The Need to Understand Healthcare Payment Reform

By Brenda Mullan, MSN, RN, CDP, NE-BC

In recent years, Cleveland Clinic, like other U.S.-based health systems and hospitals, has prepared for the shift from volume to value-based care. In the professional practice of nursing, it’s imperative that we fully comprehend the dramatic and radical changes and implications to our professional practice and how these changes impact the patients we serve.

Why?

Population shifts in the U.S. have impacted healthcare priorities, as well as the practice of nursing. The average life span is increasing rapidly due to advances in public health, technology and clinical care. By 2020, more than 20 percent of the population will be 65 and older, with those older than 85 constituting the fastest growing segment of our society.

While extremely positive, the population’s greater life expectancy has challenged the healthcare system’s ability to provide efficient and effective continuing care. For example:

1. Changes in payment structure and reform initiatives are at the forefront of healthcare decision-making.
2. Healthcare reform has significantly altered the environment in which nurses and other healthcare professionals practice.
3. The emphasis on primary care, transitional care, bundled payments, and accountable care organizations underscores a fundamental shift in how the U.S. healthcare system functions today.

Nursing practice, education and research must respond to these changes in order to prepare nurses with the knowledge, competencies and skills required to practice in this redesigned care environment.

An overview: value-based purchasing

Through the Affordable Care Act (ACA) of 2010, which established the hospital value-based purchasing program, quality is now viewed through a publically reported lens that includes value-based payments surrounding clinical process, patient experience, structural process (i.e., outcomes), claims data and utilization measures.

Hospital value-based purchasing is part of the Centers for Medicare and Medicaid Services’ long-standing effort to link the Medicare payment system to a value-based system that improves healthcare quality, including the quality of care provided in the inpatient hospital setting.

This strategy is one of many designed to move the healthcare system from a payment structure that reimburses for quantity of care to one that focuses on quality, standards of care and best practices. It is based on four primary domains:

1. HCAHPS (the Hospital Consumer Assessment of Healthcare Providers and Systems survey; the patient experience of care)
2. Outcomes (morbidity and mortality)
3. Clinical Process of Care (core measures)
4. Efficiency (Medicare spending per beneficiary)

The domains change annually and nurses must understand what the changes mean for their practice.

For example in 2013, of the overall incentive payment, core measures accounted for 70 percent and HCHAPS accounted for 30 percent. This is in sharp contrast to the 2015 structure, in which core measures to date have accounted for 20 percent with the outcomes domain accounting for 30 percent.

Domain changes affect nursing practice

As we start 2016, we will again see a shift in value-based purchasing. It is expected that HCHAPS and efficiency will each represent 25 percent, outcomes will increase to 40 percent, and core measures will account for 10 percent.

As nurses, we must be innovative and continuously seek new ways to improve the quality of care from our current, fragmented system to one of integrated, collaborative and coordinated care.

The ACA presents nurses the opportunity to play an integral role in leading change. As never before, the nursing profession is looked to as a leading body in reform efforts, being viewed as a cornerstone of healthcare transformation.

However, without an intimate understanding of payment reform, a nurse’s professional practice can be negatively impacted. A sound understanding will enable us as nurses to fully appreciate the changes taking place in our daily practice, maintain a practice that is within our scope, and function at the highest level of our licensure.

Nurses need to understand the transition from the past to present and the radical changes taking place to be best positioned to meet our professional obligations while creating the healthcare system of the future.

Brenda Mullan is the Associate Chief Nursing Officer of Ambulatory Care for the Cleveland Clinic Health System.