The Transformation to Value: A Leadership Guide

Changing Strategy and Culture

Who We Are

The Health Care Transformation Task Force (Task Force) is an industry consortium that brings together patients, payers, providers, and purchasers to align private and public sector efforts to clear the way for a sweeping transformation of the U.S. health care system. We are committed to rapid, measurable change from volume of services to value of care, both for ourselves and our industry. To achieve this, we commit to have 75 percent of our respective businesses operating under value-based payment arrangements by 2020.

Introduction

The transformation from fee-for-service to value can be highly challenging, even for the most sophisticated health care organizations. The process of transformation requires strong leadership, well-defined strategic and operational plans, appropriate resources, and exceptional commitment and ongoing dedication at all organizational levels. Despite the importance of value transformation, there are few public resources that provide strategic guidance and examine broader trends in organizationsí transformation experiences.

The Health Care Transformation Task Force (Task Force) has created a Dimensions of Health Care Transformation Framework (Framework) to help health care organizations assess their transformational maturity along the value-based payment and care continuum. The structure of the Framework provides the foundation for a series of interviews with provider and payer organizations that are deeply engaged in the transition to value. These interviews offer insight into the process of transformation: the decisions that organizations must make as they move along the value continuum, the options available to them and their consideration of alternative approaches, the rationale for particular decisions, and the subsequent results of those decisions. Shared learnings related to changing organizational strategy and culture, as well as new structure and investments that organizations have put in place to facilitate their transition to value, are captured in this report. The report presents this information in a consistent way: (1) common approaches; (2) varying approaches; and (3) lessons learned.

The transformation to value is a long and risky process. There is no clear roadmap to success, and each organization has unique needs and resources. Further, it will not be possible to fully assess the impact of the changes that organizations have made for several years yet to come. Rather than identify industry best practices for delivery system change, the approaches described below illuminate a broader plan for success. In some instances, there is significant alignment on the path forward; in others, the organizations interviewed diverge in their approaches. Together, these findings paint a detailed and diverse picture of the path to transformation to help guide organizations as they embark on their own journey to value.

Changing Strategy and Culture

In the first dimension of the Framework, Task Force members articulated three key components that either impact, or are impacted by, strategy and culture change. Those components are (1) Organizational Structure; (2) Governance; and (3) Executive and Clinical Leadership. The Framework provides examples of the types of questions that organizations should use to evaluate their progress toward strategy and culture transformation. 

When the Framework was created, culture change was highlighted by Task Force members as a key to successfully transforming to a value-based organization. Leaders in payer, provider, and purchaser organizations alike underscored the integral nature of successfully changing the culture within all levels of an organization to support value-based payment and care delivery. The enormity of that task was not lost on any of these leaders, as they also noted that successfully transitioning to a culture of value is one of the biggest challenges and hurdles to successful transformation. As most organizations then went on to point out in the interview process, culture change involves buy-in across an entire organization (i.e., clinicians, executives, administrative staff, and affiliated partners). This necessitates an overarching vision for transformation, dynamic and experienced leaders, and an appropriate level of organizational integration and local leadership buy-in to successfully transition within each market. These high-level assumptions and themes are borne out in the detailed analysis below.

Organizational Structure

Common Approaches

Independent of the overarching organizational configuration, virtually all organizations interviewed have implemented a structure that aims to achieve a balance between the standardization needed across an organization to facilitate high-quality and consistent care, and the customization needed to address organizational and population health needs across varied markets, regions, and lines of business. This generally involves close collaboration with clinical staff and leadership in specific localities who are closer to patients and market dynamics. These local leaders often adopt centralized resources and modify them for their specific markets, but still have overarching accountability to centralized leadership for the cost and quality of their markets. This balance of local and centralized leadership encourages a more rapid and successful adoption of new processes and structures than a purely centralized approach, while still enabling local markets to benefit from the knowledge, resources, and economies of scale that come with larger organizations. Likewise, centralized organizations can benefit from the knowledge of local markets and translate shared learnings to other markets. 

"These very different market dynamics are variations upon a theme," noted one interviewee. "We have to quickly identify what that theme is to maintain system consistency, [then] implement and tailor the program to what the market's needs are." - Executive; Large, single-state provider organization

Varying Approaches