Dec 2, 2024
Join us for this enlightening episode of VRTAC-QM Manager Minute, where we explore the transformative power of Value-Based Purchasing (VBP), also known as Performance-Based Payment (PBP). In the studio, we have Chip Kenney, Co-Project Director of the VRTAC-QM, and Lisa Mills, a consultant and subject matter expert in VBP, sharing their expertise.
VBP is more than just a financial model—it's a strategic shift designed to drive better outcomes for individuals with disabilities. By aligning provider incentives with measurable performance outcomes, State Vocational Rehabilitation Agencies (SVRAs) can enhance the quality of services, improve consumer results, and optimize costs.
Tune in to hear Chip and Lisa discuss how SVRAs can harness the power of this approach to revolutionize service delivery and create a meaningful impact. Whether you're considering adopting VBP or seeking to refine your approach, this episode is packed with insights you won’t want to miss!
Chip: Virginia reached out and they wanted to include value based purchasing specifically in their Disability Innovation grant. I said, this is an opportunity we can't pass.
Lisa: Is there anything about our payment structure that incentivizes or rewards this kind of quality that we're saying we're not getting, thus reduce the amount we're investing in unsuccessful closures.
Chip: When we can get to that point where we can identify and measure and demonstrate and get quality outcomes that will move this whole system a gigantic step forward.
Intro Voice: Manager Minute brought to you by the VRTAC for Quality Management, Conversations powered by VR, one manager at a time, one minute at a time. Here is your host Carol Pankow.
Carol: Well, welcome to the manager minute. Joining me in the studio today are Chip Kenney, Co-Project Director of the VRTAC for Quality Management, and Lisa Mills, Consultant and Subject Matter Expert to the QM on Value-Based Purchasing. So here's a little context for our listeners. Value-Based Purchasing, also known as Performance-Based Payment, is a model that offers financial incentives to providers for meeting certain performance measures. And as state rehab agencies look to improve outcomes for individuals with disabilities, the quality of purchased VR services, and overall cost effectiveness. A Performance-Based approach might be an option, so I don't want to steal their thunder, and I'm going to let my guests discuss what they're doing today. So let's dig in.
Lisa, lets' start with you. Can you tell us a little bit about yourself and how did you find your way kind of into this VR space?
Lisa: Sure. So I've been in the world of disabilities for my career, for the entire career. So, 33 years, I think where now I've lost count. But about 20 years ago, I got really interested in employment working with Self-advocates way back before there was such widespread support for ending Subminimum wage. You know, the support that we do see now, but that was at a time when that it wasn't even being discussed. But Self-advocates were very clear that they wanted to earn more money and have more opportunities. So I got interested in supported employment and why we weren't using it very much. And so I started working with Medicaid and long term support agencies on improving employment services and outcomes. Back then, there was something called the Medicaid Infrastructure Grants, which allowed states to create Medicaid buy ins for working individuals with disabilities. So I really dug in around what were we doing around employment services. And of course, that brought us to the relationship with VR. And about 16 years ago, I started working on customized employment and developing ways to pay for customized employment, and worked with a couple VR agencies at the time on payment structures for customize. And then most recently, I'm a mom of a transition age son who used VR supported employment services to get his first and second jobs, and he's been employed in competitive, integrated employment since 2020. He's about to turn 21 and that has changed his life. So I'm a firm believer.
Carol: Good for him. That's really cool to know. I always love it finding out the stories people have, because you never know, we all get here a different way. But I love your path. So Chipper over to you. And I'm going to say Chipper because I'm naughty. He Chip is my colleague. So for our listeners I do like to rib Chip a bit. So Chip, how did you find your way into the VR space?
