Health plans and providers recognize that the train of value-based care (VBC) is chugging down the track with sustained momentum. According to one large health system’s VBC contracting vice president, “Value-based payment models are becoming a larger part of our care; get on board or be left behind.” Despite the consensus that high-quality, cost-effective healthcare is in everyone’s best interest, small and midsize provider organizations are hesitant to get involved. They lack trust and clarity around the metrics used to measure performance, don’t have visibility into how other provider organizations’ VBC payment models are faring and have less leeway to engage in programs with downside risk.
To delve deeper into these challenges, ZS launched a research study examining the provider experience in VBC contracting. In-depth qualitative interviews were conducted with VPs of VBC contracting, chief administrative officers, chief operating officers and chief medical officers across a variety of healthcare organizations, ranging from independent clinics serving 800 lives to clinically integrated networks serving over 300,000 lives.
One common theme that surfaced across interviews, particularly from small and midsize provider organizations, was the need for support from health plans in the execution of VBC programming. Successful VBC implementation requires substantial infrastructure, including but not limited to:
- Knowledge and processes for contract negotiation
- Oversight of financials and cash flow structures that can accommodate downside risk
- Personnel to manage administrative tasks
- Technology for tracking and reporting performance metrics
Increased adoption is clearly in the best interest of payers, providers and patients. There are four key areas health plans can focus on to support providers in implementing VBC programs:
- Technology and infrastructure support
- Data and analytical support
- Easing the administrative burden
- Care coordination and patient engagement
Health plans can provide financial support for the IT infrastructure and technological capabilities development necessary for executing VBC programs. Small and midsize providers often lack these capabilities and are pressed for funds to pay for the software and personnel needed for successful execution of VBC programs. The technological support required can include data management, technical assistance, care management tools, payment and billing software and recruiting and training the personnel needed to develop and manage this infrastructure. As an example, the chief operating officer of an independently owned multispecialty practice told us that he didn’t have a billing or claims adjudication system equipped to handle alternative payment models, such as bundled payments, and was thus required to input inaccurate data to track payments.
Health plans are in a unique position to broker relationships between providers and the companies that offer technology to track patient outcomes and prevent expensive medical events. Both hardware (e.g., blood glucose monitors that send readings to provider) and software (e.g., smartphone apps that allow patients to report post-surgical pain) can be used as extenders to triage symptoms appropriately and reserve human resources. While this type of technology is becoming commonplace in large health systems, small to midsize providers often have difficulty affording the devices, software and IT setup required to integrate them into their practice. Health plans that leverage their network to help build relationships between providers and tech companies will be invaluable in the effort to reduce the high human touch demands that continue to limit providers’ successful VBC adoption.
Health plans can garner trust from providers by offering more transparency around data and related insights. Most small and midsize providers lack trust in VBC programs, as they believe that health plans prioritize their profit above partnership and quality of care. When asked how health plans could build trust, healthcare organization C-suites often point to data transparency, noting that they would like to know how other similar providers are performing in VBC programs. Health plans collect a tremendous amount of data and generate rich insights that could be shared with providers to improve their programs and build trust.
Health plans could either reimburse providers for administrative costs or lend an administrative hand to support process flow changes for the everyday clinical and administrative duties that come with VBC programing. For example, providers may be required to ask patients additional questions or track additional outcomes to comply with a VBC contract. Depending on patient volume, this may require additional office staff and technology for data reporting and storage. Small and midsize providers are already pressed for resources and cannot handle the additional administrative burden. One solo practitioner cardiologist reported that he had to decline several VBC contracts because he didn’t have the personnel resources to perform VBC data tracking duties. Without the proper financial and personnel support to manage administrative tasks required for VBC success, programs are likely to place a heavy burden on providers that isn’t sustainable.
Providers are looking to health plans for support in managing utilization of services across specialists, as reducing repetitive care and keeping patients in-network are key to episode-of-care and capitation payment models. Although there have been increased efforts in the last decade to connect medical silos, funding for integration is still limited. A chief administrative officer of an independent, multiclinic orthopedics practice reported that his organization has been successful in VBC because the clinic partners invested in a case management team of administrators, nurses and physical therapists to help avoid ER visits and unnecessary testing. Without vigilant coordination, patients seek services out of network and are more likely to receive unnecessary and expensive care, resulting in reduced VBC success and less favorable patient outcomes.
Patients are often unfamiliar with the rationale behind decisions about their care, and there’s value in health plans stepping in to support providers when changes are made to treatment protocols in order to align with VBC. For example, a patient may question why they should have their surgery in an ambulatory surgical center instead of a hospital or be discharged home instead of to a skilled nursing facility. Health plans are in a position to help patients understand VBC models and reinforce the messaging around quality and cost of care. Consistent messaging to patients from payers and providers would help them feel like a more unified team working toward a single goal. Collaboration and trust with patients emerged as important factors in the facilitation of a successful VBC partnership.
As VBC continues to gain steam and chugs further down the track, small and midsize providers will need support from health plans to get on board. Also, there’s variability in type and level of support needed within the small and midsize provider category. Health plans should do a better job understanding provider pain points, assessing the help they need, tailoring supports accordingly and communicating the support available to provider organizations in order to improve VBC adoption and outcomes. With better plan and provider collaboration, the train is much more likely to reach its healthier and financially viable destination.