Healthcare's Quality Cycle: The Rise Of Quality Cycle Management

Post written by

Joseph Siemienczuk

Chief Medical Officer at Enli, overseeing value-based reimbursement analytics and data-driven care coordination strategy.

Now, more than ever, your ongoing health and wellness influences how much your doctor’s office gets paid. Healthcare payers, led primarily by the Centers for Medicare and Medicaid Services (CMS), have forced incremental change by tying an increasing percentage of reimbursement to individual and population health outcomes. The industry term for this is "value-based care delivery," and it describes a healthcare system where payment is predicated on quality and health outcomes and not just services delivered.

This shift in healthcare reimbursement dramatically reset the healthcare IT (HIT) landscape. Today, health systems employ a range of population health applications that enable value-based care delivery. These tools process clinical and insurance claims data to pinpoint quality improvement opportunities for patients with conditions that become costly when poorly managed, such as diabetes. Once a cohort is identified, care coordination and patient engagement tools ensure appropriate and timely communication and intervention for patients requiring treatment.

From a clinical and care delivery standpoint, health systems are adjusting to value-based care delivery; from a business and financial standpoint, enabling technology is still catching up.

Payment tied to quality, otherwise known as "value-based reimbursement" (VBR), is significantly different from the traditional healthcare reimbursement model, known as "fee for service" (FFS), in which payment is based exclusively on services delivered.

The current business process used to monitor FFS revenue is called "revenue cycle management" (RCM). It is a framework for tracking revenue from patients, but it’s only applicable to the FFS model. The process breaks down when you include quality as part of the revenue equation, and this limitation extends to the IT systems designed to support RCM. A new process is required to track revenue in a value- and quality-based world. It’s time to pay attention to the quality cycle.

Quality Cycle Management

Quality cycle management (QCM) is an emerging process that accounts for the quality component of reimbursement that is absent from the FFS model. Enabling QCM within a health system requires a mosaic of IT solutions, because delivering quality is not transactional — it’s ongoing. It requires population analysis, best-practice health improvement programs, care coordination and patient engagement. It’s no longer about the service delivered. It's about whether the service was effective. Is the patient doing what they need to do? Are they showing positive or negative health trends? Are they scheduled for a lab test? Did they actually go to the lab for testing? Is the health system tracking quality performance? Are they improving specific quality measures tied to payment? Are they identifying poorly performing measures and the levers to improve them? Are they forecasting expected revenue based on population health?

These questions are paramount when revenue is predicated on quality, and they're why the RCM model fails as an adequate framework.

I’ve characterized a new process with the goal of highlighting the functional areas important to a holistic QCM process. Each area requires a unique mix of HIT solutions, which I will unpack in the posts that follow in this series.

  • Attribution. Some products administered by public payers require healthcare providers to report and perform on their entire population. But more commonly, the payer is interested only in the people covered by their insurance product. So providers must have the technical capability to ingest large lists of insured members and “match” them to the patients in their electronic health records. Sounds straightforward until I mention that I may have multiple patients named Linda Jones or Doug Smith in my practice.
  • Analysis. A quality measure generally consist of a proportion, with explicit definitions of numerator and denominator.  A common quality measure in diabetes, for example, may look for the proportion of Type 2 diabetics who have undergone dilated retinal exams in the past two years. My IT should have the capability to ingest structured data on thousands of diabetics and produce an accurate answer, along with lists of patients who have not received the service or achieved the outcome. This analysis identifies “gaps in care.”
  • Programs. Once I identify a group of people with care gaps, I need to take steps to close the gaps. The steps required to provide mammograms to a group of women who are overdue are very different from closing a care gap of adequate blood pressure management in a population of patients with hypertension. A program is the definition of the population and the set of steps needed to effectively close care gaps.
  • Care Coordination. Once I identify the patients and the steps, I need IT to execute the workflow — either automated or in support of human users. The workflow should be the most affordable and efficient approach available. Mammography prompts can be automated in a smartphone app, while dietary guidance for diabetics may be most effective in the form of real-time coaching by nutritionists.
  • Patient Engagement. Engagement of patients has been taken for granted and neglected by providers for a long time. Advice or “orders” from healthcare providers are much more effective if patients are engaged and activated. There is substantial scientific evidence on the most effective approaches, and much can be supported by information technology.
  • Payment and Evaluation. New contracts contain explicit terms concerning the payments or penalties associated with different levels of performance in a broad array of disparate measures. I must be capable of assessing the payments I have earned and ensuring agreement on my performance with payers and receipt of reimbursement.
  • Rinse and Repeat. These steps actually represent a cycle, and I won’t likely maximize my performance with the first pass. Each time I run through the cycle, my performance should improve incrementally, right up to end of the contract period.

In part two of the series, I will begin to explore the application and IT infrastructure required to practice QCM.

Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. Do I qualify?
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Now, more than ever, your ongoing health and wellness influences how much your doctor’s office gets paid. Healthcare payers, led primarily by the Centers for Medicare and Medicaid Services (CMS), have forced incremental change by tying an increasing percentage of reimbursement to individual and population health outcomes. The industry term for this is "value-based care delivery," and it describes a healthcare system where payment is predicated on quality and health outcomes and not just services delivered.

This shift in healthcare reimbursement dramatically reset the healthcare IT (HIT) landscape. Today, health systems employ a range of population health applications that enable value-based care delivery. These tools process clinical and insurance claims data to pinpoint quality improvement opportunities for patients with conditions that become costly when poorly managed, such as diabetes. Once a cohort is identified, care coordination and patient engagement tools ensure appropriate and timely communication and intervention for patients requiring treatment.

From a clinical and care delivery standpoint, health systems are adjusting to value-based care delivery; from a business and financial standpoint, enabling technology is still catching up.

Payment tied to quality, otherwise known as "value-based reimbursement" (VBR), is significantly different from the traditional healthcare reimbursement model, known as "fee for service" (FFS), in which payment is based exclusively on services delivered.

The current business process used to monitor FFS revenue is called "revenue cycle management" (RCM). It is a framework for tracking revenue from patients, but it’s only applicable to the FFS model. The process breaks down when you include quality as part of the revenue equation, and this limitation extends to the IT systems designed to support RCM. A new process is required to track revenue in a value- and quality-based world. It’s time to pay attention to the quality cycle.

Quality Cycle Management

Quality cycle management (QCM) is an emerging process that accounts for the quality component of reimbursement that is absent from the FFS model. Enabling QCM within a health system requires a mosaic of IT solutions, because delivering quality is not transactional — it’s ongoing. It requires population analysis, best-practice health improvement programs, care coordination and patient engagement. It’s no longer about the service delivered. It's about whether the service was effective. Is the patient doing what they need to do? Are they showing positive or negative health trends? Are they scheduled for a lab test? Did they actually go to the lab for testing? Is the health system tracking quality performance? Are they improving specific quality measures tied to payment? Are they identifying poorly performing measures and the levers to improve them? Are they forecasting expected revenue based on population health?

These questions are paramount when revenue is predicated on quality, and they're why the RCM model fails as an adequate framework.

I’ve characterized a new process with the goal of highlighting the functional areas important to a holistic QCM process. Each area requires a unique mix of HIT solutions, which I will unpack in the posts that follow in this series.

  • Attribution. Some products administered by public payers require healthcare providers to report and perform on their entire population. But more commonly, the payer is interested only in the people covered by their insurance product. So providers must have the technical capability to ingest large lists of insured members and “match” them to the patients in their electronic health records. Sounds straightforward until I mention that I may have multiple patients named Linda Jones or Doug Smith in my practice.
  • Analysis. A quality measure generally consist of a proportion, with explicit definitions of numerator and denominator.  A common quality measure in diabetes, for example, may look for the proportion of Type 2 diabetics who have undergone dilated retinal exams in the past two years. My IT should have the capability to ingest structured data on thousands of diabetics and produce an accurate answer, along with lists of patients who have not received the service or achieved the outcome. This analysis identifies “gaps in care.”
  • Programs. Once I identify a group of people with care gaps, I need to take steps to close the gaps. The steps required to provide mammograms to a group of women who are overdue are very different from closing a care gap of adequate blood pressure management in a population of patients with hypertension. A program is the definition of the population and the set of steps needed to effectively close care gaps.
  • Care Coordination. Once I identify the patients and the steps, I need IT to execute the workflow — either automated or in support of human users. The workflow should be the most affordable and efficient approach available. Mammography prompts can be automated in a smartphone app, while dietary guidance for diabetics may be most effective in the form of real-time coaching by nutritionists.
  • Patient Engagement. Engagement of patients has been taken for granted and neglected by providers for a long time. Advice or “orders” from healthcare providers are much more effective if patients are engaged and activated. There is substantial scientific evidence on the most effective approaches, and much can be supported by information technology.
  • Payment and Evaluation. New contracts contain explicit terms concerning the payments or penalties associated with different levels of performance in a broad array of disparate measures. I must be capable of assessing the payments I have earned and ensuring agreement on my performance with payers and receipt of reimbursement.
  • Rinse and Repeat. These steps actually represent a cycle, and I won’t likely maximize my performance with the first pass. Each time I run through the cycle, my performance should improve incrementally, right up to end of the contract period.

In part two of the series, I will begin to explore the application and IT infrastructure required to practice QCM.

Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. Do I qualify?

Chief Medical Officer at Enli, overseeing value-based reimbursement analytics and data-driven care coordination strategy. www.enli.net