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Aligning Incentives to Prepare for DifferentReimbursement Models 
CEO Summit Discussion Aligning Incentives to Prepare for Different Reimbursement Models Healthcare reform is no longer a question of "if;" it is now a question of "when." The impetus for reform is clearly the government's need to rein in skyrocketing costs. The challenge: how to make sure reform isn't just about cutting cost. To ensure quality in a post-reform world, care delivery must also change. To use an analogy from the automobile industry, today every "car" that comes off the assembly line has different parts in it based on what the physician orders. The price is set, and hospitals generally have little influence over the parts or resulting cost. If we can't figure out how to align physician incentives with hospitals and other providers, how can we improve quality and demonstrate performance while driving further cost out of the system? Influence Physician Decision-making To influence decision-making based on quality and reimbursement, we must get past computerized provider order entry (CPOE) to physician documentation with real-time concurrent coding. And we need quantifiable, real-time data on treatment efficacy. It's much easier to influence physician behavior when you can say more than "you have to do this because the government measures it." Redesign Care Models Hospitals and health systems have been deploying Lean Six Sigma and other process redesign methodologies for many years. Now the need is for true clinical redesign. Organizations are tackling clinical redesign in various ways:  One provider is focused on reducing its biggest expense: nursing cost. A two-year process thatinvolves optimizing its staffing mix and using a team model has been a big factor in improving the hospital's financial situation. Another provider has been using hospitalists for years, describing it as "the best thing we'veever done." The hospitalists make regular rounds and make timely discharges possible. They work closely as a team, their clinical documentation meets regulatory requirements, and patients receive better care. A third provider has standardized more than 400 orders for CPOE using evidence-basedmedicine. The next step is to track the use of those orders to actual practice and determine how much of the care provided is backed up by evidence. It may not show up in length of stay, but it should show up in total cost per day. The focus in the next few years will be to align employed-physician incentives, using analytics to connect the dots and drill down to CPOE outliers and to identify best practices. Prepare for New Payment Models Incentives and payment models must impel health and wellness rather than acute care. Emerging payment models include: Pay for performance: While generally considered well-intentioned, most participants believecare may be rationed if widespread evidence-based medicine and aligned incentives are not foundational to care delivery and management. Nonpayment for readmission: Organizations are responding by examining data, determiningroot causes, developing strategies to address deficiencies within their control, and exerting greater influence over post-acute patient care and behavior. Bundled payments: Most participants see bundled payments as problematic forcommunity-based care. Among acute-care providers, it's difficult to understand which post-acute care providers really do a good job and are cost-effective. Success demands competency in care coordination. Disease Management Is Critical Healthcare today is about utilization. Healthcare transformation demands incentives for wellness. Organizations are moving toward this new paradigm in many ways, including giving their own employees incentives to stop smoking and manage high blood pressure and other common chronic conditions. Other efforts cited included piloting the medical home concept, either as a collaborative in the community or in conjunction with national organizations like the Robert Wood Johnson Foundation. One organization went so far as to establish a nurse leader as vice president of care coordination to help align and coordinate community care. SUMMARY: Preparing for Different Reimbursement Models Payment reduction isn't healthcare reform; it's payment reduction To improve quality and demonstrate performance while driving cost outof the system, hospitals and other providers must be sure physician incentives are aligned with their own To cut costs, redesign care — and start with nursing Selecting the most effective and efficient post-acute care partners iscritical for bundled payment Organizations must find better, less expensive ways to provide careregardless of what the government does
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