10 Ways the Volume to Value Shift Will Influence Physicians (Part I)

January 12, 2012
Aubrey Westgate

Trends to watch out for (and prepare for) in 2012 as the shift from volume to value progresses.

As traditional reimbursement shifts from fee-for-service to payment based on quality of care, physicians will need to alter the way in which they practice medicine.

Risk will become a huge factor in compensation, and as a result, financial success will depend very much on your ability to innovate and adapt. In addition, as federal programs explore new payment methodologies, they are also encouraging new partnerships and further integration between providers.

Here are 10 trends to watch out for (and prepare for) in 2012 as the shift from volume to value progresses:

10. Evidence-based medicine
To experience financial successful in new payment models, physicians will need to prove that they are providing quality care at reduced cost.

To do that, they will need to adhere to recognized best clinical practices, hospital management consultant David P. Hunter told Becker’s Hospital Review. "It's amazing the range of variation in practices,” he said. “Some physicians spend four, five, or six times the resources as other physicians for the same or lower outcomes, which creates a huge opportunity to reduce cost and improve quality.”

How to start following best practices? In a recent Physicians Practice article, Susanne Madden, president of medical practice consulting company The Verden Group, suggests contacting your medical specialty society or association. Often it can provide advice, guidance, and templates for you to begin following.

9. Documentation
In order to be compensated fairly, you will need to prove to payers that you are providing quality of care at reduced cost. In addition, as a result of programs and incentives that stress increased care coordination, you will need to quickly share patient information with other providers outside of your medical practice.

That means you will need to fully utilize your EHR to document patient information.
As attorney Richard Wagner, managing director of Chicago-based Wagner Healthcare Consulting, LLC, noted in a recent Physicians Practice article, "In order to participate in so many of these programs coming out of health reform … you need to have those [reliable EHR] systems in place."

How to prepare? Get started on the meaningful use attestation process. That will force you to begin more fully utilizing your EHR, and once you attest, other healthcare systems will be more willing to partner up with you in care coordination programs.

8. Data Analysis
Meaningfully using your EHR is only half the battle. You will also need to analyze that data to help you determine how you are performing for quality and cost.

That way before you take your patient information to payers, you can identify problems and work to improve them. And that way, it’s more likely you will reach quality and cost targets.

How to prepare? Consider appointing a staff member to oversee data analysis, identify issues, and look for areas of improvement.

7. Patient Engagement
Patient engagement is going to become an increasing factor in how much you are paid.

For instance, if your patients don’t buy-in to your treatment plans for them, if they don’t come in regularly for appointments, if they don’t exercise and eat well, it will be impossible for you to improve their quality of care.

How to increase engagement? It could be something as simple as following up with them more regularly to see how that new medication is doing, reminding them that they need to schedule an appointment, or asking them if they are exercising regularly.

6. Compensation
In order to encourage physicians to follow evidence-based guidelines and proper data documentation and analysis, many healthcare systems are adding incentives to physician pay.

According to a recent survey from Sullivan, Cotter and Associates, Inc., a healthcare compensation consulting firm, 72 percent of healthcare organizations already base compensation on productivity (i.e., traditional work RVUs) as well as performance. 

And, though the amount of compensation tied to physician performance is typically 3 percent to 5 percent, the consulting firm says 7 percent to 10 percent will soon be the norm.

How should you add incentives to physician pay at your practice? In October 2011, Justin Chamblee, senior manager at the Coker Group, told Physicians Practice that practices should start small. Consider tying $5,000 to $10,000 of physicians’ yearly pay to nonproductivity measures.

Stay tuned, tomorrow we’ll post the final five trends to watch out for in 2012 as a result of shifting reimbursements.