The central mission of hospitals and health systems will remain constant: provide high-quality care to patients. But organizations are weathering a sea of market changes, from new risk-based payment models to increased quality reporting and transparency. As such, leaders are questioning whether their conventional quality path will be sufficient to meet these growing industry demands.
CMS's path to quality doesn't cut it anymore
Here's the good news: health system quality has improved in recent years. We've seen reductions in readmissions and hospital-acquired infections rates, among other improvements. These results largely correlate to the measures the Centers for Medicare and Medicaid Services (CMS) and other payers evaluate (and sometimes pay) health systems on.
However, aligning health system quality solely with external, payer-driven metrics is not a sustainable strategy. CMS alone requires hospitals to report 700-plus metrics every year—and that list is evolving. It's frustrating trying to map your quality strategy to a moving target like this, and it misses the mark in three major ways:
- Narrow patient scope – Payer-specific quality measures do not account for outcomes across all patient populations and care settings.
- Connection to costs – Most leaders are paying close attention to pay-for-performance (P4P) measures—and while P4P has a financial impact, this narrow focus may detract from other high-volume, highly-variable clinical opportunities with even greater cost avoidance potential.
- Physician engagement – A payer-driven strategy is an uninspiring call to action for physicians who are skeptical of "check the box" medicine that helps hospitals benefit from incentive programs.
What hospital and health systems need is a quality strategy that delivers the best care for patients, reduces costs, and engages physicians—allowing health systems to win from both a business and mission perspective. Our new briefing, Seven Imperatives to Transform Your Quality Strategy, reviews directives every health system should use to transform their approach to quality.
So where do you start? Drop your reactive quality strategy and fully embrace clinical standardization.
The new quality strategy: Reducing unnecessary care variation
Clinical standardization addresses the three gaps that a payer-driven quality strategy misses. Let's start with patients. A care variation reduction strategy allows hospitals to better orient themselves around their specific, greatest opportunities for care improvement whether that opportunity aligns with a payer measure or is an initiative unique to that hospital's quality needs.
In terms of cost, the profitability impact of Medicare's P4P programs pales in comparison to the potential impact of clinical standardization. The average hospital stands to lose about $200,000 from P4P programs. But Advisory Board's Crimson Continuum of Care cohort data reveals that the average hospital stands to avoid millions of dollars in costs if it can rein in outlier performance on highly variable, high-cost DRGs like sepsis and joint replacement.
A care variation reduction strategy can also engage and empower physicians in performance improvement. Defining standards offers physicians an appealing challenge: what does right care look like and how can the organization ensure this is delivered to every patient, every time? At our recent Chief Clinical Executive Summit, Banner Health and Carolinas HealthCare System discussed how clinical standardization should not be another burden placed on physicians—it should be a means of giving physicians the leadership reins to advance clinical care.