Preparing for Value: Evaluating Organizational Culture in Health Care Transformation

Abstract

The health care industry is experiencing a transformative shift from traditional fee-for-service models to value-based care (VBC), emphasizing improved patient outcomes, enhanced quality, and reduced costs. While Centers for Medicare & Medicaid Services Innovation Center models focus on financial and quality outcomes, a critical opportunity for reform lies in organizational culture. VBC signifies a cultural and systemic evolution aligned with the quintuple aim of enhancing equitable patient outcomes, improving quality, reducing costs, and prioritizing provider well-being. Cultural impacts play a pivotal role in this transformation.

Readiness Imperative

The health care industry is undergoing a significant transformation, shifting from traditional fee-for-service models to Value-based care (VBC). VBC is a health care delivery model that emphasizes quality and patient outcomes over the volume of services provided.¹ The VBC framework integrates clinical principles, payment models, and health information technology to enhance health care outcomes and patient experiences at reduced costs. Health care organizations must adapt to this new paradigm to thrive in the evolving healthcare landscape.

While the Centers for Medicare & Medicaid Services (CMS) Innovation Center models have concentrated on achieving financial and quality outcomes,² a less conspicuous opportunity for reform lies within the organizational culture (ie, the values, behaviors, goals, attitudes, practices, and beliefs shared across an entire organization³), a pivotal area where health care entities can instigate substantial change. A systematic review found that culture was positively associated with a range of system-related patient outcomes, for example, mortality rates, readmission rates, and medication errors.⁴ These examples align with current-payer VBC programs in clinical practice today. Clinical outcomes related to culture were falls, hospital-acquired infections, and physical and mental health status. For years, government and commercial payers have leveraged Health Care Effectiveness Data and Information Set (HEDIS) measures around all-cause mortality, readmission, and medication management for key clinical conditions around asthma, diabetes, and heart failure. These measures formed the cornerstone of several early pay-for-performance national programs such as the Physician Quality Reporting System (PQRS) and Meaningful Use (MU). Beyond traditional clinical condition management, cultural impacts have been associated with well-being outcomes, notably patient satisfaction and quality of life. These additional measures highlight the quintuple aim goals and offer a direct opportunity to correlate positive cultural traits with value-based outcomes.

Transformation Requires Change Leadership

A recent article in NEJM Catalyst highlights CMS leaders who have identified three common themes among successful initiatives that have driven transformative change. First, participants consistently employed common care coordination strategies for person-centered care, emphasizing an integrated approach considering everyone’s unique needs and preferences. Second, VBC models tailor health care practices to local needs, with evidence suggesting that the customization of care delivery is essential for meeting the specific health care requirements of diverse communities. Third, the impact of care delivery trends and changes extends beyond the confines of the CMS Innovation Center models and their initial scope of innovation.⁵

In a profound cultural and systemic evolution, VBC necessitates intentional leadership for all health care organizations. Aligned with the quintuple aim, VBC enhances patient outcomes, improves health care quality, reduces costs and care disparities, and prioritizes the well-being and satisfaction of health care providers.⁶ Thus, health care organizations that align with the principles of VBC can cultivate performance climates that make a more sustainable, productive health care system.

As a delivery model, VBC emphasizes quality and patient outcomes over the volume of services. The traditional fee-for-service model rewards quantity, often leading to unnecessary procedures, fragmented care, and excessive financial burdens for purchasers. In contrast, VBC promotes better patient outcomes, population health management, and cost containment while reducing health disparities.⁶

Successful implementation of VBC requires solid organizational commitment. Within the industry push and pull for VBC, there is a tendency to make hospital CFOs or managed care executives responsible for this body of work. Although CFOs are very skilled in finance and budgeting, VBC also requires strong articulation and internalization of vision. It elevates a culture of collaboration across all functions — and leaders must accept this mantle and persevere in this narrative. To ensure sustainable VBC infrastructure is established, cultural transformation requires an emphasis on people, communication, and engagement strategies. These skill sets require an investment across many functional areas and cannot be placed on a single leader or unit.

Significantly, while lower-cost care delivery is a typical outcome of VBC, this overt focus on cost containment may undermine the VBC model and prevent it from achieving other necessary measures of success for health care transformation sustainability.³ Success in serving patients differently must include other objectives, including ensuring health equity is embedded in the care delivery models, and provider engagement strategies that support financial risk and clinical autonomy.

Further, VBC succeeds by emphasizing prevention, reducing redundant care, and adopting consistent best practices in care delivery.⁷ It requires a culture of effective communication and collaboration between providers and patients as well as with other providers and health care leaders.

