Nurse Paper 5 Revision

Running Head: VALUE-BASED PURCHASING STRATEGIC PLAN 1

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VALUE-BASED PURCHASING STRATEGIC PLAN 2

Value-based Purchasing Strategic Plan

A. Introduction

The health sector in the United States has faced economic challenges because of the

recent recession and fluctuations in the country’s economy. In addition, the Affordable Health

Care Act needs health care organizations to provide high-quality services to patients at lower

prices (Adkinson & Chung, 2014). The dynamism in the economy and requirements for the

health care organizations has resulted in an increased reduction of revenues for health care

organizations. As a result of the external forces, health care organizations have been forced to

develop strategies that will facilitate the delivery of high-quality patient care services at a lower

cost. Most health care organizations in the United States are shifting from Fee For Service (FFS)

payment approach to Value-Based Purchasing (VBP) program in their operations. Value-Based

Purchasing program is an essential strategy that offers good incentives to the health care

providers as well as providing quality services to the patients at a lower cost (Blumenthal &

Jena, 2013). In this new approach, service quantity is no longer a factor of consideration, and the

program also helps the management of health care organizations to monitor, measure, and

evaluate the performance of health care facilities. This paper develops a value-based purchasing

program for health care organization by assessing the current status and explaining the roles and

responsibilities of stakeholders as well as functions of various departments in the successful

implementation of the value-based purchasing program.

A1. VBP Degree of Implementation

Value-Based Purchasing is a program in the health care sector that is also known as Pay

for Performance. It is a payment approach targeted at offering financial incentives to physicians,

health care providers, and medical groups. It is a rewarding system that appreciates the efforts of

VALUE-BASED PURCHASING STRATEGIC PLAN 3

the physicians based on the quality of service rather than on quantity as in the case of fee for

service payment model. In the United States, Value-Based Purchasing is gaining more

acceptance, as it is a necessity required by the Affordable Care Act. The approach is essential

because it penalizes the health care providers for low performance, increased cost of providing

services, and for medical errors. Additionally, it is beneficial program because it lowers the cost

of acquiring health care services, improves the quality of health care organizations, and also

increases the satisfaction of patients from the services offered (Chee et al., 2016).

The value-based strategic plan is for my organization because it has not fully

implemented the VBP payment model. The low-level adoption is because of insufficient

expertise for evaluating the progress of the strategy in improving the organizational services.

Also, the organization lacks a set methodology for monitoring and measuring the impact of the

strategy in enhancing the provision of health care services. Additionally, stakeholders are

relaxed, losing goals, and vision for the strategy. Even more, the employees in the organization

have little knowledge about the working of the model hence, have little interest in understanding

how the model works. However, as suggested by the research group in the department of health,

value-based purchasing plays a critical role in helping organizations to monitor and measure the

performance of various health care organizations.

B. Strategic Plan

The strategic plan will stimulate the progression of value-based purchasing in the health

care organization. This strategic plan will include the roles of stakeholders, the functions of

departments, and also the current position of the organization in the implementation of the value

based purchasing program. The strategic plan will also enable the organization management to

identify the areas within the organization that compromises the quality of health care services as

VALUE-BASED PURCHASING STRATEGIC PLAN 4

well as suggesting the possible ways to improve services to patients through VBP. The following

three tables will help to explain illustrate the strategic plan for the three departments that are

critical in ensuring the organization implements the VBP successfully.

B1: Departments Impacting VBP

The significant departments impacting the implementation of the value-based purchasing

model are finance, human resource and marketing departments.

B1. Finance Department

B1A. Explanation of Roles and Function

 The finance department will be responsible for all organizational revenues and

any other related costs for offering the healthcare services.

 It is important to note the implementation of the VBP can negatively impact the

financial position of the organization if the financing process is not well managed. For instance,

the finance department will be responsible for exploring the complexities that may arise because

of the changes in the cash flow following the implementation of VBP program.

