Industry Voices—What does the value equation look like in the new decade?

As healthcare leaders look to the year ahead, many predict that this will be the year the training wheels come off value-based care. This is not a new priority, but the move from value-based theory to practice remains one of the industry’s top challenges.

Healthcare costs are expected to rise by 6% in 2020, largely driven by increased prices, not utilization. Even as more states mandate value-based care for Medicaid and Medicare expands bundled payment options, making meaningful progress toward improved quality at reduced cost has taken longer than expected.

The problem is that the reward for success under value-based models is too far separated from the action. Physicians and healthcare organizations aren’t seeing real-time reinforcement for positive behavior. So often, providers are given 12 months to manage the health of a population, only to wait six months longer to be compensated for gains around cost and quality. Without timely feedback and incentives, maintaining momentum for value-based behaviors becomes difficult. It’s also challenging to determine which actions make the biggest difference.

In 2020, adapting to increasing government scrutiny on quality and cost and developing core competencies in value-based care will necessitate higher degrees of payer-provider collaboration.

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Specifically, it will require sharing financial and clinical data—claims, risk, and quality data—to build stronger connections between the care process and the economics that pay for and reward high-value care. Interoperability and comprehensive, longitudinal patient records that include all of these data elements provide the foundation for taking care to the next level.

Health plan executives should undertake three critical actions to strengthen performance on value and thrive in this value-based evolution:

Break down financial barriers to care for patients with complex health conditions 

Delivering on the promise of value-based care requires payers and providers to partner more closely around value and share more of the risk related to caring for medically complex populations. For health plans, this includes investing in digital technologies that support remote access to specialists as well as data analytics tools that promote real-time actionable insight.

For example, by leveraging tools that alert clinicians to members who may be at risk for re-admission, clinicians can engage with these patients around their health needs and evaluate risk levels more frequently. These tools also play a key role in enhancing interoperability and streamlining value-based reimbursement, reducing the lengthy 18-month period doctors typically wait to receive payments.

At CareMore Health, partnering with primary care providers to offer remote access to behavioral health specialists ensures primary care physicians have access to behavioral health expertise as they manage Medicaid patients with high-risk conditions such as heart failure or diabetes. The impact: behavioral health-related admissions decreased from 40 percent in 2016 to 13 percent in 2017 and 2018 among members in Tennessee.

Rewrite financial contracts to drive value 

Typically, value-based incentives are too small to drive sustainable improvement—and this poses a significant barrier to innovation. To move the needle on value, health plans must become much more nimble in testing the level of financial incentive necessary to spur improvements in quality of care and cost. This, too, requires access to real-time data so that financial incentives may be adjusted when existing incentives are not large enough to promote meaningful change.

For example, in Massachusetts, a Blue Cross Blue Shield Alternative Quality Contract provides significant financial incentives for physicians who deliver high-quality care at decreased costs. As part of this initiative, the health plan also provides data physicians can act upon to improve care, with data analytics reports shared weekly, monthly, and yearly that pinpoint:

  • How well physicians are performing on quality measures
  • How satisfied patients are with their care
  • The greatest opportunities for improvement, from reduced emergency department use to improved medication adherence

The impact: substantially lower increases in medical spending year over year for chronic disease patients and more effective management of diabetes and high blood pressure.

Partner with providers around risk transfer 

Payers cannot expect providers to simply accept financial risk under value-based contracts and achieve the desired results. They must also partner with providers in this transfer of risk by continually monitoring the results and working with providers to adjust their approach based on data. By reviewing the numbers around quality and cost together frequently, as in the Blue Cross example above, rather than six months after the performance year has ended, payers and providers can jointly determine the right steps for value.

For example, Humana shares predictive modeling data with providers who treat Medicare Advantage members and suggests ways to close gaps in care among patients who are noncompliant with preventive screenings.

The health plan also captures the social determinants of health data for members and partners with providers in developing strategies that ensure access to appropriate care and reduce inpatient and ED admissions. The initiative reduced costs by $3.5 billion compared with traditional Medicare, for a savings of 20.1 percent. Members also achieved higher rates of preventive screenings as well as increased medication adherence.

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As the industry braces for increased government management of healthcare in the coming years, the most forward-thinking organizations know that thriving means they must exceed, not just meet, the government-mandated bar for cost and quality.

The healthcare value equation for the next decade must include intense focus on payment appropriateness, thorough assessment of population risk, and measuring quality outcomes across longitudinal patient records. This will result in stronger, more collaborative partnerships between payers and providers—fueled by shared data and supported by digital technologies for care access and management—all key to achieving the true promise of value-based care. By seeking opportunities to shape value-based decision making and performance in real time, health plans can make a deeper impact on members’ health while driving sustainable improvements in quality and cost.

Emad Rizk, M.D., is chairman, president and CEO of Cotiviti and the author of "The New Era of Healthcare: Practical Strategies for Providers and Payers."