Chip: So very similar to Lisa. My whole career has been in public rehabilitation for a bit then technical assistance centers, but fast forwarding to about 2009 was interested in customized employment and its applications, and the need for VR systems to have an employment system that really addressed what people with the most significant disabilities needed to be successful, and I was sort of glommed on to that space ever since. And then with the passage of WIOA, it just seemed a really necessary connection that VR agencies and systems have something new they can offer. People who would have considered going into sheltered employment now are coming out. What are you going to offer them that's new and different from when they went in and have been at it ever since, mainly focused on the implementation side of it, because there's a bunch of trainers in that space and they're all really good. But we learned early on that it takes an infrastructure to embed, implement and sustain customized employment over a period of time. And so that's been my focus the last several years. I mean, we're still learning a lot. And rate structure is part of that, which, I mean, I've known Lisa for years too, but rate structure is something every agency struggles with. And when the opportunity came to work with Lisa on this and move this forward, I thought, this is a big missing piece that we have to fill.
Carol: Absolutely, I'm underscoring that 100% because we know we get a lot of rate work with our QM work and the whole idea and customized employment with that sustainability. You can have the great idea. And we're going to do the thing and we're all excited. But then what happens. Year one and two and three and four as it goes on and it all fades away. And we don't want that to fade away. We need to have that good sustainability plan. So Chip, how did you get involved in bringing Lisa on board? What was kind of the impetus of that?
Chip: Virginia reached out. The state of Virginia reached out to us and they wanted to include value based purchasing. And they mentioned that specifically in their Disability Innovation grant, and somebody referred them to me. I mean, I knew a bit about it, but then as soon as I saw the Lisa connection and started reading her work on it, I said, this is an opportunity we can't pass, even though I don't have any experience. But Lisa brings all that and the knowledge and the background and said, it's really important to be a part of this.
Carol: Very cool. So, Lisa, I understand you have a very unique superpower. You can speak and interpret languages across multiple partner systems. How did you develop that?
Lisa: Well, I guess I'm a bit of a policy wonk. I did a lot of interviewing of people from different systems to try to understand what was going on with partnerships, what were the challenges. And this was probably 12, 13 years ago. I was doing some work with ODEP at the time, blending and braiding. And when I was doing a lot of my interviews interviewing the different partners, including VR, I figured out that a lot of what was going on at that time was sequencing. It was really not blending or braiding, and if we wanted to get to braiding and ultimately to blending, I felt like we really had to find what was going on then as something foundational, you know? And that's where I kind of coined the term sequencing and said, this is really what we're doing, but we can help people understand then what it means to switch from sequencing to braiding, what it means to switch from braiding to blending, and really start to get people interested in the advantages of moving away from sequencing. So it really was just wanting to dig into each system enough to figure out what solutions might improve collaboration and outcomes. Sometimes it can be easy to lay out all the issues, right? Everything that's not working, but to really dig into each system and figure out where could we align ourselves, where are we aligned, and we just don't realize it? That was more, I guess, the policy wonk side of me.
Carol: I love that because I think I've been on lots of work groups over the years, I mean, I just have when we've worked between, you know, departments of education and your state Department of like maybe developmental disabilities or whatever you are calling it back in the day. And then in the VR system when we all had different ways of describing everything and we could get stuck in the what's the problem? Here's all the problems. We got problems. We have a million problems. Here's all the hundred problems we have to get through before we can get to a solution. But if you go in and go, I love that. Like, how are we aligned right now and what are the things that we could build off of right now instead of always focusing on that whole myriad of things? But I think understanding each other, how we speak about things and we may say the same word, but it means something different to each of us. Once we can kind of clear up that dictionary and talk the same language, it makes it much easier to comprehend what's going on in each other's systems and how that can then work together. I love that you have that. So what is the essence of Value-Based Purchasing?
Lisa: So to me it's quality service combined with efficient service that results in quality outcomes. So I think about that. Efficiency without quality that would not lead to quality outcomes. We'd hurry up and do things, but we wouldn't really see the quality outcomes we wanted to see. And at the same time, if you have a quality service that goes on and on and on, you lose the cost effectiveness and you typically you lose the job seeker. They're going to give up or go find a job some other way. So to me, we have to recognize we need both quality and efficiency in the way services are delivered and that we have a set of quality outcomes we want to achieve. And we have to ask ourselves, to what extent are we getting those quality outcomes? And to me, if we can figure out a payment structure that balances rewarding quality and efficiency and is really clear about what is quality and service delivery, what is efficiency and service delivery, and then what are we looking for? As quality indicators and outcomes? We can design a payment structure that really will deliver on that. And I think as you start to think about that, you realize how the existing payment structures really aren't set up to do those things for various reasons. And that really, I think, helps people buy into the idea that there might be a better way to do this. And this idea of value based purchasing might actually have some legs.
