Strategies for Success with the Accelerated Evolution of Value-based Care
The idea of value-based care was born with the passing of the Affordable Care Act (ACA), which offered incentives built around the idea. The first of these incentives was the Accountable Care Organization (ACO). ACOs popped up all over the country, and very few were financially successful in the first years, largely due to the lack of accountability with the ACO shared savings program. If an ACO reduced healthcare spend, it received a portion of those savings. If it didn’t, there were no repercussions. Thus, with such stakes, there was no real buy-in.
Many Medicare Advantage Plans began to introduce this effort to their network providers and soon, those providers could reduce spend while increasing the health status of their patients and securing their portion of those savings.
Fast forward to today, it has been these types of contractual arrangements that helped many healthcare providers survive the struggles of 2020. Due to these differing streams of revenue, consistent bonus payments, and the ability to be agile, providers along the value-based care continuum could sustain themselves even though there was a significant drop in patient visits throughout 2020. The healthcare climate of 2020 exposed the shortcomings of traditional fee-for-service arrangements and raised the need for healthcare providers to pivot their strategies toward a more adaptable, sustainable, and, often, more financially lucrative strategy.
This blog, and additional blogs to follow, will highlight the value-based care strategies that have been proven as “best practices.” I will review the necessary questions healthcare providers should ask themselves as they enter and excel in the value-based care space. Providers have found themselves challenged to deliver care across differing channels: in-person, virtual or in-home. Having made these strides, healthcare providers are primed to transition to more value-based strategies and capitalize on what those arrangements have to offer. As you consider value-based care, ask yourself the following questions, which will ultimately align with best-practices moving forward: “What is my population?” “Do my contractual arrangements benefit my patients and my business, or do they only benefit the payer?” “Who are the most like-minded partners that I could chose to help me deliver the best care for the lowest cost?”
Identify: “What is my population?”
This first question is probably the most crucial to answer in the quest to unlock value-based contracting potential. You know your patients individually, but do you understand them as a whole? Being knowledgeable about patient populations gives you a powerful position when negotiating new contracts. Payers understand where their money is going in terms of claims, and, if practice administrators can also understand this, they are more likely to “win” the contracting game. For example, most practices know who their diabetic patients are, and they have robust processes and clinical workflows in place to help manage the disease state. But if you analyze the population a bit further, you can identify pre-diabetic patients and begin taking measures to prevent a full diabetic diagnosis. Successfully doing this can provide negotiating leverage with the payer(s).
Let’s further explore this example.
With your patient analytics, you are now prepared to walk into a negotiation meeting knowing exactly how your pre-diabetic program has improved the payer’s bottom line. By understanding your population, you are now able to articulate how you improved your patients’ overall health and how this translates to financial savings for the payer. As a result, you’re asking for a share of those savings or an incentive designed around a pre-diabetic program. Gone are the days where payers hold all the power, and healthcare providers sign whatever contract they receive. When you know your population, not only do you have the keys to the car, but you decide where you’re driving and the path you will take. We’ve focused our example on diabetes, but that’s the beauty of knowing your population—you can focus on the disease states that are important to your practice and most impactful to your population. Knowledge is power in navigating the value-based care world.
Crucial conversations like the one described above help you determine which payers treat you like partners and which payers don’t. If you understand your patient population and your payer population, you can decide how you’re treated in the negotiation room, and ultimately, how you’re compensated for the work you’re putting into keeping our populations well. I’ll continue to cover this topic in my next blog, as I discuss the answer to the question, “Do my contractual arrangements benefit my patients and my business, or do they only benefit the payer?”
In the meantime, check out what Allscripts is doing to help organizations like yours make a seamless and profitable transition to value-based care delivery.