Three forces are moving hospitals inexorably toward value-based physician reimbursements. First is the hospital’s ever increasing need to conserve precious resources as a result of declining reimbursements from Medicare, Medicaid and commercial insurance plans. Second are the increasing numbers of hospital-salaried physicians and the necessity to align their efforts with those of the hospital for quality and utilization management. Finally is the push toward global-reimbursements in the forms of Accountable Care Organizations (ACO), Acute Care Episodes (ACE) and CO-OPs (Consumer Operated and Oriented Plans).

The federal government implemented these new healthcare delivery vehicles in response to the unsustainable healthcare inefficiencies that have been increasing since the inception of Medicare in the mid-1960s. Cost escalations were exacerbated by the implementation of the Prospective Payment System that began paying hospitals and physicians using two different methods. This resulted in the misalignment of hospitals’ and physicians’ incentives that have resulted in wide variations in the use of tests and services, which are independent of patient populations or payment types.

Value-based hospital and physician reimbursements are integral to ACOs, ACEs and CO-OPs. Verras’ severity adjust clinical information for the implementation of physicians-directed, best practice improvements are the technologies and clinical process with which hospitals and doctors can improve all metrics of quality and efficiencies. The technology statistically analyzes inpatient and hospital outpatient data that are directly tied to clinicians’ process improvement activities and medical quality.  By focusing on processes rather than individuals eliminates the pernicious misalignment of hospital and physician incentives. This realignment of incentives plus reimbursing physicians who adopt their own, best-demonstrated clinical protocols to document improvements, ACOs and other collaborative organizations can steadily improve the enterprise’s overall performance. The methods and algorithms necessary for the equitable financial allocations among hospitals and physicians that participate in these new delivery mechanisms are core competencies of Verras.