Health Plans

How providers experience value-based reimbursement, and what it means for health plans

By Peter Manoogian, and Shruti Rangnekar

June 4, 2019 | Article | 5-minute read

How providers experience value-based reimbursement, and what it means for health plans

In a prior post, I explained how health plans must redirect their efforts to optimize and transform their existing provider value-based reimbursement (VBR) programs. As the decade of the “value-based space race” comes to a close, many health plans have successfully planted their flag and have taken giant steps toward shifting payment models away from purely fee-for-service.

However, more can be done to achieve health plan provider collaboration that prompts behavior change in service of the quadruple aim in U.S. healthcare (improving the health of populations, enhancing the experience of care for individuals and reducing the per capita cost of healthcare – adding provider experience as the fourth objective). A growing body of research points to the unintended consequences of administrative burden levied on providers, often leading to burnout and shortages in some areas.


This begs the question: How are providers who are communicating with patients on a daily basis experiencing value-based reimbursement, and how does it impact their practice?


To find out, we conducted phone interviews with practitioners and executives with oversight of thousands of primary care physicians across the U.S. Our aim: to learn about the awareness, perception and day-to-day experiences with dozens of alternative payment schemes from private health plans.


The conversations were lively and revelatory – and pointed to categories in which health plans can make significant improvements to deepen trust, foster collaboration and ultimately generate true value for providers and patients alike. The three pillars where health plans can improve to gain provider trust and engagement are:

  1. Understanding: Considering a program design from the lens of the provider and the setting and organization in which they operate
  2. Designing: Improving transparency and clarity in program criteria (metrics, objectives) and considering opportunities to integrate provider feedback in the design
  3. Enabling: Meeting providers where they are by personalizing information and other support mechanisms to right-size enablement with demand

Pillar one: The path to provider trust must begin with deep understanding


Overwhelmingly, both providers and medical directors told us that either you take the contract, or you leave it, indicating that health plans may be missing the mark in designing and delivering VBR programs that providers truly embrace. This approach limits buy-in and motivation because providers are either unable to meet the goals or do not find them meaningful in relationship to their overall goals as a practice.


Within this pillar, our conversations pointed to three key areas where health plans can boost their understanding of the providers they seek to engage:


1. Knowledge and perceptions of value-based care


To meet providers where they currently stand and provide the relevant education or information necessary to drive toward a common goal, health plans should first understand provider knowledge, perceptions and aspirations with respect to VBR.


We asked primary care providers (PCPs) to define five common value-based reimbursement payment models. Most recognized pay-for-performance, but there was limited awareness of other models. Those with more than one value-based reimbursement contract knew the metrics they are evaluated on but could not associate those metrics with their corresponding plans. Overall, providers in accountable care organizations (ACOs) had a better awareness and understanding of these models.


Provider opinions on value-based care vary widely based on their knowledge and experience. For example, one PCP stated that value-based medicine is a “made-up English term” and another said, “I give all my patients the best treatment. I assume they’re all part of one of these programs and makes for better care and better medicine for all.” To reach common ground, health plans must first understand not only how providers currently feel about value-based care, but also why they feel that way and address these critical knowledge and perception gaps.


2. Practice dynamics and resources


To provide the relevant support and resources, a health plan first needs to know how the practice runs, what its pain points and capabilities are and what resources it currently has available.


Providers and practice leaders almost unanimously stated that they consider it impossible to succeed in VBR contracts without additional support and resources. However, the specific elements that PCPs stated were relevant to their practice varied widely. For example:

  • Some PCPs said their practices lack the additional clinical support staff necessary to meet adherence measures.

  • Practice leaders said that their technology is inadequate, and they lack the administrative capacity to support the data demands.

  • Unaffiliated providers feel particularly burdened, because their electronic medical records are not linked to other clinics, which means they miss out on notifications and patient data that affiliated providers have access to. They also lack the built-in referral network that affiliated providers have.

Health plans need to go beyond basic practice descriptors to truly uncover the specific needs of these different practices, and then use that understanding to influence program design and support functions.


3. Patient complexity


To design a program with metrics and goals that relevant and meaningful to the provider, a health plan must understand the complexity and details of the patients that a provider sees.


It is imperative that a health plan consider a provider’s patients when determining reasonable metrics. For example, some PCPs said that the diet and culture of a local geography matters immensely and often is a roadblock in influencing patient behaviors. To foster buy-in, health plans must determine which metrics are relevant for the patient population and set achievable goals.


Looking ahead


The bottom line is that providers care about their patients and want meaningful programs that can improve patient experience and outcomes. Health plans need to remember that the provider is a customer just as much as the person delivering care. Their knowledge, opinions, available resources and patient mix must all be considered to design and deliver programs that make sense.


Stay tuned for our next piece in this series that will discuss provider’s perspectives on program design in greater detail.

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