 The finance department also has the role of determining, adopting and

implementing strategic approach for accommodating the changes in the financial environment.

 The financial experts will also play an important role of determining and

regulating financial risks through collaboration with other players in the implementation process.

 The finance department also has the mandate of advising for the source of long

term financing for successful implementation of VBP.

 The finance department also has the role of giving information to managers to

facilitate effective decision making regarding the payback period for adopting VBP.

B2. Goals

 To reduce operational cost during and after adopting value-based purchasing

payment program

 To develop budget to ensure success in the implementation of the value-based

purchasing program. The budget will include the cost necessary changes; change over strategy,

marketing activities and the budget for training staff for the new program.

 To generate a profit increment of 50% within 12 months after launching of the

value-based purchasing strategy.

B3. Attaining Quality Outcomes in patient

care over next 3 years:

 An increase in the number of

patients visiting the hospital for health care

services.

 Improvement in the satisfaction

levels of patients because of the staff are highly

trained in performing their duties.

 Patients are more willing to pay

for the services they receive because of the

Attaining Quality Outcomes in

reimbursement over the next 3 years.

 Increased willingness of

physicians to use their own resources in

offering the best quality of services to patients

(Zhao et al., 2015).

 The physicians are willing to go

an extra mile of ensuring patients is satisfied

form the services offered.

VALUE-BASED PURCHASING STRATEGIC PLAN 5

valued quality of the service.

B4. Critical Key Points

 Monitoring the financial activities closely and regular preparation of

financial statements to tracking and recording purposes.

 Management of cash flow from health care services

 Increased focus on budgeting to facilitate finance of the value-based

purchasing program.

 Integrating the value-base purchasing model with a new financial model to

address the new needs

B4A. Marketing the Key Points

 Staff mentorship and development for the finance department

 Identifying necessary resources for the finance department operations

 Teaching the staff members about the influence of value-based purchasing

in in financial performance of an organization.

B6. Coordinating Informational Events

 Doing every finance

department information through the

organizational information technology

database

 Adjustments in the

finance department will be

communicated to the management in

good time in order to make adequate

decision.

B6. Coordinating Educational Events

 The department will hire

external auditors to offer help in

preparation of financial statements.

 The finance department

will provide all financial information to

the organization management.

B1. Human Resource Department

B1A. Explanation of Roles and Function

 Human resource department deals with human capital of the organization.

 The department plays the role of maintaining the knowledge and

informing the human capital about the duties in supporting the implementation of the

VBP.

 The department also has the mandate of developing training programs for

staff in the organization on how best to use the VBP strategy.

 The department is also responsible of evaluating the efforts of the staff

members in providing quality health care services after the adoption of the VBP

approach.

 Generally, the human resource department is responsible for monitoring

and evaluating the performance of the human capital in the organization.

B2. Goals

 To acquire quality individuals to join the staff team to ensure success in

adopting the value based strategy.

 To train all staff members how to use value based purchasing program by

the end of the adopting period.

 To develop training manuals that will remind the staff about their roles in

VALUE-BASED PURCHASING STRATEGIC PLAN 6

operating under the value-based purchasing system.

 To develop strategic ways of monitoring and evaluating the performance

of physicians after the launch of the value-based purchasing strategy.

B3. Attaining Quality Outcomes in patient

care over next 3 years:

 The best candidates

serving as staff members will ensure

quality is observed in offering

healthcare services.

 Training will enable the

physicians to see the value of value-

based purchasing strategy in receiving

incentives.

 Developing training

manuals will help the physicians

remain updated about how they need to

perform their duties.

 Monitoring and

evaluation of performance will make

staff work extra hard to attain more

recognition.

Attaining Quality Outcomes in

reimbursement over the next 3 years.

 After three years, the

staff would have learned the necessity

of focusing on quality rather than

quantity.

 The healthcare

physicians will focus more on offering

quality services to patients regardless of

the needed effort to make sure

customers are satisfied.

