Preparing for a Value-Based Payment Contract 

Value-based health care payment opportunities are in the news. In fact, a value-based payment contract may be on your desk right now! You may be wondering how your healthcare organization can best test the waters of value-based care. The Rural Health Value team and Newpoint Healthcare Advisors suggest that you concentrate on three primary tasks to develop your organization’s value-based care capacity and prepare for value-based payment contracts. 

Create a culture that supports value-based care. Success in value-based care (to receive value-based payment) requires an organizational culture shift from volume-focus to value-focus. This new strategic emphasis directly counters the fee-for-service financial incentive of greater volume. Creating a culture of  value-based care is best accomplished if the organization’s governance structure and operational policies 

support value-based care; that is, “walk the talk.” 

Develop organizational capacity to develop and sustain value-based care. A value-based care strategy is required – with detailed objectives, action steps, resource commitments, deadlines, and accountabilities. Use the Rural Health Value Value-Based Care Assessment to identify opportunities for value-based care capacity-building. The Assessment is designed to be completed by your leadership team and includes eight value-based care domains: Governance and Leadership, Care Coordination, Clinical  Care, Community Health, Patient and Family Engagement, Performance Improvement and Reporting,  Health Information Technology, and Financial Risk Management. 

Build financial models to inform value-based payment decisions. Perform a thorough financial pro  forma that compares the fee-for-service status quo to future financial performance under the proposed  value-based payment contract. The pro forma requires your informed and honest assumptions about  future service volumes, market share, prices, and your organization’s capacity for change. 

When it comes to health care payment, the status quo is not risk-free. The pace of change from volume  to value may be uncertain, but the transition to value-based payments is here to stay. 

Our next Newpoint Viewpoint will offer specific recommendations to “walk the talk” of value-based care.  For details on preparing for and negotiating a value-based payment contract, you can review the following  guide and contact Clint MacKinney or Brett Norell at Newpoint Health, (602) 265-5000. 

  1. Clinton MacKinney, MD, MS 

Brett Norell, MHA, MPH, FACHE 

This Newpoint Viewpoint is based on work by the Rural Health Value Project,  

supported by the Federal Office of Rural Health Policy. 

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