I recently went on a father-son trip to Florida. My dad isn’t much of a traveler, so I had to lure him out of the house by pairing the trip with something of interest to him: a car show. He has always been quite the classic car enthusiast. My early childhood days often consisted of sitting with him in the garage and helping him restore cars.


This car show was enormous. As my father walked around, he was particularly struck by a white 1962 Corvette that, to me, did not look all that great. “Peter, look! It’s a survivor car!” he exclaimed. Because I was clueless to that term, my dad went on: “This is a car with an original paint job, interior and power train. It has survived the years without a restoration.” According to my dad, the “survivor” label has immense value for classic car dealers and collectors.


As he inspected each crevice of the vehicle, however, my dad noticed a few things that made him question its survivor status. He was skeptical that it could have only 9,000 original miles, and that no other work was done. To test this, he knelt, got on his back, and then crept under the car to inspect the undercarriage. He abruptly shouted, “I knew it! This is not a survivor car. This has had work done!”


Later that day, my dad spoke with others at the show about his revelation. People remarked that the “survivor car” definition has been diluted over time. “What constitutes a survivor car varies greatly depending on who you ask these days,” a fellow enthusiast remarked. “There really is not an agreed-upon definition.”


This talk about blurred definitions and a lack of consensus on this term reminded me of similar discussions we’ve had with leaders of health plans and provider organizations: What constitutes value-based care? And moreover, are insurers using value-based care more for marketing and PR purposes than to drive real change?


This has long been a hotly debated and publicized topic, especially as payments made to providers tied to models outside of pure fee-for-service has eclipsed 30% of total U.S. healthcare spend in recent years.  Value-based care often is discussed in monolithic terms, yet stakeholders each have their own preferences and beliefs about what value means to them.


Like the survivor classification for cars, there will likely never be an industry standard way to define value-based care or reimbursement (other than that it is not fee-for-service). I also don’t think that a definition is needed. Health plans have followed CMS’s lead when it comes to steering away from fee-for-service. Both national and regional plans have been quite public with their program announcements as they look to lower total costs of care and drive improvements to industry standard quality metrics such as HEDIS and STARS. Communicating success in value-based adoption also projects health plans as proactive change agents—and, in many cases, the results are impressive. But so far, it’s not entirely clear that the efforts at large have made a meaningful dent in the cost curve.


Nevertheless, value-based care and alternative reimbursement are now firmly entrenched in U.S. healthcare. As these models continue to gain momentum through improved interoperability and reduced regulatory barriers, now is the time for health plans to take a look under the hood and assess the effectiveness of their value-based programs.


We believe such an assessment includes six foundational pillars:

  1. Program strategy and vision: How are you defining value-based care across the organization, including a full care continuum? What are the metrics and endpoints that tie to that definition?
  2. Organizational design: Are the right pieces in place to carry out the steps required to design, deploy, operate and assess value-based care programs?
  3. Provider intelligence: Does the health plan have a 360-degree view of the provider to best match program type with willingness and technology?
  4. Program design: Is the pay-for-performance relationship easy to understand and motivating to drive behavior change?
  5. Enablers: Will providers receive the requisite information, tools and clinical support that meets them where they are and helps them succeed?
  6. Measurement: What’s the impact and benefit created for all stakeholders on an ongoing basis? Ultimately, how are these arrangements improving quality of care and patient outcomes?  

In my upcoming blog posts, I’ll be diving into these pillars to detail how health plans can optimize their value-based efforts. Ultimately, a plan’s success in each pillar will determine whether they survive—and thrive—as payments tied to value become the dominant form of reimbursement in U.S. healthcare.