HCM FPX 5314 Assessment 3 Value-Based Purchasing and Shared Risk Models

Value-Based Purchasing Models

Historically, hospitals utilized a fee-for-service or volume-based payment model, incentivizing quantity over quality care. This model, rewarding the number of services provided, contributes to escalating healthcare costs. To address this, healthcare organizations are transitioning to a value-based care model, emphasizing quality care to control costs. The Centers for Medicare & Medicaid Services (CMS) established four domains for incentivized payments, penalizing failure to meet quality measures (Brown, 2018). Adherence to CMS guidelines allows hospitals to optimize bonus payments in the following domains:

1) Patient and Caregiver-Centered Experience of Care/Care Coordination

2) Safety

3) Clinical Care

4) Efficiency and Cost Reduction

Influence of Value-Based Purchasing on Healthcare Management

The value-based model challenges healthcare organizations to improve performance and patient outcomes. Effective decision-making by physicians and management is crucial, requiring collaboration on budgeting, policy, regulations, patient care, and talent acquisition. Adapting to value-based care involves focusing on patient experience, cost reduction, clinical efficiency, and adherence to CMS guidelines (Damberg et al., 2014).

Shared Risk Models

Shared risk models entail providers assuming more risk for potential higher financial rewards. Healthcare organizations share savings with insurers if costs are kept low and patient outcomes improve. Conversely, failure to meet these targets results in cost-sharing. In 2017, shared risk models reduced total care costs by 3.5%, with California providers scoring 9.2% higher in clinical quality performance (LaPointe, 2019). However, if hospitals fail to enhance patient outcomes and implement cost-effective strategies, they may absorb excess healthcare delivery costs.

Influence of Shared Risk Models on Healthcare Management

Managing shared risk models involves monitoring risk to prevent over-leveraging. Providers must demonstrate meeting quality standards, benefiting patients, and lowering operating costs. Effective decision-making by the management team is crucial to maximizing reimbursement potential, improving care quality, reducing costs, and increasing patient volume (Brown & Crapo, 2017).

Strategies for Effective Organizational Culture Development

Developing a strong organizational culture is essential for success. Key strategies include communication, collaboration, clarifying the company’s vision, leading by example, setting performance standards, and focusing on employee well-being. Effective organizational culture fosters collaboration, aligns teams with the company’s vision, and contributes to long-term success (Beheshti, 2018; Meehan, Rigby, & Rogers, 2008).

References

Beheshti, N. (2018, September 17). 3 Strategies To Build A Strong Company. Forbes. https://www.forbes.com/sites/nazbeheshti/2018/09/17/3-strategies-to-build-a-strong-company-culture/#37a95bd32732