Vital Principles Are Foundational to Value-Based Care

Care Coordination: Team-based care ensures seamless transitions and improved outcomes across the continuum. ³Health care organizations should refine their care coordination skillsets, improve communication, maximize technology, and expand their networks to include various providers, including primary care, specialists, home health services, pharmacies, and community resources. Using care coordinators and care navigation platforms can increase consistency, streamline processes, and relieve burdens on the workforce and patients. Positive workplace and organizational culture assessments are essential to plan staffing, workflows, and tools to achieve desired outcomes.²

Patient-Centered Care: Patient-centered means that care providers acknowledge, respect, and respond to individuals' preferences, needs, and values. Patients are engaged in their care decisions and empowered to make informed choices. Correspondingly, the patient should remain at the center of high-quality care, which defines good outcomes and care that brings value. As health care delivery models meet the changing environment, engaging patients through education, shared decision-making, and technological advancements, such as telehealth services, will continue to be vital. Technology enables remote monitoring and open communication channels that empower patients to take control of their health and improve various outcomes. However, the introduction of novel technology can present challenges. Thus, providers and administrators should revise processes to enable increased communication time between providers and patients, which promotes accountability, customer focus, and empowerment.⁸

Population Health Management: VBC places a strong emphasis on preventive care and population health management. Instead of treating illness reactively, health care providers must proactively identify and manage health risks within their patient populations.⁷ This requires disease prevention, early intervention, and wellness promotion. To exceed VBC program goals, high-performing teams will need to navigate complex care models with ever-expanding technology advancements. Systems thinking, coordination, and integration will strengthen culture and drive population health success.

Quality Performance: In VBC, payment is tied to the quality of care and patient outcomes. Health care organizations are held accountable for their performance; they are expected to report on a range of metrics, including clinical outcomes, patient experience, and financial performance. This data-driven approach allows organizations to continuously evaluate their effectiveness and make programmatic improvements as needed.⁷ Financial rewards or penalties are linked to how well they perform, shifting the emphasis from quantity to quality, a movement consistent with organizational development and cultural tenets. Findings from a systematic review revealed types of culture positively associated with patient outcomes. For example, a “human relations”-type culture that focused on flexibility, supporting internal resources, and embracing values associated with belonging, trust, and cohesion was related to enhanced patient satisfaction. These values promote quality and elevate high-performing teams in a VBC environment.

Data-Driven Decision Making: Data analytics and health information technology will continue to play a pivotal role in VBC, informing care decisions. Organizations are investing in advanced analytics tools, including artificial intelligence and machine learning, to extract meaningful insights from patient data. These data insights could change care plans for an individual or the health of an entire population. Tremendous advancement is ahead but must be met with strong accountability models to the provider, care team, patient, and broader community served.

Alternative Payment Models (APMs): VBC seeks to contain health care costs by optimizing resources. By delivering appropriate, evidence-based care, providers can reduce unnecessary tests and procedures, improving cost-effectiveness while maintaining high-quality care. This principle also involves managing patient health cost-efficiently, possibly reducing hospital admissions and readmissions. There needs to be more than cost containment alone to solve the financial gap witnessed in the United States. APMs are mechanisms that replace or supplement traditional fee-for-service reimbursement and allow for the shifting of incentives to drive outcomes.⁷ Examples of APMs include accountable care organizations (ACOs), bundled payments, and capitation. APMs are designed with VBC principles, encouraging providers to manage costs while improving the quality of care through aligned provider incentives such as outcomes and satisfaction.

Organizations must consider the following:

Building a culture of collaboration

Collaboration and communication are vital within care teams and across health care settings. Organizations should continuously foster a culture of teamwork to support care coordination. Developing strong relationships with community organizations, post-acute care providers, and other stakeholders will improve care coordination and patient outcomes.⁸

Addressing financial and operational challenges

The financial challenges associated with VBC can be significant. Organizations must plan for upfront investments in technology and staff training, recognizing that the return on investment may take time. Leadership should develop financial models that support these changes and adopt strategies for risk-sharing, including infrastructural prerequisites, for example, data/analytics, care management, advanced primary care, practice transformation, and population health management.

Best Practices

Conduct organizational assessments

VBC transformation is not a one-time project but a continuous process requiring mechanisms for monitoring progress, evaluating impact, and adapting to change. Regular assessments by internal and external stakeholders can identify areas for improvement and guide strategic adjustments.

