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FOTO Rehab Outcomes Blog

From Volume to Value

Happy 2016 to all of you!


So, I woke up this morning shrugging off the disappointment and sadness associated with sporting losses at the end of 2015. Two of my favorite teams didn't quite pull off a win. The Red Wings played their hearts out but the Penguins pulled off the win in the third period. (For those of you unfamiliar: hockey.) All I can say about the football game: Roll Tide! The Spartan's didn't even get any numbers on the board. I had been expecting a really good, close game - a nail biter and that was far from reality.

As I'm preparing for 2016, a question popped into my head. We are hearing more and more about value over volume. Has anything changed in our practices?

What I mean: list serves and questions I see continue to focus on "productivity." Obviously current definition of productivity is based on units/hour. Do you see where I feel confused? If we continue to measure productivity based on units/hour, how does that focus on value? If we really mean value over volume our management metrics have to change.

At the same time, we continue to hear that fee for service will be extinct. When fee for service disappears, how will productivity be measured? (I honestly can't believe that we will no longer measure productivity because we need busy clinics and departments.)

I believe in 2016 and upcoming years, the current methodology for measuring productivity will evolve. I am willing to bet it will evolve to something I have believed ever since I've been a physical therapist: productivity will be defined by how much payable time occurs in a clinician's schedule. We've over complicated what productivity really means. Productivity is simple: every available time slot for the day is filled with a payable activity. As the future rolls out this will include telerehabilitation and analyzing and assessing wearable technology data. For now, the concept of patient relationship management opportunities are typically considered a directly non-payable activity but the savvy companies will include this metric as a non-directly payable activity and carve out time allotment to help increase word of mouth referrals.

When the confusing alternative payment model is rolled out, demand will be placed on clinicians to make sure they are spending time doing assessments and re-evaluations and categorizing patients as being complex. What leg will you have to stand on to support that your payable productive time is really providing a higher paying visit? Hmmm... you all know that's what's going to happen, right? The powers that be within your organization will create complexity in defining productivity yet again and will demand a certain percentage of complex visits so the powers that be can calculate their returns easier.

Oh dear... and what about bundled payments? In that case, a percentage of a lump sum will be paid at the initiation of service (or soon after). Then the game becomes how low can you go in providing services to make the most profit. The lower you go, the greater the second payment because you saved money. Wait, I'm jumping ahead: that's if the bundled payment is tied to an incentivized program. If the bundled payment is a simple bundled payment, then the lower the visits and time spent, the greater the profit. Here's something to think about when implementing telehealth though: any time spent connecting or reviewing data will cost money via the salary paid to the person involved in telehealth. So even though you may not have a patient on the schedule and even though the number of visits appear less, time is still being spent on providing service. Just something to think about.

Do you see what is totally missing though in all the the scenarios? Value... I think we need to take a step back and define value. Right? In all the above metrics, the focus was on productivity because that is obviously something important when looking at the situation from a business point of view. The cry for change is "from volume to value." How can you put value into the equation with regard to how you evaluate and manage your services? If payers and outside stakeholders truly mean value, how will they be defining and measuring value? Should you leave it to them to define value or should you define value?

If we are truly moving from volume to value, then we need more skin in the game when it comes to defining and managing value. 

If you are thinking of value with regard to an episode of care, I'm thinking you could have an interesting conversation with Judy Holder. Maybe FOTO has a product that may assist you in figuring out a way to move from volume to value.

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Happy New Year! 

Until next time