Care Management in a Value Based Marketplace - Part 2

by Stefani Daniels, Managing Partner, PhoenixMed
Published on Nov 04, 2016

Strategic change and innovation are gaining relevance as organizations prepare for the turbulent marketplace of new delivery systems and payment plans.  Hospital execs and care management program leaders have to cope with economic and quality pressures and consequently, they need to be innovative.  In other words, they need to develop combinations of new means (e.g. new practice processes) and ends (e.g., new outcomes) that have been introduced to the internal and external market.  

Dynamic environments such as that which the healthcare industry is now experiencing, are characterized by rapid change and no where is it felt more positively, than in care coordination services. Across the country, as evidenced by the innovations presented at national conferences and reported in the literature, the extent of change in care management programs compared with the status quo can be referred to as the degree of program innovativeness. Environmental characteristics of hospitals are known to influence the generation and expansion of knowledge, ideas, practices, and services. Care manaement leaders are using these attributes to move from the traditional predominance of functional models and practices (discharge planning and utilization review) to new approaches that distinguish themselves by targeting high risk patients, managing their progression-of-care, preventing avoidable risk to multiple stakeholders and generating measurable outcomes. 

The conceptual framework for innovative transformation begins with a clear strategic vision which reflects the care management program's capacity to anticipate and react to changes in the external environment.  What is the purpose of care management? What will it look like next year?  In five years?  What are the goals of the program and what objectives will be used to measure the programs success in achieving those goals?   Once consensus on this framework is achieved, then structural and operational activities can be developed based on each facility's unique culture, preferences, environmental climate. 

The realization of better, innovative ways of providing high quality care management requires executive sponsorship and program leadership that nurture innovative cultures. The fact that hospitals are constellations of structural and workflow characteristics points out the challenges that every care management program leader faces. The requirements for innovation are not necessarily consistent with all organizational aspects which is why a clear path to a new venture demands business acumen to ensure success.   

Changing healthcare trends are creating significant opportunities for care management leaders interested in pursuing innovative ways to respond to the changing marketplace characterized by pay for value, a renewed focus on outpatient and preventive care services, and continuity of care across the continuum. A carefully prepared business plan lays the foundation for the 'new' business of care management and is useful is gathering support from the medical staff and C-suite.  The business plan also provides an opportunity and a structured framework in which to think thorugh all aspects of the venture, as well as examine all the consequences.  

Before developing the plan, spell out the circumstances that support the innovation.  Consider using market criteria or assumptions to define the future. An example might be that a new model of care management will ensure compliance with the forthcoming changes in the Conditions of Participation. Another example might be the adoption of population health strategies to prepare for care coordination across the continuum and a new opportunity for growth.  In this case the assumption may state that a new care management model will offer care coordination services to selected high risk patients who are members of an accountable care organziation.  Or, the assumption may state that marketability of a care coordination program to local businesses is a new revenue stream.  These elements lay the foundation for the more formal business plan.

Google 'business plans' and many formats will pop up, but here is one consideration:

Element 1 - Background and Description outlines the new model succinctly, describing what has been done in the past and what is proposed for the future.

Element 2 - Overall strategy outlines the reasons to innovate and should be consistent with the hospital's overall strategy for the future.  For example, improving care in the hospital requires simultaneous pursuit of three aims: improving the experience of care, improving the health of populations and reducing the per capita costs. What strategies will a transformed care management program undertake to achieve these goals? 

Element 3 - Market analysis, which can be broken down into sub-sections, quantifies the demand for the new service and provides justification for the plan. It is necessary to then determine whether the demand is being met under the current care management program model. For example, projections for a transitions clinic may reveal enough visits to support creating the clinic for selected high risk patients but little resources to support one.  However, the market may demonstrate that getting an appointment with a patient's primary care provider takes more than 2 weeks increasing the risk of readmission or there may be a portion of discharged patients who do not have a regular primary care provider. Which is greater; the penalties associated with readmissions or the expense of an outpatient care manager? 

Element 5 - Operational analysis outlines the space and facilities requirements, staffing needs, capital equipment and organizational structure.  Essentially, the analysis outlines the mechanics of operating the new program.

Element 6 - Financial analysis or feasibility study which will reveal the cost effectiness and profitability of the new program plan. Inpatient care management programs seldom generate revenue but it does generate objective savings such as lower resource utilization expenses or reduction in payer denials or avoidable delivery of care delays. But if your vision extends beyond the walls of the hospital, revenue is possible by offering ambulatory care management services to local businesses, at-risk primary providers, or accountable care organizations.

Element 7 - The marketing plan outlines the means by which the new care management program will orient its colleagues and its community. 

Element 8 - The work plan consists of a list of all the activities that need to the accomplished, indicating who is responsible for the activities and the time frame in which it is to be accompliahed. The work plan is the heart of the innovative process and should be organized so that it is an easy-to-use management tool that can both monitor and assess the implementation of the new venture.  The value of this element is in its detail, therefore, it can be abbreviated until final approval of the vision and the plan is accomplished.