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Do Case Managers Affect Value-Based Purchasing?

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Pat Stricker, RN, MEd, Senior Vice President, TCS Healthcare Technologies
Have you ever thought about what "value-based purchasing" really means and how it affects the role of the case manager?  At first thought, it would seem that the case manager’s role really doesn’t have anything to do with a new reimbursement model for health care providers; after all, case managers do not have any involvement in provider reimbursement, nor do they have anything to do with health care contracting or purchasing.  However, once we examine this in more detail, I think you will see that case managers actually play a very significant role in value-based purchasing (VBP).
For decades, the health care delivery system has dealt with inefficiencies, fragmentation, variations in quality and cost, and a goal to treat illness rather than improve health.  In addition, the cost of health care has been based on the quantity of services provided (fee-for-service), not on the quality of care, and attempts at restructuring the payment system to focus more on the quality has been very difficult.
The Affordable Care Act of 2010 (ACA) brought about numerous payment and delivery system reforms that addressed these needs.  For example, the Centers for Medicare and Medicaid Services (CMS) had a long-standing initiative to link the Medicare payment system to a value-based system to improve healthcare quality; the ACA made this a reality.  Since hospitals account for the largest share of Medicare spending, the ACA included the Inpatient Hospital Value-Based Purchasing Program (Section 3001 (a).  It rewards acute-care hospitals with incentive payments for the quality of care they provide to Medicare recipients, how closely best clinical practices are followed, and how well hospitals enhance patients’ experiences of care during their hospital stay.
However, VBP encompasses not only hospitals, but all providers, physicians, health plans, employers, and consumers.  Physicians and other providers are rewarded for positive patient outcomes, instead of merely paying for the number of services provided, as in the fee-for-service (FFS) model.  Their incentives are based on meeting physician performance standards.  The VBP reimbursement model is also used in other delivery systems, such as Accountable Care Organizations and Patient-Centered Medical Homes, to reward physicians for increasing quality and patient-focus, while reducing unnecessary costs.  

The Rand report on value-based purchasing programs describes VBP as a broad set of performance-based payment strategies that link financial incentives to providers’ performance on a set of defined measures. The National Business Coalition on Health says it as a strategy to measure, report, and reward excellence in health care delivery. It involves making decisions based on access, price, quality, efficiency, and alignment of incentives. The Value-Based Purchasing Guide describes it as a solution that can generate short-term savings by focusing on fundamentally changing the current health care delivery system.  It places the responsibility on the health care purchasers to make decisions based on quality, service and cost, rather than cost alone. This will result in a health care system based on health improvement and management, and a value-driven system in which ever-increasing quality of care is achieved at the lowest possible cost. The Case Management Model Act, which establishes the key elements of a comprehensive Case Management Program, also supports the goals of VBP because it promotes "cost-effective strategies that promote better quality, improved outcomes, fewer readmissions, and higher Consumer satisfaction."

VBP is built upon four key principles:

1. Standardized Performance Data Collection and Measurement
The performance of health plans, hospitals, physician groups, individual practitioners, and consumers (behaviors, lifestyle choices and chronic disease self-management) must be measured.  The performance measures should be based on actionable information regarding cost, quality, and appropriateness of care; answer the question: "Is care safe, timely, efficient, effective, equitable, and patient-centered?"  The answer to this question must be converted into useful, accessible information for informed decision making.  Measurement is impossible without the ability to access and aggregate data from multiple payer and community sources that include administrative, claims, clinical, and patient survey data.  And, since employers are offering financial incentives to employees for changing behavior and choosing higher-value providers, they need to ensure that employee health and productivity are measured and tracked to determine if the VBP strategies and incentives are effective.
2. Measurement Transparency and Public Reporting
Transparency in health care costs and quality are essential.  It is difficult for consumers to make value-based decisions without having validated price and quality information. Knowing the cost of procedures and visits before they occur, rather than after, and being aware of the quality of care they will receive, will help them make better decisions.  Regular and timely public reporting of provider performance through websites, report cards, member resources, and targeted mailings can be a significant motivator for performance improvement and a good way to guide consumers in making health care decisions.
3. Payment Innovation
"Pay for performance" reflects the principles found in the rest of our economy – cost should be related to quality. Provider reimbursements need to be based on demonstrated performance and desired outcomes. Previous FFS reimbursement incentivized providers to do more individual units of care, regardless of whether that care was efficient or effective.  Reimbursing for bundles of services, complete episodes of care, or achievement of desired outcomes, rewards providers for keeping patients healthy, not just treating their illnesses.

4. Informed Consumer Choice
A key element of VBP is individual consumer choice based on value. Consumers have many decisions to make regarding their health status and the cost and quality of care. Since consumers are typically more concerned about their own out-of-pocket cost, rather than the actual cost of procedures and services or the overall costs incurred by the health care system, they must be provided with clear information, incentives, and coaching to help them make better informed decisions.  Making decisions based on price alone might save money initially, but it is not a sound, long-term sustainable strategy. Consumers must also be encouraged to change their behaviors and self-manage their health.
Value-based purchasing is necessary to transform the health care delivery system into a high quality, affordable system.  Of course it is impossible to accomplish all of this immediately, so changes are being implemented over several years.     

Now let’s examine the role that case managers have in value-based purchasing. Since case managers work closely with the patient, family, providers and other members of the extended health care team, they play an integral role in ensuring that the key principles of VBP are accomplished.

While case managers may not be responsible for collecting and measuring the data, they are responsible for documenting all aspects of care and the information provided.  Some examples include: clinical information, gaps in care, symptom management, treatment options, education provided, patient interactions, behavior changes, lifestyle management, prevention and wellness care, nutrition, and medication management. Case managers also play a key role in monitoring hospital admissions for length of stay, and appropriateness and timeliness of services, as well as preventing readmissions by providing discharge instructions, managing transitions of care, arranging community resources, and providing follow-up and monitoring the patients closely after discharge.  Managing these processes and capturing this type of data ensures that the data will be available for collection and measurement.   
Case managers act as educators, coaches, and advocates for the patient and family, helping them understand and navigate the health care system.  They help patients understand their benefits and provide them with the information they need to make informed decisions about the type, quality, and cost of care they want to receive. The close relationship that is developed between the case manager and the patient and family enhances the patient’s satisfaction with the health care experience.        

All of these actions performed by case mangers ensure that the key principles of VBP are accomplished. That being said, the answer to whether or not case managers affect VBP is "Yes."  Case managers have a significant role in making VBP successful and their role will continue to evolve and expand, as case management becomes more integrated into provider practices and clinics.   
To contact Pat, email her at, or call her at (530) 886-1700, ext. 215.

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