Value-based care (VBC) is finally gaining steam among healthcare organizations as executives look to implement processes that boost patient outcomes and rein in elevated levels of spending. To that end, more than 90% of health system executives say they expect VBC contracts will continue to grow in the coming years.
Despite the widespread popularity of the concept of VBC, making it work is something of an “all-hands-on-deck” approach. VBC relies on the collaboration between many stakeholders across the industry, which presents a complicated challenge.
There are three key components to a successful VBC network:
1. A robust infrastructure that supports the complex hierarchies of the healthcare ecosystem, that supports complex healthcare data needs, and can be shared and accessed by numerous participants
2. The ability to support numerous and evolving payment methodologies related to VBC
3. The inclusion of nonmedical and community-based organizations (CBOs) to address the social determinants of health (SDOH) that can lead to costly emergency room visits and hospital admissions
A strong VBC network will often need a sizable technology investment to revise traditionally siloed capabilities, the ability to cater to a spectrum of stakeholders, including accountable care organizations (ACOs), bundled payment programs, full and partial capitation, and the Medicare Shared Savings Program with upside and downside risk. Additionally, it should be noted that while CBOs are a critical part of this operation, many have slim budget margins and little to no funding for digital technology to improve efficiency and expand capacity.
Considering these factors, healthcare’s focus shifts toward Value-Based Administration (VBA).
Understanding VBA’s role
Currently, both payers and providers struggle to efficiently administer value-based arrangements at scale. Yes, they may have investments in existing claims and clinical workflow-based legacy technology, but they lack the ability to manage a complex care network involving multiple stakeholders in differentiated roles while accommodating the requirements of rapidly evolving value-based payment models. Additionally, the implementation of VBC contracts can take different forms, leading to spreadsheet reconciliation processes that lack timeliness.
How leaders should approach the task at hand is by extending those critical legacy systems. Luckily for them, VBA does just that by encapsulating purposefully flexible hierarchical partner models, scalable operationalization of contracts, and data sharing capabilities necessary to execute on value-based programs.
Though so many healthcare stakeholders rely on data analytics and digital tools for network management, care coordination, and care delivery, they are simply not enough. Oftentimes, these point solutions can lead to more silos of information, which make it difficult to share with other partners and contribute to inefficiencies that impact outcomes and costs. Few organizations are willing to throw out everything and start over, given the substantial investment they’ve made in legacy information technology (IT) infrastructure and workflow. However, these investments either cannot administer or cannot scale these arrangements.
This is where VBA enters the picture to enable VBC networks to facilitate whole-person care. VBA simultaneously orchestrates medical and nonmedical care delivery resources and services to drive better patient outcomes and lower healthcare costs. When deployed comprehensively, VBA cuts across all care settings with data capture and permissioned data sharing, including management of funding pools and risk arrangements, and does so at scale.
Currently, industry stakeholders continue to operate under a mix of Fee for Service (FFS) and value-based payment models. This is despite a recent announcement by the Centers for Medicare and Medicaid Services indicating a trend toward payment model simplifications.
These payment models range from solely FFS to FFS including incentives for reducing gaps in care, to shared upside and downside risk (or both), to full or partial capitation to downstream partners. Additionally, a white paper published in 2021 shows that FFS “with no link to quality or value, still accounted for nearly 40% of all insurer payments, and the majority of payments in Medicaid and commercial insurance.”
Providers and payers, who were already managing multiple payment models, are now also dealing with the fact that they must handle the health inequities hampering the healthcare system; this realization was brought into sharper focus during the COVID-19 pandemic. This makes SDOH data crucial to identifying factors such as housing security, income level, and access to transportation that exacerbate health inequities.
However, a VBA process empowers payers and providers to collaborate with CBOs in a VBC network to share information, execute specific services, and coordinate patient care plans. This holds every partner in a VBC network, medical and non-medical/CBO, accountable to deliver on their expected value.
VBA in action
VBA coordinates the “many to many” relationships between VBC stakeholders and their ecosystem attributes to enable data capture and sharing, full execution of required financial arrangements for partners upstream and downstream, as well as necessary B2B and B2C multichannel communications.
These partners may include health insurance carriers, risk-bearing entities like ACOs, clinically integrated networks, and carve-out programs from chronic disease management. Additionally, other partners may be primary care physicians, care management programming, social services networks, and community-based service organizations.
Another core capability of a VBA approach is the upstream capture of funding pools followed by downstream distribution to VBC network partners. This is conducted in alignment with the wide range of disbursement models in play within a given network.
For example, a healthcare organization could transfer money to a home-dialysis provider for full payment after documenting receipt of the required post-visit status report for a patient, while also paying a Meals on Wheels community worker upon gathering confirmation of food delivery for the same patient. High-performance VBC networks enable both medical and non-medical resources to fulfill their respective roles within a diverse plan of care while using the same technology rails. This administrative approach improves outcomes, lowers costs, and creates greater efficiencies.
VBC is transforming healthcare as a whole: using a comprehensive, proactive approach that incorporates SDOH and leverages these services provided by CBOs. But to effectively implement VBC, it is essential that both providers and payers manage complex contractual relationships between network partners to ensure that all participants are paid accordingly. A keen focus on VBA is the driving force to make it happen.
About Lynn Carroll & Rahul Sharma
Lynn Carroll is the chief operations officer and Rahul Sharma, chief executive officer, of HSBlox, which assists healthcare stakeholders at the intersection of value-based care and precision health with a secure, information-rich approach to event-based, patient-centric digital healthcare processes – empowering whole health in traditional care settings, the home and in the community.