B4. Critical Key Points

 The health organization is committed to offering high quality services to

patients

 The aim of value-based purchasing strategy is to improve patient

satisfactions

 The need of the new needs of the value-based purchasing program

 The value of the value-based purchasing program compared to the fee for

service system

B4A. Marketing the Key Points

 Communicating the best channels for the staff members to learn about

value-based purchasing strategy

 Continuous education and training to the staff members on VBP

 Motivation and mentorship for staff members

 Training the staff members about the working of the value-based

purchasing system

B6. Coordinating Informational Events

 Availability of database

management system to keep system

logs for staff members

 The inter-departmental

relationship will be digitized to easily

track the needed information

B6. Coordinating Educational Events

 Every member of the

department will be informed about the

activities of the department through

mails and relevant memos.

 All relevant activities

will be facilitated with respective

departments

VALUE-BASED PURCHASING STRATEGIC PLAN 7

B1. Marketing Department

B1A. Explanation of Roles and Function

 The main function of the marketing department is to define the brand of

the organization. That is, the marketing department will serve the purpose of defining

what the organization does as well as services for patients.

 The marketing department also has the mandate of conducting campaign

management for the marketing activities. That is, the department will serve the role of

identifying key products and services to focus on and the best way to communicate to

customers. The role will be achieved through promotion and description of services and

products offered in the organization.

 The marketing department will also serve the purpose of producing

internal communication to make the staff understand the company values, priorities and

goals. The role will be achieved through carrying out market research to realize the needs

of customers and how they perceive and receive the services and products.

B2. Goals

 To gain at least 50% of the total market share within a period of 12

months after implementation of the VBP strategy.

 To conduct market research about the customers during the

implementation period to realize what the patients’ needs in terms of quality of services.

 Make internal communication to the internal stakeholders about the needs

of customers concerning the cost and the quality of services.

B3. Attaining Quality Outcomes in patient

care over next 3 years:

 Patients will be more

informed about the healthcare services

offered in the organization.

 Conducting marketing

research will facilitate realization of the

needs of patients and their willingness

to pay for high quality services.

 Furthermore, internal

communication will enhance

collaboration between different internal

stakeholders in playing their roles to

ensure patients are satisfied with the

quality of services.

Attaining Quality Outcomes in

reimbursement over the next 3 years.

 The marketing

department will ensure the organization

has broadened understanding of the

market.

 While conducting

marketing research, the target

customers will acquire important

knowledge concerning the services

offered by the organization.

B4. Critical Key Points

 Doing market and customer research

 Developing and ensuring availability of marketing resources such as

advertising materials which may include billboards and posters.

 Informing staff member the expectations of the new model

B4A. Marketing the Key Points

 Provision of necessary guidance to the team responsible for marketing activities.

 Setting the level of awareness to be reached by the marketing team

VALUE-BASED PURCHASING STRATEGIC PLAN 8

 Making available the marketing metrics to help the marketing team to set their

goals.

B6. Coordinating Informational

Events

 Constant checking of

marketing materials to ensure they are

relevant in supporting the aim of

adopting value-based purchasing

strategy.

 Incorporating an

information technology system that

support marketing system

B6. Coordinating Educational Events

 Automating the

marketing systems to keep a close

check on all activities.

B5. Ethical Clinical and Ethical Business Practices

The reforms in the health care operations are centered on improving patient care services.