Carol: So that payment structure piece, that's my interest. How did you really dig in and kind of figure it out? Because it sounds good and I understand all the things you're saying about quality outcomes, but how when it comes down, like putting the rubber to the road, do you get at the nuts and bolts of figuring out the payment structure?
Lisa: So everybody always wants that. Next they say, so tell me what it is. And I always say it is what you need to develop locally in your system. You need buy in from those who are purchasing and those who are providing, and you've got to bring them to the table in a constructive way. So in a really collaborative way, sometimes we talk about it as co-creation and you dig into what do we agree is quality service, how do we differentiate quality service from service that we would say is not high quality. And then what do we agree is efficient service? How do we differentiate efficient service from service we would say is inefficient but very important to VR agencies, at least those I've spoken to. Are these quality outcomes, the career path outcomes, the jobs with benefits, the jobs with more hours and better pay? You know, some of these things, you're just not necessarily seeing a lot. You're getting outcomes that you can count as a 26 closure, but they aren't the kind of quality outcomes that, and you see some revolving door effect of certain people who and I know that's a big issue in some states or you see a lot of dropouts in the process. So in every state it's important to sit together and figure out what should we be doing better, what does better quality look like, and then what is quality and efficient service look like? That's how you get the buy in to establish a payment structure that where people want to implement it and intend for it to work. I can certainly share examples of how that co-creation works going on elsewhere and what the ultimate outcome was, but that is what happened there. And I really like the idea that and really believe that you've got to do a local co-creation process to get to something everybody's bought into and something that has a high probability of working. I would never say, oh, Value-Based Purchasing is this. It's only this. Or you just take this model from this other state and you plunk it down here. That won't work.
Carol: Yeah, I can see why you sing to Chip's heart there. Because he's all about systems work, you know, and that whole and everybody's systems in your state are so different. How you're set up, what your relationships are like between your providers and yourself and other entities and all of that. So I do like that you're speaking to that and you can't just pick up and replicate because you've got all your nuances that are happening in your state, and you need to understand those before you can get to the agreeable solution. That makes a lot of sense.
Chip: And it's not only that, and we're finding this to be true now that providers are not a monolith, that there's not a state where you can go, okay, every provider looks like every other provider. There are a lot of uniquenesses, a lot of variables that have to be taken into account to bring at least the majority of them on board. And that's we're finding that to be true as every state system is different, every provider network or non-network is different.
Carol: Absolutely. And even when you think about the states, kind of just the like the geographic challenges they have and the things that are going on, we've saw such an increase, especially after Covid with people moving and some of the states go like our cost of living in certain areas has gone up exponentially, like 300% or something. And so you've got everybody like, decided because they could work from anywhere. We're all moving to this town and then other areas become depleted, maybe from people, and there's less resources available and harder to get providers to serve an area even though you have customers there. I just feel like we have a lot of geographic and economic challenges across states, even tiny states. It's been super interesting. We've found that work as we've been just doing plain old rate setting with states, so let alone what you guys are digging into. So what are some of the biggest challenges in implementing this value based purchasing?
Lisa: I would say the time it takes to do it right. I think sometimes state agencies and I'm not singling out VR, but they want quick solutions. You know, they think about it for a long time and then they say, okay, we want to do it. Let's get it done. Can we get this done in three months or can we, you know, and you have to say probably not in a way that would be successful. And so it is something not to take lightly and to really commit to invest in. I think there's a lot of additional benefits to doing this, including provider relationships and the learning that goes on. Providers now understand what it's like to step in the shoes of a funder. Funders understand what it's like to step in the shoes of a provider. I always think that helps with everybody getting on the same page and agreeing to a model they think will work, but it takes patience, it takes partnership. Some states are, they're very uncomfortable with bringing providers in. They tend to develop things and then release them to providers. So you've got to have a level of trust when you identify the providers you want to involve. I always encourage to identify who are your high performers. They are the providers you want this model to work for because you want more high performers and you want those that you have to expand their footprint, for example, to go into geographic areas that are underserved or to hire more staff.