The authors recommend two kinds of assessments to support VBC transformation: 1.

Survey organizational culture to identify gaps that could undermine VBC implementation and practice.

Build cross-functional, multi-level, inclusive culture teams to perform root-cause analyses and develop strategies for tangibly strengthening culture (and performance).

Focus on capability development to drive and reinforce the evolution of culture, from leadership development to process improvement to customer service skills. Empower an implementation team and stakeholders to articulate key metrics for each priority. Define salient means of assessing progress, define the population to survey, evaluate other available data sources, and statistically tie metrics to various measures of overall success.

Establishing clear leadership and governance

Appointing leaders with a strong vision for VBC and developing governance structures to oversee the transformation process are crucial. Strong board and executive engagement for a multi-year transition is essential for stability and sustainability. There must be a willingness to comprehensively assess and reprioritize, removing obstacles to achieving value-based transformation.

Investing in training and education

The health care workforce must remain educated and well-trained in VBC principles and practices. Providing ongoing training and education for staff members will ensure they understand the new care model and can implement best practices while being supported as workflows evolve.¹

Continuously monitoring and adapting

To succeed, VBC requires regularly assessing progress, identifying areas for improvement, and adapting strategies. It also requires the entire executive team to focus on key verticals to ensure success. While rapid transformation is often necessary to adapt to changing health care models and address pressing issues, it can introduce challenges; particularly, the shift to VBC can have several impacts on health care organizations, providers, and patients.⁷ Pulling together a cross-functional portfolio positions the organization to reduce the unintended consequences of transformation, which might include the following:

Misalignment of strategy—both internally and externally

This could include cross-functional systems and processes requiring simultaneous implementation (and a history of those areas/teams not collaborating). Those involved in managing financial performance may expect immediate returns when a prevention-focused model requires longer-term investment, model maturation, and time for the approach’s benefits to accrue. It could also involve misalignment of payors and their practices with the new care delivery model. Thus, those who have been rewarded for providing more expensive tests and procedures may balk at a change in their projected compensation.

Challenges with change leadership

Some health care professionals may need help with rapid care delivery and reimbursement model changes. Resistance can stem from the fear of the unknown, a lack of training, or concerns about job security. This resistance can hinder the adoption of new practices and technologies. Importantly, behind seeming resistance, we often find highly committed colleagues unwilling to take risks or try approaches that may undermine their certainty around continuing to deliver typically elevated performance levels. That also makes building support for the VBC model a leadership challenge that leaders at all levels must tackle.⁷ That includes reassuring communication about the expectation for performance lags as new care delivery methods are adopted.

Financial instability

Investments in innovative technologies and training can strain budgets, while reimbursement models may take time to adjust. This can lead to financial instability, especially for smaller health care providers who may need more resources.¹ Health care organizations may limit services or shift financial responsibility to patients to control costs and meet financial targets. This can result in increased out-of-pocket costs, reduced access to necessary treatments, and disparities in health care quality based on patients' ability to pay. Cost shifting can undermine the principles of equitable care that VBC promotes.

The strain on infrastructure

Adopting electronic health records and health information technology is central to VBC. However, implementing these systems can strain the IT infrastructure of health care organizations. Issues such as data security, interoperability, and system failures can disrupt patient care and impact the overall success of the transition to VBC.

Provider burnout

The pressure to meet performance metrics and increased administrative workloads contribute to provider burnout. The demands of documenting, reporting, and meeting quality goals can negatively impact their well-being. Burnout can lead to decreased job satisfaction, increased turnover, and reduced quality of care. “Physicians, although still an essential driving force in the delivery of health care, may be focusing on metrics that are easily within their control, on predictable rewards such as generating collections, and on filling their operating rooms, rather than defining and implementing viable solutions to our current challenges.”⁹

Summary

VBC transformation is essential for health care organizations to succeed in the evolving health care landscape and align with the quintuple aim. However, it is an ongoing process that requires intentional leadership to meet the challenges of change. It requires health care organizations to engage actively in cultural and systemic evolution. By prioritizing person-centered care coordination, tailoring practices to local needs, and recognizing the broader implications of transformative initiatives, health care entities can contribute to a more patient-focused, equitable, and sustainable healthcare landscape.

Authors’ Contributions

K.M.J.: drafted the manuscript. L.R.: conducted literature search. K.M.J. and L.R.: analyzed findings and recommendations. All authors read and approved the final manuscript.

Footnotes

Author Disclosure Statement

No competing financial interests exist.

Funding Information

No funding was received for this article.

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