Over the past 10 years, the healthcare industry’s transition from volume to value has been slower than expected, and reported outcomes have been mixed. One frequently cited challenge is the wide range of health plan contracts within a single provider practice and providers’ commitment to treat all patients to the highest standard of care, regardless of any financial incentives.
Recent findings from our work with health plan clients showed strong evidence that value-based care (VBC), or risk-based, contracts can lead to different patient outcomes. These findings raise a critical question: Beyond the contract itself, what additional elements are needed to ensure VBC contracts actually shift provider behavior? In this piece, we’ll discuss the operational mechanisms health plan leaders in provider engagement, clinical programs and VBC innovation can implement along with contracts to shift patient outcomes.
“Beyond the contract itself, what additional elements are needed to ensure VBC contracts actually shift provider behavior?”
The impact of VBC status on medication adherence
Our approach leveraged third-party claims data not tied to any one payer to analyze drivers of our clients’ performance relative to competitors for pharmacy medication adherence measures in the Centers for Medicare & Medicaid Services’ (CMS) Star Ratings program. We used advanced analytical models, including machine learning, to define various medication adherence patient journeys and the factors that drive or hinder adherence for each cohort.
To dig into the role of VBC contracting at one client, we segmented providers who were participating in a VBC contract with our client versus all others. When we compared medication adherence rates between these provider segments, VBC providers achieved significantly higher adherence rates. (Adherence rates were defined as the percentage of patients whose proportion of days covered exceeded 80% in scope medications as defined by CMS medication adherence measures. Our analysis included diabetes, hypertension and cholesterol medication adherence measures. We found consistent results across these three measures.)
FIGURE 1: Medication adherence by provider contract type for a leading national health plan
Next, we conducted a deeper analysis of VBC providers to compare results across their individual patient panels, which included both patients covered by our client’s VBC contract and other payers and contract types. Most VBC providers saw higher adherence among patients covered by our client’s VBC contract versus all other patients in each provider’s panel. In other words, patients who were covered by a VBC contract showed stronger adherence outcomes than other patients, even when they were treated by the same provider. This analysis showed statistically significant evidence of positive adherence outcomes linked to VBC contract participation.
FIGURE 2: VBC providers have higher adherence for patients covered by VBC contracts
The contract alone didn’t drive these results. Enabling mechanisms such as data, operational model and individual incentive compensation are needed to deliver the last mile and shift practice patterns.
- Enablers to support providers with data- and technology-driven insights and solutions
Health plans can support providers in VBC delivery by equipping them with the tools, data and resources they need. Data-driven insights into patients’ medical and social histories offer a complete patient profile and reveal unmet care needs.
By investing in technology-enabled solutions that use real-time data, automate workflows and streamline care team collaboration, health plans can empower providers to deliver optimal impact. In the example above, the health plans’ market-leading interoperability solutions play a key role in proactively flagging its patients at risk of nonadherence and sending this list to providers for additional outreach.
- Ensure operating support for VBC objectives
In designing an effective VBC model, health plans should consider what operational support providers require. Elevating the roles of nonprovider care team members such as case managers, patient liaisons and call center agents is key to create capacity and focus. These associates play a critical role in connecting patients with the care and resources they need. Health plans can inventory their current VBC operating models and consider how they can help provider practices put in place the necessary capabilities, processes and personnel.
- Align individual provider incentives with shared goals
Aligning individual provider compensation with practice-level VBC contracts and objectives also can help obtain provider buy-in and drive behavioral changes. Despite the recent growth of VBC arrangements, the majority of individual provider compensation plans still put marginal emphasis on quality and VBC outcomes.
This approach is key for physicians, as well as for front-line, non-clinical and clinical staff. Provider practices should review incentive models to ensure practice-level performance goals flow down and align with individual incentives.
Looking ahead
Our analysis provides encouraging evidence that VBC arrangements can drive differential outcomes. Looking ahead, we see growing momentum on the move to value—including CMS’s recent commitment to ensure the majority of beneficiaries are under accountable care by 2030. Health plans and providers will need to continue to innovate and partner on a range of capabilities to successfully shift from volume to value—including data- and technology-driven insights, operating model and individual incentive opportunities.
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