So always thinking about partnering with the high performing providers. But there's a bit of reluctance, you know, and risk in doing that and saying we're going to create something together. Lots of outside the box thinking. It's really hard to get away from payment models that you've been invested in for a long time. Milestone fee for service. Just to think beyond those can be very difficult, but I think once people start to and that's something I do, is kind of bring ideas and thoughts and stimulate thinking to get them to move away from those models and really say, what should we be paying for? What is important to value in the payment structure? I think it really gets to be very exciting, or at least I think so. You really need data to you cannot develop a model without good data. Sometimes the data is readily available. It's reports that VR agencies are already pulling out of their system. Other times the data's in the system, but they don't typically pull it. And so we have to work with them. And it helps to have a data analyst to assist with this process, to be able to pull pieces of data or data analysis and different ways that informs what we're doing. We want a data driven approach. And sometimes, of course, you probably know that data analysts are very, very busy or they're off doing something else. And it may be hard to get them committed to the work.
Carol: Have you seen improvements since? I'm just thinking since WIOA and kind of the requirements that RSA has put on state agencies about collecting a vast amount more of data. Have you seen improvement as you're working with states that they actually have data they may not have had years ago that you can get at. I mean, there might be a little bit of a problem with the staffing or getting your data analysts to pull it, but that availability of the data you need to really to dig into this, that it's actually there.
Lisa: Yeah, I do think the systems are pretty sophisticated, and it's a matter of helping them understand how to use more of the data they have, because we have the standard WIOA measures. We have the way that VR talked about its performance prior to WIOA but I think we're digging in to get it more data elements that help us understand. One of the most important things to understand is demographic information and how that affects maybe how difficult or how easy it is to serve someone. So, for example, adding criminal background to someone's demographic profile, or we know from history that, you know, that does create a challenge. So it's weeding out what are the things that differentiate people who VR would serve and try and understand better how that relates to cost. The other thing that's really important that I don't typically see is what's the average cost of a successful case? So I see this is the average cost of successful closures. So taking all successful closures and dividing it by the number and then average cost of unsuccessful closures, then average cost of a case. But for me what matters most is what are we paying for a successful case if we're including everything we're paying. So including all the that we're spending on unsuccessful closures in that and saying, basically this is what it costs to get a successful case, because we also have to pay for the unsuccessful closures and trying to focus on how do we reduce, how much we're paying for unsuccessful closures, and to really make sure more of the money that we're paying flows to successful closures.
There's a little bit of complacency that goes on with every system where if we just compare ourselves to other states, we may say, look, we're doing better. We should be happy with our performance. We are better than 75% of the states. But if we stand back and compare that to people without disabilities and their participation in the workforce, I think that's when we say we're comparing it to school. Like if you got 60% on a test, would you pass it or would you fail it? So I think we have to challenge ourselves to say we may be doing better than so many other states, but we are not performing at a high level and we want to move up. We want to not just judge ourselves by other states. Now, 100% success is unrealistic. I don't think there's anybody who would disagree with that, but it's important for the providers and the funder to come together and say what kind of improvement above where we've been. Do we want to try to incentivize? Do we want to see and to develop the payment structure, to say we believe this structure will directly influence our ability to move those percentages up over time and thus reduce the amount we're investing in unsuccessful closures without reducing the number of people were serving, without cherry picking, but truly improving outcomes.
Carol: I love that that is a good way to challenge the thinking that's going on out there, because people sort of, I don't know, poo poo or they just this is over there in that bucket and they let it be. And we're kind of complacent with just, you know, we're doing better but is better. What's the next state like. You know, like better than what. And so what does that matter.
