Does Value-Based Pay Need to Slow Down?

June 21, 2018

Trepidation by providers to take on more risk is threatening the road to value-based care.

The transition to value-based care is chugging ahead, but many providers are struggling to take on the risk required for these models to succeed.

That’s according to Andrea Gelzer, MD, senior vice president and corporate chief medical officer for AmeriHealth Caritas, a managed care plan. Gelzer's colleague Chelsea Newhall, director, Corporate Strategic Medical Initiatives at AmeriHealth Caritas, presented at AHIP’s Institute and Expo 2018 in San Diego on June 20.

“I think providers were fine with pay-for-performance-if they were meeting certain quality goals, they got extra money,” Gelzer told Managed Healthcare Executive before the conference. “But that transition has not necessarily improved care or lowered costs. As we’re attempting to move providers across the alternative payment continuum, we are seeing many providers are not ready to take on the significant risk and take on the care coordination they need to address patients in a really holistic and global manner to drive outcomes.”

Gelzer said about 70% of AmeriHealth Caritas’ members are touched by some kind of value-based payment, but it’s difficult to get providers to want to take risks related to these vulnerable populations that face numerous barriers.

Even at her organization Gelzer said providers are only adopting upside risk arrangements. In moving ahead in value-based care, there has to be more support for providers and patients to motivate health systems to take on more risk, especially downside risk arrangements with high utilizers, she said.

“It’s the provider readiness that’s the biggest hurdle, and I think the government is starting to see a backlash in trying to move providers too quickly,” Gelzer said.

Providers, she said, lack the financial and practice infrastructure to manage risk associated with the more advanced value-based models. Moving forward, she said, these arrangements should still be a goal, but a slower path might be required.

More research is needed to highlight who is having success and what they are doing, she added. More than anything, though, Gelzer said the focus must remain on patient care.

“We often lose sight of what really matters and that’s improving patients’ quality of care and outcomes,” she said. “If we can find a common ground, we can move forward.”

On the commercial side, Richard Popiel, MD, executive vice president and chief medical officer at Cambia Health, told Managed Healthcare Executive he agrees that collaboration is key and that deeper relationships and better partnerships between payers and providers are critical to transitioning to value-based payments and delivering more personalized, high-quality healthcare experiences for patients.

“We have made significant progress in moving from a fee-for-service payment system to a value-based payment system,” Popiel, who presented at AHIP 2018, told Managed Healthcare Executive. “Examples of this include patient-centered medical homes for primary care physicians, accountable care organizations, and bundled payments. There are many variants of these models in markets nationwide, but we have not made enough progress.”

Popiel pointed out that CMS has shared examples of models that have demonstrated success. These are physician-owned accountable care organizations and models where there is both upside and downside risk.

“In many cases where providers engage in both the fee-for-service world and the value-based payment world, there is tension around which payment model to prioritize, Popiel said. “Smaller practices are still challenged with limited resources and larger organizations are challenged with alignment. We believe that value-based payment is just a contract model-much better than fee-for-service-but that is only one aspect of the relationship between a health plan and its providers.”

Tailored solutions for providers

Health plans can do a few key things to help providers address the burden of new payment expectations, Gelzer said. One is by providing transformation support programs.

“We have practice transformation directors in every market, Gelzer said of AmeriHealth Caritas. “They go out to practices and help providers use and process data, and reach out to patients and work with them.”

Organizations should also provide data transparency and support that helps practices monitor how they are performing and guides them in managing new types of contract arrangements, she said.