You\u2019ve heard this before: \u201cWe need to leverage data for better decision making. Our strategic decisions need to be based on data analysis and interpretation.\u201d<\/p>\n
Healthcare organizations identified becoming a data-driven organization as a goal years ago, and it is still the current mantra and underlying foundation of most business strategies. Yet organizations continue to struggle to become data driven. A 2022 survey of US Fortune 1000 business and technology C-executives<\/a> shows only 26.5 percent report have achieved that goal, and only 19.3 percent report having established a data culture.<\/p>\n For healthcare organizations, the stakes are higher. As healthcare providers continue to prioritize lowering costs while improving quality of care as their primary strategic goals, becoming truly data driven<\/a> is critical to supporting these goals.<\/strong> Assuming the underlying data is already available to the healthcare organization, the complexity of successfully leveraging analytics requires effective collaboration between business and technical groups.<\/p>\n In this blog, we will look at an example of how a single metric known as total cost of care (TCOC) can provide insight into the performance of a healthcare organization and serve as an input into decisions that will have implications for a wide set of business use cases. This blog is part of a series in which we\u2019ll explore the concept of use-case-driven solutions and then provide a comprehensive framework for developing and implementing a use case for TCOC. As we\u2019ll discover, a systematic approach to use case definition and planning is instrumental in ensuring a successful investment for all stakeholders.<\/p>\n Fee-for-service payment reimbursement models emphasize and thrive on the volume of services that providers perform. However, this quantity-over-quality approach frequently comes at the cost of both patient and provider. As an alternative, value-based payment models incentivize providers to shift the focus to lowering costs while providing the highest quality of care.<\/strong><\/p>\n To move the needle on lowering costs, organizations must first capture and understand all variables contributing to the total cost of care and monitor it overtime. Payors or other organizations that monitor TCOC get insights into various segments of their member or patient population that help them structure managed care programs and initiatives, as well as understand provider performance and optimize provider contracts and incentives.<\/p>\n TCOC also has a direct correlation to providers\u2019 performance on specific Centers for Medicare and Medicaid Services (CMS) quality measures and can help providers focus on improving clinical outcomes and patient experience while reducing cost-per-episode of care.<\/p>\n Total Cost of Care may be measured differently based on who it applies to. Payors refer to their plan subscribers as \u201cmembers,\u201d while providers refer to the same people as \u201cpatients.\u201d TCOC is a metric that attempts to look at what it costs an entity to care for its customers. In other words, it is the cost associated with a population and its specific conditions.<\/strong><\/p>\n For payors or Accountable Care Organizations (ACOs) that have value-based contracts with providers, TCOC can help develop or adjust payment and shared saving strategies, which may include incentives for keeping TCOC within a certain range or lowering it.<\/p>\n CMS launched value-based programs (VBP) around 2012 \u2013 VBP is an umbrella term for a variety of initiatives that reward providers with incentive payments for the quality of care they deliver to patients covered by Medicare. Through VBP, CMS pursues a triple aim of improving care for individuals, improving the health of populations<\/a> and lowering overall costs of care.<\/strong><\/p>\n Under the original Medicare Shared Savings Program (MSSP), not only did new alternative payment models emerge but so did a new patient-centered network that shares financial and medical responsibilities with the goal of improving patient care while limiting unnecessary spending. The payment structures for programs like this incentivized physicians to work together to improve the care of patients and initially focused on Medicare beneficiaries seen by providers participating in such programs.<\/p>\nLowering Costs Is a Priority<\/h2>\n
Measuring Total Cost of Care<\/h2>\n
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Value-based Programs<\/h2>\n