Chip: But I think I mean, the key to me is the concepts of quality, the quality of services and quality outcomes. And if you can define and you can measure and you can demonstrate quality of services and quality outcomes, it seems like you don't need to compare yourself with other states. You can say this is quality in our state. This is what we're doing. This is how we're doing it. These are the outcomes. So state by state national comparisons are way less important. So when we can get to that point where we can identify and measure and demonstrate and get quality outcomes that will move this whole system gigantic step forward.
Carol: 100% Chip. So what would be your best advice for states as they're listening. Right. You know, they're listening in and they're thinking, well, I want to do something, but I don't know what to do. Like what would be the next steps? What should they do?
Lisa: To me, it's, start the conversation. I find that the process of bringing state people together with providers, that they're all learning together about this different way of thinking, And it helps because it does take a little bit to get your mind around what Value-Based Purchasing is and how it's different from milestone payments or fee for service. And I've often seen like people have come up to me sometimes and said, you know, it was the third time I heard you talk that the bells finally went on, you know? And I said, that's fine. I think it's just the way it is. It's complicated in a way, because it's so different. So getting the conversation started and thinking about, you know, asking yourself questions like, is there quality in the outcomes that we want as an agency that we're not getting quality and service delivery? We don't feel we're getting quality and outcomes we're not getting. Then think about your payment structure and say, is there anything about our payment structure that incentivizes or rewards this kind of quality that we're saying we're not getting? Sometimes maybe there's something there. Sometimes you could say, no, there's absolutely nothing in the payment structure that does that. And then I always say, think about the providers that you think are doing the best work for you. Are they financially benefiting? Are they doing better financially. And in some cases I've seen no, there's no difference. I'm performing better, but financially that's not being recognized. And in other cases I've seen they're actually earning less because they're doing such a good job and they're very efficient. You know, they're producing quality with efficiency. They're actually doing more poorly financially than some of the providers who are performing at a lower level of quality. So I think when we start to think about those questions, people see that the need to try to figure out a different way to do things, then they're willing to, you know, let's talk about what this Value-Based Purchasing is what the principles are, how it's different, and begin to think about how we might bring our high performing providers into a conversation with us about this.
Chip: My advice for states is that you're in this for the long haul. To Lisa's point very early in this discussion that this isn't a quick solution. That's something that can just be laid in the state and just immediately adapted. It does take that level of discussion, that level of understanding, collecting data. It's complex. And sometimes I think to myself, why am I choosing to get involved in the complexity of Value-Based Purchasing overlaid the complexity sometimes of customized employment, but I think in the end result we will have a much better system, much more equitable service delivery system for everyone, including providers, including customers and job seekers. But just keeping the discussion going on things like this, things that CSAVR presentations Getting this into the national discussion, I think, is the first step.
Carol: Those are really good tips. Where outside of VR is Value-Based Purchasing being implemented?
Lisa: So definitely in the Medicaid world, most of your listeners are probably aware of that, but mostly in the Medicaid world, it's on the acute primary care side. So hospitals and doctors, primary care physicians and things. So I always caution people there's things we can learn from that and those examples. But it's not a wholesale import those approaches over to VR. I don't think that would work. But there are some principles or strategies that we can use, like there's a concept called shared savings. There's some other things that I think we can think about and use, but we still have to develop something that's specific to employment. In my work on this around employment on the Medicaid side has been with the long term services and support agencies, the DD agencies, the mental health agencies, managed care organizations who are doing LTSS and employment is a perfect place to start with them around their thinking, around Value-Based Purchasing. They're facing some pressure. I would say some to use Value-Based Purchasing because it's seen to be working on the acute primary side of Medicaid. So they're saying, why aren't we using it in LTSS? And they want better quality and better efficiency too. They want to see people supported to achieve their highest level of independence. They want their high performing providers to do well.