The implementation of the value-based system is likely to be faced with some ethical dilemmas

among the health care practitioners. However, with the application of the ethical principles, the

physicians and other staff members will be able to operate in an ethically both in the area of

business and clinical practices. The ethical principles to consider and incorporate in the

implementation of the value-based purchasing are include beneficence, nonmaleficence, fidelity,

and justice. In performing the clinical practices, the nurses will observe the principle of

beneficence, which means doing good to the patients. It is rational for the nurses and other

practitioners to offer healthcare services in a way that will improve the health of the patients

(DeCamp et al., 2018). Based on the strategic plan, the three chosen departments have goals

aimed at improving the quality of healthcare services. The principle of nonmaleficence requires

the health practitioners to do no harm to the patients either intentionally or unintentionally. The

principle of nonmaleficence is applicable to all nurses and other health care practitioners because

they need to focus on practices that improve the health of all patients (Bailes, Rachel & Keller,

2014). Even more, the nurses need to respect the decisions of patients when offering the

VALUE-BASED PURCHASING STRATEGIC PLAN 9

healthcare service. It is in line with justice and fidelity ethical principles that require medical

practitioners to remain faithful and act in a way that promotes the health of the patients.

The ethical principles also apply to the business practices which the organization is

involved in. In the perspective of business practices, it is imperative for the various departments

to engage and conduct operations in an ethical manner when interacting with other healthcare

organizations. For instance, the marketing department needs to provide true information about

the health services offered in the organization to enable target customers to make informed

decisions. It is important to consider the applicability of the ethical principles when competing,

advertising, and also presenting information to the general public. It is essential to note that the

ethical principles go hand in hand with the value-based strategy hence, influencing the ease of

realizing the benefits of adopting the strategy.

B7. Timeline

Time

Increments

Finance Department

Human Resource

Department

Marketing Department

0-9 months

 Brainstorming

about the needs of

different departments

such as the number of

staff needed.

 Identifying the

necessities that the

members of the staff

need to know about

value-based purchasing

strategy

 Thorough

consumer and market

research about the

services that patients

need.

10-18 months

 Developing the

necessary information

system to support value-

based purchasing

strategy

 Preparing the

training and education

content

 Identify the target

patients and their needs.

 Development of

promotion and

advertisement materials.

19-27 months

 Training the staff

members within the

department

 Training the staff

members within the

department

 Training the staff

members within the

department

28-36 months

 Monitoring and

evaluating employees’

performance as well as

adjusting the objectives

to meet emerging needs

of the value-based

 Monitoring and

evaluating employees’

performance as well as

adjusting the objectives

to meet emerging needs

of the value-based

 Monitoring and

evaluating employees’

performance as well as

adjusting the objectives to

meet emerging needs of

the value-based

VALUE-BASED PURCHASING STRATEGIC PLAN 10

purchasing strategy.

References

Adkinson, J. M., & Chung, K. C. (2014). The patient protection and affordable care act: A

primer for hand surgeons. Hand Clinics, 30(3), 345-352.

https://doi.org/10.1016/j.hcl.2014.05.002

Bailes, W. B., Rachel, M. M., & Keller, S. (2014). Nursing's ethical responsibilities in value-

based purchasing. Online Journal of Health Ethics, 10(2).

http://dx.doi.org/10.18785/ojhe.1002.03

Blumenthal, D., & Jena, A. B. (2013). Hospital value‐based purchasing. Journal of Hospital

Medicine, 8(5), 271-277. https://doi.org/10.1002/jhm.2045

Chee, T. T., Ryan, A. M., Wasfy, J. H., & Borden, W. B. (2016). Current state of value-based

purchasing programs. Circulation, 133(22), 2197-2205.

https://dx.doi.org/10.1161%2FCIRCULATIONAHA.115.010268

DeCamp, M., Pomerantz, D., Cotts, K., Dzeng, E., Farber, N., Lehmann, L., ... & Tilburt, J.

(2018). Ethical issues in the design and implementation of population health programs.

Journal of General Internal Medicine, 33(3), 370-375.

https://doi.org/10.1007/s11606-017-4234-4

Zhao, M., Haley, D. R., Spaulding, A., & Balogh, H. A. (2015). Value-based purchasing,

efficiency, and hospital performance. The Health Care Manager, 34(1), 4-13.

https://doi.org/10.1097/HCM.0000000000000048

VALUE-BASED PURCHASING STRATEGIC PLAN 11

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