(This is the first installment of a six-part series examining the role of clinical evidence in capital planning.)
In the old world of fee-based care, healthcare systems too frequently viewed capital investments as one-time decisions, largely determined by what they could afford at the time. Providers would determine the going rate for a procedure, and clinical departments were given a certain amount of leeway to acquire the technology and equipment they needed to provide care.
Volume-based calculations allowed providers to expect a predictable rate of return until profitability had been achieved. In that era, it wasn’t unusual for capital expenditure thresholds to be set as high as $25,000. Above that, a more formal committee approval process was required, characterized by a more rigorous, data-driven, and interdepartmental decision-making framework.
A Paradigm Shift
Today, in many locations of care, the threshold has fallen to anywhere between $5,000 and $10,000, depending upon a facility’s size, patient demographics, budget, profitability, and other factors. The reason? With the shift to value-based medicine, providers are now asked to deliver care at a flat rate, with reimbursement determined in large part by CMS and private insurers and based primarily upon patient outcomes—including measurable improvements in care.
The new math requires a different approach from healthcare providers. Reviewing all proposed investments through a more strategic lens will help them determine whether planned investments will support long-term goals and will enable them to incorporate into every capital acquisition decision all-important metrics that show measurable improvements in care.
The question is: how? We will examine this question in further installments.
To access the white paper from which this post was extracted, please visit our website.