Tuesday, June 6, 2017

MACRA and The Balanced Scorecard

The Medicare Access and Chip Rauthorization Act or MACRA was passed in 2015. The law was passed to further many of the goals of the Affordable Care Act which went into effect in 2010. An important part of MACRA is the Quality Payment Program or QPP. QPP emphasizes improvements in healthcare quality and healthcare value by putting the focus on pay-for-value rather than fee-for-service. The Balanced Scorecard, a strategic management tool, may enable a healthcare organization to better meet the QPP objectives.

The Balanced Scorecard or the BSC was designed to encourage business managers to focus on more sectors of the organization than the financial sector in strategic planning. The managers are encouraged to consider three additional sectors, along with finance, when making organization-related decisions. The three additional sectors are the customer component, the internal operations component, and the learning and growth component of the organization.

These four components are also important in a healthcare organization. Of course a review of the financial component is important in determining the organization's ability to continue providing healthcare services. But the other three components -- the customer or patient component, the internal operations component, and the learning and growth component -- are also pertinent to the organization's ability to provide high quality, cost effective healthcare.

When analyzing a medical practice from a financial perspective, a medical practice might ask: What does the organization need to do to appropriately serve the patient while achieving and maintaining a healthy financial position? When analyzing the practice from the patient's perspective, the organization might ask: What does the organization need to do to provide the patient with high quality, low cost healthcare services?

When analyzing the practice from the internal operations perspective, the practice might ask: How can internal operations be improved to more effectively and efficiently serve the patient? And lastly, when viewing the healthcare organization from the learning and growth perspective, the organization might ask: How can the organization's personnel learn and grow so that the patient WILL be better served. Appropriate answers to these questions can motivate actions that allow the healthcare organization to improve the quality and value of patient services.

As clinical outcomes become more value-driven in healthcare, assessing quality and cost related outcomes becomes more important. And the BSC has gained prominence as a tool to measure outcomes. Therefore, the BSC is being used increasingly in the healthcare arena.

For example, an orthopedic medical practice consisting of fourteen surgeons implemented the BSC, and the tool has been beneficial for the practice. According to one source, "The BSC process resulted in increased engagement and ownership for the management team and was a positive exercise that created agreement about what processes and results are really important to our success." Some of the outcomes measured by the practice were similar to outcomes that are measured in the QPP -- type 2 diabetes and blood pressure for example.

Healthcare organizations can use the BSC to help satisfy the goals of MACRA. And since the BSC can be used to view the main components of an organization, the tool can help a healthcare organization achieve and maintain financial health while providing the patient low cost, high value healthcare.



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