Hospital Staff and the New “Pay-for-Value” Healthcare Proposition

Posted by Paradigm Learning on June 14, 2014

Hospital Staff and the New "Pay-for-Value" Healthcare Proposition

Change doesn’t come easy to health systems in the best of times. So, it’s no surprise that the complex, legislation-driven and ever-evolving transition from the traditional “fee-for-service” model to a new “pay-for-value” proposition is rife with strategic challenges.

Janet Tomcavage, chief of population health for xG Health Solutions and chief administrative office for Geisinger Health Plan, provided this succinct appraisal in a recent article:

“I think organizations know they need to change, and many times they want to. However, senior leaders often don’t feel a sense of urgency or don’t have a strategy for transitioning from volume to value. Both are critical, and organizations that will be successful have both from the start. Then they empower people at the next level to implement the strategy.”

When senior leaders do see the need for change and commit to new strategies, they too often face an internal staff mindset that resists new ways of thinking about providing healthcare services. Many are finding, however, that they can turn this mindset around with well-implemented strategic alignment and communication approaches and by developing increased business and financial acumen within the organization.

Here are some things we’ve learned in working with our healthcare clients:

  1. Employees need to understand the “why” of change as well as the “what.” The predisposition to bemoan the end of what some remember as “the good old days” is human nature. To shift thinking from the “way it was to the way it needs to be,” employees must clearly understand the organization’s strategies, as well as the reason why those strategies are so important. That takes more than a memo or an occasional video or presentation; it takes a well-conceived and executed communication and education strategy that engages hospital staff members from both a mental and emotional standpoint to align them around the key strategies and initiatives of the organization.
  2. “Business-as-unusual” requires consistent and continuous communication. “Even with the desire to change,” Tomcavage says, “People must remap their view of what the healthcare system is supposed to do and develop new capabilities.” To do so requires leaders who mindfully, clearly and repetitively communicate the importance of new ways of thinking and behaving. This represents communication that drives clarity, engagement and commitment to action throughout the organization, while serving to recognize important milestones and successes in the process.
  3. Leaders and managers need higher levels of business acumen. When leaders and managers share a common language and understanding of the financial and strategic drivers required to meet industry and hospital-specific challenges, they are in a better position to lead their teams in ways that balance patient care and financial health. Increased business acumen helps leaders build department/team alignment with strategic objectives and drive better day-to-day decision-making.

An interesting report from the Healthcare Financial Management Association (HFMA) entitled, “Value in Health Care,” provides a good overview of the issues facing hospitals around this topic and makes a strong assertion about the crucial nature of the issue, stating, “Of all the transformations reshaping American healthcare, none is more profound than the shift toward value*.”

Shifting to this “pay for value” approach will require hospital leaders to embrace the need to change, develop new strategies and implement new systems, processes and external partnerships. It will also require them to place a priority on internal staff engagement and education to develop the understanding, the skills, the motivation and the commitment to participate in this critical movement.

By any measure, this new approach is a game-changing proposition.

What are your thoughts about engaging and involving healthcare staff in the shift to “pay-for-value?”

*Download the HFMA report here.

Topics: Healthcare, Business Acumen