Embarking on the quest for evidence in value-based care

The pandemic has affected us in many ways. The effect is ever evolving. Here are some staggering realities.

Per Kaufman Hall, median hospital operating margins closed 2020 at 0.3%, not including federal Coronavirus Aid, Relief, and Economic Security (CARES) Act funding, which bumped the figure up to 2.7% if included. But that’s down 56% compared to 2019 results. At the same time, total expense per adjusted discharge and labor expense per adjusted discharge both increased 14.4% and non-labor expense per adjusted discharge increased 14.2%.

Per Chartis, 453 rural hospitals are in danger of closing and most (77%) have 33 days or less of cash on hand. Per Deloitte, by 2030, revenue from inpatient services will decline 35% and demand for inpatient beds will shrink by 44%.

Taken together these results represent an unsustainable trajectory for hospitals requiring that the boards and management take a fresh look at their strategies for surviving and thriving going forward.

Pillars for process growth

With these facts as a backdrop, let’s once again review the basics for evidence-based process improvement and the simple steps that every healthcare organization should be embracing to weather the evolution of value-based healthcare. It’s simple really, a basic algorithm that every facility can adopt.  

1. Governance – establish how and by whom decisions will be made and supported.   

2. Process – create a standard step-by-step workflow that you utilize each time a new procedure, product, service, technology or piece of capital equipment is requested. 

3. Technology – automate the workflow if you can do so. This provides transparency and efficiency. It also provides a framework for standardization of process and allows you to work in a virtual/remote environment and at a faster pace. 

4. Evidence – establish criteria and requirements that the process is based upon. Move from subjective to objective decision making. 

Let’s discuss some of the specifics that support these four pillars. Policies and procedures are the backbone, the foundation upon which a solid evidence-based process rests. The governance of a process must be supported, as well and enforced, by all levels of leadership. The first time you allow someone to “go around” the process and get what they want you will have difficulty resuming governance. This is a fundamental component to success and a conversation that must be had at a senior leadership level.

Once you have a solid governance supported by enforceable policy you can move on to workflow and process-based criteria. Start by establishing criteria or performance requirements for the technology you are evaluating. You will need to create various workflows or steps based upon the type of products you are going to review. For example, the process workflow for a commodity item will vary from that of a clinical or physician preference item – as it should. Purchased services will have their own criteria and so on. One size does not fit all for establishing standards and workflow steps. You need to make sure you are not evaluating “Kleenex” when what you are really looking at is the criteria for facial tissue.  

Research and collect as much available data as you can to learn about the technology being reviewed. Break this down into consumable information that is objective in nature and neutral to brand preference. This appraisal of data and information is key to an evidence-based decision-making process. This is typically where we fall short.

Evidence-based practice (EBP) is the explicit use of the best available medical evidence in making clinical decisions. Needing to improve cost efficiency and boost care quality, providers must invest in the creation and adoption of EBPs. These practices guide clinicians in providing patients with the right care, at the right level, at the right time and with the right products and technologies. EBP conversations allow organizations to integrate the data into your clinicians’ experiences as well as requirements. This enables us to determine objectively what best meets the requirements that we initially have established. 

When organizations can integrate this workflow into an automated technology platform, they are able to garner multiple returns of their investment. First is the value of time. Standardizing steps in the process ensures that the right questions are reviewed and answered.  By leaving this to an individual we often miss critical elements. The process should be repeatable and accountable. Technology can provide visibility and complete transparency into each step of the process. Thus, holding individuals accountable for their contributions and discussions, all in a single repository that becomes documentation for decision making. Next is the value of money. Be inviting the right people to review the right information and make the right decision – the faster we achieve innumerable value.  

Evidence-based value analysis is an action verb, not a noun. So just as the pandemic has affected us and the longer-term effect is evolving, such is evidence-based value analysis. We must incorporate evidence into the process of operations and drive continuous process improvement towards our quest for value-based healthcare.