Healthcare transformation a guide for the
hospital board member part 10
Healthcare - STEM (North Allegheny High School)
, TRANSFORMER
Reforming the payment system is not a panacea to improved healthcare; however, it is necessary. The
healthcare executive’s approach to payment reform must include four major elements:
1. Assess: The current misaligned payment system needs to change. It is imperative to assess
where the current payment system falls short or even has perverse incentives to “do the wrong thing.”
Identify areas where improved quality could negatively affect financial health. Consider how your
organization can mitigate these areas or acknowledge them and continue forward with quality
improvement.
2. Evaluate: With the glut of payment redesign programs, the organiza- tion must evaluate the
potential impact of different programs on the financial bottom line. Through simulation of data or
scenario plan- ning, calculating how various programs will affect the organization is useful in identifying
opportunities for improvement.
3. Design and test: Considering the assessment and evaluation, design payment reform models
that reflect your improvement opportuni- ties and priorities. It is important to recognize that no perfect
system can be designed; focus rather on developing a system that is simple and easy to understand and
set up to test specific elements of pay- ment reform.
4. Learn: In today’s environment, payment reform can be considered experimental. We do not
know the best answer or have the clear methods to get there. However, we can design multiple
experiments well so that we can learn and improve on them. A critical component of payment reform
design and implementation, learning is essential in transformation.
hospital board member part 10
Healthcare - STEM (North Allegheny High School)
, TRANSFORMER
Reforming the payment system is not a panacea to improved healthcare; however, it is necessary. The
healthcare executive’s approach to payment reform must include four major elements:
1. Assess: The current misaligned payment system needs to change. It is imperative to assess
where the current payment system falls short or even has perverse incentives to “do the wrong thing.”
Identify areas where improved quality could negatively affect financial health. Consider how your
organization can mitigate these areas or acknowledge them and continue forward with quality
improvement.
2. Evaluate: With the glut of payment redesign programs, the organiza- tion must evaluate the
potential impact of different programs on the financial bottom line. Through simulation of data or
scenario plan- ning, calculating how various programs will affect the organization is useful in identifying
opportunities for improvement.
3. Design and test: Considering the assessment and evaluation, design payment reform models
that reflect your improvement opportuni- ties and priorities. It is important to recognize that no perfect
system can be designed; focus rather on developing a system that is simple and easy to understand and
set up to test specific elements of pay- ment reform.
4. Learn: In today’s environment, payment reform can be considered experimental. We do not
know the best answer or have the clear methods to get there. However, we can design multiple
experiments well so that we can learn and improve on them. A critical component of payment reform
design and implementation, learning is essential in transformation.
