The secretary of the Department of Health and Human Services (HHS) has been instructed to “provide affordable, quality health care for all Americans and reduce the growth in healthcare spending.” As HHS seeks ways to get more for less, most of us believe value based purchasing (VBP) could be a transformational agent of change. In the article Healthcare reformers are focusing on value; are you?, published in the August, 2009 issue of Healthcare Financial Management, authors Hal Andrew and Gunter Wessels describe the proposed VBP programs, the challenges they pose to hospital executives, and some proactive steps leaders can take to maintain high performance on outcomes measures while controlling costs.

The top recommendation for raising VBP performance is to reduce variance in care processes. Noting that process variance can occur at the departmental or enterprise level in a hospital or health system, Andrew and Wessels write, “The care pathways that specific patients embark upon when admitted intersect with numerous departmental processes, each with its own variance. Therefore, the overall LOS, profitability, efficiency, and outcome profile … retains substantial variance.” In one example, they ponder why one half of patients in a MS-DRG stay longer than five days while almost 20 percent stay longer than 10 days. They suggest such differences are most likely the result of an enterprise-wide variance: when multiple departments are allowed to retain their own processes, bottlenecks and “interruptions” occur.

The key principles of Care Value Management as defined by Clairvia, Inc., provide a path to reducing care process variations. The first step is to standardize processes and set patient care plans based on current knowledge. However, as each patient presents a unique set of problems, some variance is expected. To manage this inherent variance, caregivers need a toolset that allows them to modify and refine plans as each patient’s condition, treatment, and care evolve, with the immediate objective of moving the patient to the next desired level of wellness.

How does your organization manage care process variance? As VBP becomes a central feature of healthcare reform, we believe this will become a central question for healthcare providers – and we can all gain significant benefit from a discussion of how it is being answered in current practice.