Value-Based Models: Mindset over Money

This piece originally appears in Physicians' Money Digest.

“The importance is increasing on a weekly basis,” says Steven Spalding, MD, chief clinical integration and medical officer for Phoenix Children’s Hospital. And he’s not talking about good nutrition and a healthy lifestyle. Spalding is talking about how every week, more and more medical practices are transitioning from a fee-for-service model to value-based care. That’s a good thing, he says, because the goal of value-based care is to lower healthcare costs while improving quality and outcomes.

Jason Vargas, MD, an Arizona-based pediatrician with the Phoenix Children’s Care Network, says that as payers continue to abandon the fee-for-service model in favor of value-based contracts, providing that level of care is extremely important.

“And it’s extremely important that we have the infrastructure to provide that care,” Vargas adds.

Not Unlike Disney

That infrastructure Vargas refers to starts with hiring and training the appropriate staff. He says that from the moment a medical practice receptionist answers the phone, customer service needs to be foremost in their mind. “Kind of like the Disney way, all along the way,” he says. “It’s an advanced level of service. Listening, showing empathy, asking how we can help them in any way.”

Spalding says healthcare is a service industry, not unlike retail or restaurants. “And for a long time I’m not sure we realized that.” But over the last five to seven years, the increasing transparency around performance and the explosion of social media has brought an understanding of the importance of focusing on the patient experience. Part of that overall experience is the value patients and their families perceive they are receiving by accessing those services.

“I think the transparency offered by social media is going to have a very significant, transformative impact on healthcare, and evaluating care delivery,” he says.

Vargas echoes those thoughts. He says that trust is critical, because with trust comes patient buy-in. Once you achieve patient buy-in, patient compliance with medication regimens will increase, which is ultimately going to increase health, which is ultimately going to decrease costs.

“And that will ultimately improve the bottom line by rewarding those incentivized value-based contracts,” Vargas says.

Training and Mindset

Both Vargas and Spalding agree that training can provide medical practice staff with the proper skillset needed to provide value-based care. But the mindset is something that needs to be present from the start. “When we’re interviewing, we’re looking for that personality that wants to help,” Vargas says. “But of course we’re all human, so we definitely need positive reinforcement and leading by example.”

Spalding says a lot has to do with building accountability into the healthcare facility’s system. He points to organizations that have struggled in this area and says it’s due in part to inconsistent accountability from leadership on down. “You can hire people and teach them the skills, but then it’s a matter of being consistent and making sure they’re accountable,” Spalding says. “If we don’t have people on the care team with strong interpersonal skills where they can bond with that patient, then compliance with therapy or the medical plan is doomed from the start.”

Multiple Opportunities

Spalding believes that beyond hiring and training staff there are many opportunities for medical practices to provide value-based care. For starters he points to insurance companies that, for a long time, “were seen as the enemy.” But today payers have a multitude of resources available to assist practices in providing value-based care.



“They have rich data sets that talk about utilization outcomes,” he explains. “They have care coordinators and case managers. So, if you look at that as a partnership, you can start to see some real value in what you can do for the patient.”

Access options are another consideration. From patient portals and scheduling appointments online to telehealth and telemedicine consults, there are many options practices can consider to enhance the patient experience.

Can taking these steps enhance a practice’s bottom line? Spalding believes the industry is at a transition point in terms of definitively answering that question. He sees growth in value-based contracts coming out of CMS, but most healthcare professionals are still getting paid fee-for-service.

“If you really want to get into value-based care you have to change your payment model,” he says. “My philosophy would be if you’re going to make the change, make it as fast as you can. Because if you have 66% of your contract in fee-for-service and 34% in value-based care, you’ll drive yourself a little crazy.”

Spalding also cautions physicians against thinking that value-based care is just another fad. “This is a different time and a different era, and we have different tools available,” he says. “We can now track clinical outcomes in a much more robust nature, and tie those clinical outcomes to the actuaries in the financial office. So, this isn’t going anywhere. And if you sit this one out, you’re going to get left behind.”