So we worked on it with employment because it's so obvious that fee for service, which is the typical payment model, disincentivizes all the things that we associate with high quality supported employment, the better you are at getting people jobs, the better you are at coaching and fading because you're good at it. We reward providers under fee for service with less money. And those providers are performing more poorly, end up with more money. So it's not hard to get people to see why fee for service doesn't work for supported employment. So we've worked on models for job coaching that pay for hours worked rather than hours of coaching, so that providers are appropriately financially compensated if they do better at fading, which goes back to what kind of job did they get people, as well as how good they are at coaching. That model incentivizes them to get people more hours. So if you start with 12 hours a week, that doesn't mean you stay with it. If they're doing well, the employer wants to increase that. The person wants that they can get paid more in the model. Fee for service providers don't get any financial remuneration for increasing people's hours worked, even though we say that's a goal.
So that's been a lot of where we see some of the value based models developing. We're paying for things up front services like exploration, which I'm really happy to see the results of states that have added exploration and exploration to their waivers, because we now have a way to tackle people who say no thanks in a planning meeting or I'm not interested, or their families say that we've been paying for developing payment models for that. That's an outcome payment. So they complete the service, then they get paid based on the quality of the information they submit and the efficiency. So there are ways to align what we're doing. Providers certainly appreciate that they would like to be paid the same way. Typically once they experience being paid in a Value-Based structure. So that's where it's happening. But think about just the general business world. There are so many examples of payment based on performance or quality, right. Sales Salespeople earn incentives for sales. So business has long been doing this in terms of creating those kinds of incentives and even nonprofits. Now, United Way and others are funding nonprofits based on outcomes and deliverables. They're no longer funding them to just provide service. So I think if you look, we're seeing it everywhere, really.
Carol: So you brought up a whole lot of points. If people are interested in more information, do you have resources we could send them to?
Lisa: Well, in 2021, I did a publication that looked at examples from around the country that I'd been in some way involved in. That's on the Lead Center website as well as there are a series of webinars we did at the time with representatives from various states. I have a lot of information about what's going on in the Medicaid side. Et etcetera. So I guess I would say that was my thinking in 2021, I continue to learn and evolve my thinking, and I think we're at a point now where we're trying to do in Virginia, is move beyond both fee for service and milestones, because neither are working very well, right? So you've got some state VR agency saying we're paying fee for service. It's not working. Should we move to milestone? But if you talk to states who are using milestone, they will also say it's not working very well. Some of them are thinking about going back to fee for service. And I'm thinking, I don't think we should do either. I think we should work together to figure out what's the next way we attempt this that addresses the shortcomings of both. And I think that pathway is Value-Based Purchasing.
Chip: and helping moving states to. Well, I'm a little concerned about the unknown. What we have may not be working now, but it's the known. I don't really know what's ahead, but I think where in Virginia at least, has done a really good job of creating that safe space. Like, let's explore this together and keep this comfort zone of what we currently have, but move forward into something that's more equitable and beneficial for them.
Carol: So, Chip, if people wanted to reach out, what would be the best thing? Should they contact you or what would be best?
Chip: Either one of us is if it's a state agency, probably me if it's others listening to this. Lisa.
Carol: Do you want to give them your email address?
Chip: It's r k e n n e y at SDSU (San Diego State University) dot EDU.
Carol: Awesome. And, Lisa, do you mind sharing your email address?
Lisa: No, but I'll warn you, it's long. So here we go, Lisa Mills l
L i s a M i l l s, all one word, at M as in Michael, T as in Tom, D as in David, D as in David, dot On Microsoft, all one word, com. And that was my IT friends who gave me that ridiculously long email, which I hate.
Carol: Holy smokes, that is long. Well thank you both. I really appreciate it. And I will put a link in our podcast announcement out to your publication from 2021 as well. Then folks could at least see that. But thanks for your time. I really appreciate the conversation.
Lisa: Thank you.
Chip: Thanks. We really appreciate this opportunity.
Outro Voice: Conversations powered by VR, one manager at a time, one minute at a time, brought to you by the VR TAC for Quality Management. Catch all of our podcast episodes by subscribing on Apple Podcasts, Google Podcasts or wherever you listen to podcasts. Thanks for listening!