Value-Based Care — Has it Finally Arrived?

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At times the historical chasm between healthcare providers and managed care payers has felt deep and wide — especially on sensitive topics like utilization management, prior authorization and payment of claims. This business tension has fed the myth that healthcare delivery is a zero-sum game: for one to win, the other side must lose.

Thankfully, value-based payment models are driving closer alignment between payers and providers, creating a shared construct that focuses on achieving long-term population health at a sustainable cost. In thoughtfully deployed value-based arrangements, payers and providers win together with the patient – and their communities – ultimately reaping the benefits of better outcomes.

Unfortunately, the healthcare industry’s shift “from volume to value” has been too slow, particularly among independent providers, i.e., those not owned by or affiliated with a larger health system. This has caused early value-based rewards to fall to the most well-resourced early adopters with robust infrastructure, who in theory need it the least.In pursuing a gradual approach to systems change, we have inadvertently perpetuated a world of “haves” and “have nots” – with the latter disproportionately representing smaller healthcare practices caring for socioeconomically diverse populations.

With the Centers for Medicare and Medicaid Services (CMS) asserting that most Medicare and Medicaid payments transition to value-based models by 2030, we must make certain that those caring for the most complex and vulnerable populations finally have an opportunity to come along for the journey.

The Practice as a Business

Although we don't like to think of healthcare as a business, most independent primary care practices are very much small businesses. Like any small business, these practices succeed or fail on the business models on which they have been built. In most cases, this underlying business model is a fee-for service (or volume-oriented) billing model.

Because of the familiarity of this fee-for-service model, the biggest barrier to value-based change is often the safety of the status quo. It can be both risky and frightening to fundamentally change a business model that has been proven functional, even when margins are less than desirable. Until recently, few felt the need to leap into the uncharted waters of value-based care.

However, the COVID pandemic brought a sharp reminder that no business model is risk-free, with traditional office visits (and the associated billing revenue) falling to near-zero levels at various times across 2020 and 2021. This post-COVID trauma, combined with the CMS mandate, have together driven a renewed sense of urgency on the merits of value-based care.

Remaining Independent Relies on Partnerships

With the broader healthcare community no longer wondering “if” but rather “how” value-based care becomes a systemic reality, primary care providers are in desperate need of a roadmap for converting legacy fee-for-service businesses into value-based practices. While there are many new capabilities that must be introduced in order to successfully make that transition, the real challenge is the sequencing.

Cash-strapped primary care providers face the reality of needing to invest in new infrastructure, data management and clinical services, all without overextending their finely tuned (and often thin margined) business models. All of this plus the actuarial complexity of underwriting, performance monitoring, performance reconciliation, etc. makes the situation all but impossible.

Here's the good news. Primary care providers, generally, provide excellent patient care. It’s why they went into primary care to begin with. They don’t need slick technology, consultants, artificial intelligence or any other external factor to show them how to be compassionate caregivers.

Specifically, they need the following:

  • Help organizing their work. The average U.S. primary care practice has roughly 14 managed care contracts, all with unique expectations, terms, and incentive programs. The sheer volume of these programs creates a tremendous administrative burden, perpetuating the poor outcomes they were designed to disrupt. Asking providers to pile on “one more thing” into an already-chaotic day is not the answer.
  • Help with their toughest patients. It’s no secret that a relatively small minority of patients consume a disproportionate majority of healthcare services. While providers are adept at managing acute conditions and chronic disease, their ability to help their patients navigate life outside of the practice is extremely limited. PCPs need resources outside of their four walls to help address complex physical, mental and social issues that are at the root of poor health outcomes.
  • Help measuring impact. As more providers enter into value-based payment models, they need to know that their value is being measured consistently, and they are receiving a fair portion of the value they create by improving access to care, anticipating patient needs, and avoiding unnecessary hospital utilization. As we ask providers to turn their back on the “old way” of claims-based medicine, we must make sure that all stakeholders have an opportunity to transparently understand population health trends.

While large practice groups and health systems have the capacity to build their own internal services to provide these supports, the average independent primary care practice does not have the scale or capacity to deploy this infrastructure. Thankfully, practices can tap into these services via partnerships with value-based care enablers. These value-based experts are often multi-payer, which helps eliminate the workflow fragmentation of trying to run multiple value-based programs.

They include contract sourcing and adjudication “out of the box,” relieving burdensome administrative duties. Perhaps most importantly, many leading value-based enablers often include home and community-based resources that extend the impact of the providers delivering higher levels of care to complex and vulnerable patients.

For most PCPs, value-based transformation is too complex and multi-faceted to go at alone. A partner can help de-risk the transition and unpack the black box of value-based payment models. More importantly, the right partner can help practices who haven’t historically benefited financially from value-based strategies to secure additional funding and expanded services to improve care for their patients.

In this way, value-based care can truly represent a leveling of the healthcare playing field.

Brandon Clark is Executive Vice President of Strategy and Growth at Equality Health, a value-based care enabler uniquely equipped to address the needs of diverse and historically underserved populations.

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