Adjusting to Value-Based Care

by Thomas R. Collins •

Streamlined Care

Myles Pensak, MD, CEO of the faculty practice group University of Cincinnati Physicians, described the efforts to improve value-based medicine at his center. There, the physician practice plan is completely independent, with physicians leased to the University of Cincinnati’s health system. Over the last several years, 17 departments, which were

previously separate financial entities, were “melded together” into a single faculty practice plan with a single tax ID number, which he said was one of the most arduous tasks in the process due to the loss of control involved.

The board is now made up of the department chairs, with Dr. Pensak, as CEO, reporting to them. “The power is in the board,” he said.

He emphasized the importance of streamlined care, with surgical patients seeing all the specialists they need in one day, and having reliable numbers available to make good decisions. “One of the things that tends to happen in a lot of physician organizations … is the assumption that because we are smart we can solve the issues and/or problems because it’s all about how we take care of patients,” he said. “The reality is you need to have the analytics. We are really not very good at digging out the business details and recognizing trends.”

With predictions that 90% of physician income 10 years from now will come in the form of pay for performance, it is hard to overstate the importance of working with analysts, Dr. Pensak added. At his center, an analyst will be embedded in each department starting in July. “The analysts who are working with you are the people who are going to have to set the tone for where you’re going.”

From the Audience

“I look forward to, over the course of the next week, bringing back the opinions that I heard here and talking to the attendings who I work closely with to get their thoughts and bounce ideas off them.—Patrick Tassone, MD, resident, Thomas Jefferson University Hospitals, Philadelphia

Activity-Based Costing

Dr. Randal Weber, chief of head and neck Surgery at MD Anderson Cancer Center, pointed out that one important key to time-driven activity-based costing (TDABC) is to spot trends and develop bundled payment models, based on the complexity of care and number of co-morbidities a patient has. TDABC uses time-based algorithms to simplify the traditional but more time-consuming “activity-based costing” system of calculating costs for specific activities, such as answering a phone call.