As the ecosystem of healthcare delivery continues to evolve, the role of health plans is shifting. It’s a critical time for health plans to secure their position in value-based care (VBC) innovation and execution. Despite its challenges, VBC will remain a key lever for health plans to effectively manage medical costs, maintain strong provider relationships and differentiate themselves in the market.
To achieve these goals, health plans must increase VBC adoption, including expanding their footprint beyond traditional primary care-oriented models and increasing the share of providers who assume both upside and downside risk. While targeting and engaging specialists is especially complex, tackling the large portion of spending driven by specialists is critical to realizing the full promise of VBC.
Leading health plans use provider intelligence—or a set of actionable insights and analytics to understand the providers in their markets—as a key ingredient to advance their value-based objectives. Health plans in particular can benefit from provider intelligence when building relationships with their specialist groups, which generally are less experienced at managing risk and could benefit from customized contracts and engagement tactics. Yet the intelligence required to build trusting and impactful provider relationships falls short at many plans.
There’s a significant opportunity to optimize provider targeting that, in addition to directly informing provider prioritization and outreach strategy, also enables a sophisticated engagement and portfolio strategy. While health plans may have a strong pulse on the large health systems and facilities in their markets, identifying which physician groups to engage in VBC contracting often receives less attention and resources. But this can be a critical component of successful VBC arrangements.
Many health plans are not taking advantage of provider targeting because they are currently:
- Using a narrow set of internal metrics and missing insight on ideal provider partners: Many plans struggle to obtain the comprehensive insights needed to understand their optimal VBC targets. Data sources are fragmented across operational silos, and the data that is available to plans is typically limited to specific payers, providing an incomplete view of provider performance. Even the most sophisticated plans often rely on simple cost rankings and tribal knowledge to evaluate provider partners. Other plans take an even simpler route and use an “any willing provider approach,” overlooking key performance indicators in favor of targeting already-engaged providers.
- Gathering data from multiple data sources, which is resource- and time-intensive: Even if health plans have access to robust and sophisticated data, collecting available data is a laborious process that requires significant administrative investment. The most successful plans understand that provider contracting is a continuous process: They must be ready to develop new partnerships and modify existing models at any time. Having the right data in hand to make these decisions is a strain on resources, forcing many plans to resort to a simplified strategy that doesn’t tell the full story.
To illustrate how advanced provider intelligence can shift a health plan’s view of the best VBC partners, ZS analyzed extensive provider performance data to supplement cost information with additional measures such as quality and practice patterns.
When we compare the ranking of groups using a comprehensive measure set versus a simple ranking by total charges, we see how cost measurement alone falls short and ignores other important factors that could influence VBC success.
We see a significant spread in performance across groups in a similar cost band. Groups with lower costs but strong performance on other metrics may be overlooked, while the largest players in a plan’s network by cost ranking may not actually be the most compelling VBC partners. By using a holistic set of insights, organizations are better able to target the provider groups that are best aligned with value-based approaches.
A provider intelligence strategy that synthesizes data across sources and captures a multifaceted snapshot of providers will help health plans target the right provider groups and align them with the best type of VBC arrangements. This approach will enable a high-impact VBC portfolio and help health plans:
- Improve overall medical trend
- Reduce total costs
- Decrease administrative costs
- Improve quality
- Enhance provider satisfaction
Health plans should take a proactive approach to determine where they want to grow their VBC contracts—whether it be primary care, specialists or multispecialty groups—and plan for an intelligent, analytics-driven approach for understanding these groups and optimizing the benefits of VBC. Focusing on internal data alone does not provide the full picture needed to inform the types of advanced partnership opportunities we believe are ultimately required for health plans to keep moving the needle on value creation.