Financial ManagementExecutive Summary

My organization has a fairly high commitment to VBP, and I believe that with a plan it can become even more engaged with VBP over the course of the next three years. While one might naturally think that those who deliver medical services are the most important – they are very important – I would like to key in on the roles that the Finance, Purchasing and IT departments play in achieving the balance between high quality service delivery and cost control. By engaging all of the relevant stakeholders, and making VBP a central focus on the basis, with consistent messaging over the course of the three years, it is believed that we can set and achieve some fairly aggressive goals with respect to meeting VBP objectives.

All three of the departments will need to prepare by taking the time to review how the VBP program works, and understanding how their departments contribute to these objectives. Then, each department will need to outline specific details of their strategies, including the steps that they will take to specifically influence the achievement of VBP objectives. The first steps will need to be outlined clearly, but this is a continuous process, so one of the biggest things will be to ensure that there is commitment to continuously seek to achieve these objectives over the course of the next three years.

There will definitely need to be some training in order to implement the strategy. First, the training will need to focus on the basics of VBP, which will provide the groundwork and context for each department, and the key managers within each department, to understand the role that they will need to play. The next phase of training will then need to be more at the functional level, where managers for each department will need to train their employees on the ideal behaviors that are necessary in order to succeed.

Organization's Current Status of VBP

Value-based purchasing is an "initiative that rewards acute-care hospitals with incentive payments for the quality care provided to Medicare beneficiaries (CMS, 2017). The program originated as a tactical measure to increase the overall quality of health care, and is part of a larger reform project (CMS, 2017). In order for a healthcare facility to excel at VBP, it needs to deliver high quality service, but do so at a cost that fits within the payment structure for Medicare. Because of Medicare's high bargaining power, it dictates the rates that it pays to healthcare providers. By also dictating quality levels, it forces healthcare facilities to excel at efficient service delivery that is highly reliable and also comes in at low cost. My organization is committed to VBP as a means of bringing in high volumes of Medicare patients, so it has built VBP strategy into most of the different departments.

My current organization has embraced VBP to a fairly high degree. There are several reasons that I believe that we have implement VBP to a significant degree. First, the staff are made aware of service standards, and of management's desire that we are able to receive money through VBP program. Second, we have restructured certain parts of the health care delivery around the needs of Medicare patients. This is part to deal with the aging population, but...

VBP standards are often discussed at the managerial level, and there is a high level of engagement with
VBP metrics among managers.

While management does not specifically state that VBP is a high priority, the high visibility of the program, and the efforts undertaken to engage Medicare patients, indicates that value-based purchasing is a priority for senior management. At my level, a high degree of awareness of VBP has been created, and there are certainly some actions undertaken that appear to support the idea that VBP is a priority.

Departments Impacting VBP

Value based purchasing is influenced by a number of different departments. Three most important are Finance, Purchasing and Information Technology. There are different reasons that each of these contributes to achieving VBP targets for patient care. The first is fairly obvious. The Finance department tracks the costing – what it costs for each procedure, and then works with the different functional departments to find ways to keep the cost at a level where VBP goals are being met. Finance is uniquely strong in its ability to track financial transactions. Finance is also the final line of control. By setting budgets, and through examining of costing, the Finance department plays a critical control function to ensure that the hospital is able to treat Medicare patients at a profitable level, especially taken advantage of the funding available through the value based purchasing formula.

The second critical department is the purchasing department. While Finance records the transactions, and exerts control, Purchasing is ultimately responsible for ensuring that medical equipment and supplies are brought in at a price that allows us to be able to deliver value-based treatment. By sourcing supplies from the lowest-cost suppliers, buying in bulk when it is cost-effective to do so, and other purchasing functions, the Purchasing department provides the health care practitioners with the tools to deliver an excellent standard of care at the lowest possible price that can be achieved without compromising that care.

The third department that can play a critical role is the Information Technology department. Obviously the departments responsible for medical care matter as well, but IT is playing such a transformative role in healthcare in 2018. The use of remote monitoring, telemedicine, various apps, decision-making assistance, and other technological advances can result not only in dramatically superior health outcomes at much lower costs, but also lower malpractice risk as well. Information technology is revolutionizing the way that healthcare is delivered in America. The interesting thing is that while IT has demonstrated positive transformation in most sectors, it has not yet had the promised results in healthcare (Agha, 2015). What this means in part is that many healthcare organizations have not been sufficiently strategic in their choice of what technologies to adopt and how those technologies should be used. If IT works with the medical delivery teams and with Finance, it can actually ensure that only the technologies that genuinely add value to the organization are adopted, which would result in lower costs of service deliver,…