Brady Augustine

A special consultant on various projects at SCPC, he is a health care leader with 15 years experience managing teams of 4-50 and budgets of $250K - $14M for private sector firms and government agencies.

In his last four positions, he added $100M+ in value, reported directly to C-level officers and was recognized as an innovative problem-solver and team-builder with excellent research, written, and verbal communication skills.

A Board Member at Texas Institute of Healthcare Quality and Efficiency. He's also on the Board of Directors at Texas Association of Healthcare Quality.

A former Chief Medical Officer Central and West Texas Divisions HCA at St. David's Health, Berkowitz was also a National Practice Leader at Hay Group, and Managing Director, Medical Affairs at Harris Methodist. He has been on the Board of the Texas Hospital Association.

Defining VBP

The concept of value-based health care purchasing, according to CMS, is that buyers should hold providers of health care accountable for both cost and quality of care. Value-based purchasing brings together information on the quality of health care, including patient outcomes and health status, with data on the dollar outlays going towards health. It focuses on managing the use of the health care system to reduce inappropriate care and to identify and reward the best-performing providers. This strategy can be contrasted with more limited efforts to negotiate price discounts, which reduce costs but do little to ensure that quality of care is improved.

According to the U.S. Department of Health and Human Services' Agency for Healthcare Research and Quality, the definitions of Value-Based Purchasing are as follows:

The Theory of Value-based Purchasing (VBP)

The concept of value-based health care purchasing is that buyers should hold providers of health care accountable for both cost and quality of care. Value-based purchasing brings together information on the quality of health care, including patient outcomes and health status, with data on the dollar outlays going towards health. It focuses on managing the use of the health care system to reduce inappropriate care and to identify and reward the best-performing providers. This strategy can be contrasted with more limited efforts to negotiate price discounts, which reduce costs but do little to ensure that quality of care is improved.

The key elements of value-based purchasing include:

• Contracts spelling out the responsibilities of employers as purchasers with selected insurance, managed care, and hospital and physician groups as suppliers.
• Information to support the management of purchasing activities.
• Quality management to drive continuous improvements in the process of health care purchasing and in the delivery of health care services.
• Incentives to encourage and reward desired practices by providers and consumers.
• Education to help employees become better heath care consumers.

In a system based on value-based purchasing, employers and other purchasers gather and analyze information on the costs and quality of various competing providers and health plans. They contract selectively with plans or provider organizations based on demonstrated performance, or at least proposed approaches for improving performance. Ideally, quality information becomes a factor in the setting of plan prices, and employee contributions vary with each plan's "score," which reflects a combination of quality and cost indicators. In this manner, the best performing plans and providers are rewarded with greater volume of enrollees or patients.

The Reality of Value-based Purchasing

Our mapping of the terrain of value-based purchasing leads to the following conclusions:

• There are a limited number of employers and coalitions acting in a bold and innovative fashion to implement the principles of value-based purchasing. These pioneers are collecting data on both cost and quality, using the data to select plans and providers, and developing financial incentives for employees to enroll in plans with good performance records. Some are also working directly with providers to identify and implement best medical practices.
• There are a moderate number of employer purchasers who are taking cautious first steps, most typically by asking providers and health plans for information. These dabblers rarely, however, feed that information into actual purchasing decisions.
• A very large number of employer purchasers are not undertaking any serious initiatives to build quality considerations into purchasing. The do-nothings look to carriers and plans to clamp down on providers' costs, and are largely indifferent to how that is done.

According to CMS, that means:

• CMS projects $110 billion in funding cuts by 2019. Most of those cuts will be in decreased Medicare reimbursements administered through a variety of reform programs, including the Hospital Value-Based Purchasing Program (VBP).
• With the number of baby boomers adding to the Medicare and Medicaid costs, hospitals will see 60-70 percent of their reimbursement coming from Medicare by the year 2030.
• That means that even for small hospitals where revenues are minimally affected by Medicare reimbursements today, the pending decrease in employer and private payer cross-subsidization of Medicare and Medicaid as well as baby boomers aging into Medicare, hospitals will see 60-70 percent of their reimbursement coming from Medicare by the year 2030.

Also according to CMS, the Patient Experience of Care (or Patient Satisfaction), is measured by the following criteria:

A random sample of patients discharged from hospitals across the country are surveyed and asked questions regarding their feelings and perceptions about their hospital stay. This measure combines hospital performance on questions that asked patients their levels of satisfaction with some of the following elements of their stay:

• How well nurses communicated with patients
• How well doctors communicated with patients
• How responsive hospital staff were to patients' needs
• How well caregivers managed patients' pain
• How well caregivers explained patients' medications to them
• How clean and quiet the hospital was
• How well caregivers explained the steps patients and families need to take to care for themselves outside of the hospital (i.e., discharge instructions)

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