13 Sep The Transformation to Value: A Leadership Guide
Health care industry leaders face incredible challenges in shifting from traditional, volume-driven fee-for-service to value-based payment and care delivery. The Health Care Transformation Task Force has created a framework to help guide decision makers in their transformation journeys, along with insights from organizations at the vanguard of value.
(PDF version of the Strategy Framework)
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Health care industry leaders face incredible challenges in shifting from traditional, volume-driven fee-for-service to value-based care. While the public discussion is often about specific value-based payment models, the broader transformation challenges to becoming a truly value-based organization receive much less focus. Committed organizations must often make significant changes to their strategic direction and operating structures, yet leaders don’t always have a clear precedent on how to successfully guide their organizations through these changes.
The Task Force’s Path to Transformation Advisory Group created the Dimensions of Health Care Transformation Strategic Framework (“Framework”) to assist health care leaders as they design and implement their transition to value. The Framework is built on the collective experience and wisdom from organizations that are at the vanguard of value-based payment and care delivery. It reflects introspective questions that change leaders should ask in building out an effective transformation strategy. Read our introductory report to learn more about the Framework.
Successfully changing the culture within all levels of an organization is critical to support value-based payment and care delivery, but also one of the biggest challenges in successful transformation. Culture change involves buy-in across an entire organization (i.e., clinicians, executives, administrative staff, and affiliated partners). This requires 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. Read the report to learn more about how organizations have addressed strategy and culture change in their own transformation journeys.
Structure and investments are critical to the transformation journey because they encompass the physical infrastructure and human capital requirements needed to successfully build a value-based delivery system. Finding the right balance of resources to invest in can be extraordinarily challenging, especially for organizations that are new to value-based care. Many of the executives interviewed discussed the importance of identifying highly skilled, experienced leaders to assist with the transition process. With experienced stewardship, organizations can successfully stand up their value businesses and invest intelligently in infrastructure and resources. Read the report to learn what our leaders had to say.
For organizations that are on the path to value, making the right investments in operations and developing effective mechanisms for accountability can determine success or failure. The Task Force identified three key elements: operational alignment, financial incentives, and quality measurement. Operational alignment ensures that value objectives are managed across lines of business. Financial incentives encourage momentum and commitment from staff toward achieving common value goals. Quality measurement means effectively evaluating and measuring progress toward those value goals. Read the report to gain insight into the successes and lessons learned from transformation leaders.
In the fourth and final dimension of the Framework, the Task Force highlights two key components: Process and Outcomes Evaluation and Financial Modeling. Evaluating progress toward value-based care is critical for the long-term sustainability and success of any value-based initiative. Understanding when to discontinue a program due to financial unsustainability and/or poor outcomes can be just as important as identifying which programs are most likely to yield the best results and returns. For details on how organizations are evaluating progress and making informed decisions on the future of their value-based programs, read the report.
Shifting from traditional, volume-driven fee-for-service to value based care is highly challenging, even for the most sophisticated businesses. Health care organizations committed to transforming to value-based payment and care delivery models must often make significant changes to their strategic direction and operating structures. How much work needs to be done to achieve value transformation, however, depends on many factors such as level of commitment, organizational complexity, cultural dexterity, level of change currently underway, and desired goals.
Transformation can be risky, even for those who are further along the transition to value continuum. Organizations must weigh a multitude of variables in their planning processes, and often use internal vetting practices that draw upon both internal and external shared learnings as well as return on investment (ROI) calculations to align transformational goals with current business models. In particular, shared learnings from businesses that have implemented value-based care programs are critically important to help other organizations successfully navigate opportunities and pitfalls.
The Task Force’s Path to Transformation Advisory Group created the Dimensions of Health Care Transformation Strategy Framework (Framework) to assist health care leaders as they design and implement their transition to value. The Framework is built on the collective experience and wisdom from organizations that are at the vanguard of value-based payment and care delivery. It reflects introspective questions that change leaders should ask in building out a transformation strategy.
