it looks, in part because we are navigating toward a mirage—a fuzzy vision of an idealized future state where low cost, high quality, ubiquitous access, and extraordinary customer experience are the norm. The challenge of course has been the absence of a roadmap for crossing the gulf between here and there, resulting in a proliferation of pilot programs and point solutions that touch different parts of the elephant but fall short of actually unifying the vision.

So what does the path look like, and what does it take to successfully travel it?

Succeeding in the new paradigm

At first glance, the cornerstones of the future state I mentioned previously seem like entirely separate pursuits. Lowering cost, improving quality, expanding access, and enhancing experience—what do these have in common? The answer lies in what it takes to achieve them. Consider these needs:

  • An aligned clinical front line that works seamlessly to deliver integrated, coordinated, evidence-based care.
  • Capability to match the resources of the health care ecosystem to the needs of the patient, including service consumption, availability, and sites of care.
  • Minimization of waste, which contributes so significantly to today’s high costs.
  • A commitment to the collaboration and communication necessary at all levels to truly improve in-the-moment experience and outcomes.

And sitting right in the middle of this mix: the chief medical officer.

In the November 2016 issue of Managed Care I explored the concept of the CMO as a critical contributor to the vitality and success of any health care enterprise. Today’s CMOs are facing a new normal, with responsibilities spanning not only traditional hospital spheres such as medical staff leadership and conventional “quality improvement,” but also newer terrains like population management, care coordination, and clinical IT. They are setting a new care standard, even in the gray areas of medicine where no clear guidelines exist today.

Key examples

Look at the programs that have emerged and continue to evolve, overtly linking financial outcomes to clinical transformation effectiveness. Several key examples:

  • CMS’ Medicare Shared Savings Program and Next Generation ACO programs, which encourage and incent collaboration longitudinally across the care continuum.
  • MACRA, with its associated push for physician payment linked to clinical quality and cost outcomes.
  • Medicare Advantage expansion, where success resides in care management of chronic conditions and consistency in performing activities that promote early detection and intervention.
  • Value-Based Purchasing, which rewards (or penalizes) the delivery system in large part based on patient experience.

Beyond government programs, the list of payer–provider partnerships established to bring innovation to care transformation grows longer every day.

Even with this much support and momentum pushing clinical transformation forward, it is not sufficient for today’s CMO to focus on such an unwieldy mandate. There needs to be an organizing theme that unifies this transformation and ties in the economic implications.

So today, I’m humbly declaring the CMO’s top priority for 2018 to be driving out unwarranted clinical variation. Pursuing this will require all of the elements I have discussed above. Achieving it will deliver substantial returns (of many kinds) to all stakeholders, most importantly patients.

The time has come to make our way from volume to value.

For CMOs, it is an exciting opportunity to take the lead in blazing a trail we are all eager to follow.

Zachary Hafner leads the Advisory Board’s strategy consulting practice.


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