Value-Based Care Needs Activity-Based Costing
In healthcare’s cost management sector, the focus is narrowing in on value-based care rather than the fee-for-service model.
Tom names Rob DeMichiei, C.F.O. at University of Pittsburgh Medical Center as the most forward-looking person in the industry, improving precision and efficiency. He has worked closely with Health Catalyst to build a strong model for activity-based costing.
Through a value-based approach, it now matters exactly how much the procedure costs, which tools are used, how long it took, who administered the care, and more to inform activity-based costing and manage more precisely. By understanding this data, we can see what is driving cost and achieve improvement from there.
With resources growing in scarcity and nurse and doctor shortages on the horizon, it is increasingly important to get the right people in the right place.
Trendy or Tremendous?
We’ve seen cycles come and go, says John. Will this trend stay?
Tom believes it is so important that if we don’t solidify value-based care and activity-based costing as pillars of structure, we will bankrupt the country. Organizations are realizing that current costs are not sustainable and that cost management and effective use of our resources are paramount.
Part of this effective use of our resources is bringing the physicians into the circle. Bobbi has found physicians are hungry for the data and to understand how this works. Tom agrees that transparency is key, as illustrated in findings from Intermountain Healthcare.
Intermountain Healthcare shared cost data with doctors about their antibiotic assistant. Once the cost was showcased next to its predicted efficacy, doctors utilized the cheaper drug.
“We can include them in the process, and they can be part of the solution,” says Tom.
Patients should be included in this conversation, too. Not only transparency in cost, but about their options. Patients need to be decision partners because it is their care.
Taking Health beyond Healthcare
How can we promote better health rather than only better healthcare?
Companies can empower their employees to take care of themselves, take charge of their health and compete for well-being through gamification systems and incentives in the workplace.
For Health Catalyst, this strategy has kept their healthcare prices flat, instead of rising as they had before implementation.
“If an employer has a healthy workforce that they take really good care of, they’re going to get a lot more productivity, they’re going to have happier, healthier employees that can contribute more to their success,” says Tom.
A Mindful Approach
Perhaps, psychological tendencies should shape our approach to healthcare delivery. Health Catalyst is investigating this topic alongside New York Times Bestselling Author Gretchen Rubin. Her book the Four Tendencies identifies individuals as either upholders, obligers, questioners or rebels.
By understanding a patient or fellow employee’s tendency, you can administer better healthcare deliveries and processes.
Capture Your Data
Cost management is just as important as understanding how germs spread if you don’t wash your hands.
To deliver quality healthcare, you need to understand the cogs and wheels that move it forward. Health Catalyst provides the necessary tools for capturing your activity based costing so you and your patients succeed.