HFMA News

Analytics Will Smooth the Path to Value-Based Care

Moving from a fee-for-service model to a value-based model will profoundly affect the economics of health care. Data analytics will become more focused on predicting the future in this new environment, according to an expert in that field.

Health care organizations have collected data for decades, but most of the information was used to create reports that showed leaders what happened in the past 30 or 90 days. To succeed in the value model, leaders will need a more sophisticated understanding of the data that point to future opportunities for savings and revenue, according to a presentation at the Healthcare Financial Management Association’s 2015 National Institute.

“As you move out of fee-for-service and into a value model, you get something that looks more like other businesses that take on risk,” said Graham Hughes, MD, chief medical officer of the SAS Center for Health Analytics & Insights. “With the value model, money is at risk based on both quality and costs of care. You are dealing with a much more complex situation. As soon you start working with risk, you can’t work it out on the back of a napkin.”

To help health care organizations take advantage of data analysis, those working in the field are creating systems that can analyze more data, create more information from those data, and do it all more quickly, Hughes said.

Hughes’ presentation was titled “Taking Analytics to the Next Level — Five Key Strategies.” The strategies, which he called “pillars,” are as follows:

• Gain an understanding of the risks and rewards of the new payment models. This step involves examining how current revenue streams will change and how the organization can model those revenue streams in the future. It may also involve learning from other industries that have experience facing similar risks.
• Understand care quality and outcomes, and identify patients who are most in need of intervention. “I see this as a shift left, where left is healthy and right is illness,” Hughes explained. By using EHRs, claims data, geo-socioeconomic data, and other information sources, the health care organization can identify patients at risk of expensive medical events and intervene in advance.
• Identify waste and inefficiency. Hughes said some estimates suggest that one-third of health care spending is wasteful. “This is a matter of looking at the supply chain, throughput, [emergency department] utilization, cancellations of appointments, etc.,” Hughes said. “It’s basically the Toyota Lean model of identifying waste and opportunities to reduce waste.”
• Individualize treatment. This approach means paying attention to individuals continuously, Hughes said, not just when they appear in the doctor’s office, and tailoring care plans to fit their preferences, risks, health issues, and other characteristics.
• Apply an “enterprise decisioning fabric” to your system. This is a foundation of analytic capabilities that ties together the disparate data sources. “Imagine an orchestra,” Hughes said. “Rather than having all the members playing their own separate tunes, this fabric orchestrates and choreographs the players.”

Most health care organizations already have some of the infrastructure needed for each of the five strategies, Hughes said. “The challenge is that it is now separate instruments playing different tunes.”

— Source: Healthcare Financial Management Association