The Framework also provides the foundation for a series of interviews, and subsequent analysis, that the Task Force conducted to provide additional context on the path to transformation continuum and allow decision makers to benchmark themselves against similar organizations that are actively moving toward value-based care.
Dimensions of Health Care Transformation Framework
The Framework helps organizations assess their transformational maturity across a set of business dimensions (vertical axis) in which they can expect to make transformative changes through three levels (horizontal axis): (1) concept; (2) execution; and (3) sustainability. This Framework charts a course for how organizations can be successful in culturally, structurally, and operationally transitioning to value-based care.
The Framework’s current business dimensions are intended as a core set, with additional dimensions added as appropriate. The example questions and categories provided represent activities that may or may not be happening simultaneously, rather than prerequisites that must be met before an organization may move to the next level. In sum, the Framework is intended to be a dynamic tool, with additional dimensions added over time.
The first level – concept – assesses the needs of the communities or markets to be served and how health care organizations can best tailor value-based care models to serve those needs. Due to the complexities of value-based care arrangements, the concept stage requires education of, and buyin from, leadership groups and an organizational commitment to the culture change necessary to effectively implement value-based care models.
The second level – execution – involves delivering on an action plan for change, including setting a course and timeline for transitioning from fee-for-service to value-based payment models. The leadership education and buy-in from the concept stage is now shared more broadly with the organization. Cultural and operational plans are established to ensure alignment and to promote organizational accountability so that internal teams move toward achieving common goals on consistent timelines, with an established feedback loop to promote continual improvement. All dimensions from the concept stages are now operational and individual/team incentive plans – financial, cultural and/or operational – are in place to tie personal accountability to organizational commitment.
The final level – sustainability – envisions an ideal end state of organizational transformation that reflects aligned goals and objectives, as well as measurable progress toward lower costs and improved quality, outcomes and patient experience. Within the sustainability level, operational scale is achieved consistent with the desired organizational plan, but is not viewed as satisfactorily sustainable by itself.
For most organizations, “sustainability” is an aspirational destination that has not yet been fully achieved. Thus, the definition and specificity of what it means to sustain transformative efforts will likely evolve over time and will be subject to continual advancement/refinement. One constant, however, is the need for continuous improvement to remain successful in providing high-quality, affordable person-centered care.
Health care organizations’ ability to move along the transformation continuum is often dependent on external factors over which the organization has little direct control. External factors may include state insurance regulations; federal policies and requirements; local health information infrastructure; and willingness from others to partner in value-based arrangements. The confluence of these factors will dictate the overall readiness of local markets to support value-based care and will play a large role in whether organizations are able to pursue value transformation
At present, the Framework does not seek to identify specific external factors as prerequisites for, or potential impediments to transformation; rather, it recognizes that the speed and scope of transformation may be restricted by the current ecosystem in which individual health care organizations operate.
The Task Force created the Dimensions of Health Care Transformation Framework to assist health care leaders as they design and implement their transition to value. The Framework is built on the collective experience and wisdom from member organizations that are at the vanguard of value-based payment and care delivery. It reflects questions that change leaders should ask themselves in building out a transformation strategy. The Framework was developed from a series of working sessions with the Task Force Path to Transformation Advisory Group, consisting of Task Force members, over a period of several months.
The Task Force used the Framework dimensions to craft an interview guide for members. Task Force staff sought participation from members of the Path to Transformation Advisory Group. Members had the option of participating via phone or through a written response to the interview guide. In total, the Task Force conducted interviews with 12 member organizations, corresponding to over 20 hours of interviews, and received four written responses.
The breakdown was as follows:
• 3 payers (two national, one regional)
• 9 providers
• 3 partners (guide providers through value transformation)
Following interview transcription by a professional transcription service, the transcripts and written responses were qualitatively coded using Dedoose, an online coding platform, to highlight and organize key themes among member experiences and observations across each dimension. Task Force staff also completed a summary analysis to enable comparison of approaches and results for similar member organizations. All quotes in this report draw from these interview and written transcripts.
In case you missed it: Learn about common strategies of high-performing organizations in our Levers of Successful ACOs report.