A national payer study from Change Healthcare has 10 need-to-know takeaways about value-based innovation.
Value-based care is starting to achieve the Triple Aim and commercial lines of business are investing in value-based innovation, according to a new study. Here are 10 things healthcare execs should know, based on a national payer study from Change Healthcare.
1. Almost 80% of payers report improvements in care quality, while 64% report improvements in provider relationships, and 73% report patient engagement improved. The main mechanism for improvements in cost and quality are through coordination of care by an accountable provider like a physician practice or ACO, says Andrei Gonzales, MD, director of value-based reimbursement initiatives at Change Healthcare. “This coordination requires collaboration with the provider by the health plan to share data on a patient’s care outside of the provider’s practice and across the continuum,” he says. “This results in a better provider relationship. When patients see their care as more coordinated and have better outcomes, they will be more engaged and happy.”
2. Payers say value-based care reduces unnecessary medical costs. “Unnecessary medical costs fall into many different categories,” says Gonzales. “In some cases. it can be the cost of a medical device or implant where a lower cost device has equal benefit, it could be higher rates for a provider or facility than another entity with equal outcomes, or it could be excessive utilization of skilled nursing or inpatient rehab when home care would suffice.”
3. For the first time, commercial lines, not government lines of business, are leading adoption, advancement, and innovation of value-based care models and strategies. One theory is that commercial plans are driven more by customer demands to provide quality care at a competitive price than by political drivers that influence government lines of business, according to Gonzales. “As commercial plans have seen improvements in cost and quality in value-based care models, they have accelerated their adoption of the models,” he says.
4. Pure fee-for-service is fading faster than predicted in past studies, now accounting for only 37.2% of reimbursement, and projected to dip below 26% by 2021. The expectation is that the percentage of care in pure fee for service will continue to decline until it reaches a natural steady level, says Gonzales. “It’s not clear where this level will sit, but there will probably always be some level of fee-for-service for care that doesn’t fit well in value-based models for patients with rare conditions or extremely complicated medical conditions,” he says
5. Innovation agility remains a problem, with only 21% of payers capable of rolling out a new episode-of-care program in three to six months. “With the reported benefits, executives will be focusing on improving their organizational and operational capabilities in these areas,” he says.
6. Payers are struggling to engage providers in episode-of-care programs. Education on value-based models and information sharing are key aspects in helping providers succeed in value-based care programs, says Gonzales. “Payers can help providers by delivering well-constructed reports showing their performance and opportunities for improvement, and assisting them as appropriate with selecting high-performing specialist and facility partners for their referrals,” he says.
7. Exceptional medical cost savings are motivating 66% of payers to invest in administrative staff to support future growth of episode-of-care programs. “Value-based care is still relatively new in the industry, and more focus will create a more mature operational model,” Gonzales says.
8. A third to half of payers find episode-of-care models very to extremely effective at improving care quality, across all types of episodes. The key, according to Gonzales, is that accountable providers in value-based care models are incented to coordinate care across the continuum to ensure patients have a good outcome at a reasonable cost. “This requires an understanding of where variation exists in cost and quality and an understanding of what can be done to eliminate unwarranted variation,” he says.
9. More than half of payers are not very satisfied with their current value-based analytics, automation, and reporting capabilities-despite the fact that many of these are designed and developed in house. “Since the models are relatively new, and adoption is still growing, a lot of payers built what they could do quickly to support planning and pilot phase capabilities,” says Gonzales. “Now many payers are looking for support with experience in delivering solutions that help manage their business more efficiently and profitably.”