On this episode Dr. K and his guest Don Calcagno dive into the future of value-based care and why it’s essential for healthcare’s evolution.
Reward structures in value-based care are designed to incentivize outcomes, potentially reaching up to 100%. For example, one significant challenge is accessing data from payers to identify patients with open care gaps, such as uncontrolled hemoglobin A1c levels or hypertension. To address this, we’ve implemented a website where physicians can easily track remaining incentives tied to closing these gaps. The focus is always on patient outcomes—uncontrolled hypertension can lead to strokes, and poor A1c management contributes to kidney failure and vision loss. By eliminating administrative burdens, we empower clinicians to do the right thing for their patients while focusing on closing care gaps effectively.
Advocate Health has seen significant success transitioning to value-based care. Key to this success is understanding the essential factors for managing total cost of care, which include both basic and advanced elements. At the foundational level, transitioning from fee-for-service to value-based care requires addressing resource limitations, particularly for small practices with fewer than five physicians. Infrastructure costs, often a barrier, must be funded upfront to ensure success. Without this investment, practices are unlikely to engage fully in value-based care, especially when financial rewards may not materialize for 18 months. Moreover, providers must consider baseline spending to identify realistic opportunities for improvement, as well as risk mitigation measures like reinsurance to prevent financial losses.
As practices advance in value-based care, flexibility becomes critical. Models like REACH offer varying levels of risk—50% professional, 100% global—enabling practices to choose what suits them best. Accurate risk adjustment is also essential. Current systems, such as hierarchical condition categories (HCCs), often fall short, especially for conditions like skilled nursing utilization. Addressing these gaps requires more sophisticated tools, including artificial intelligence, which can integrate social determinants of health and provide better insights into patient care needs. Furthermore, including hospitals and other providers across the care continuum ensures seamless patient care and minimizes the risks of fragmented solutions.
Drug costs also play a pivotal role in value-based care. For specialists primarily operating in fee-for-service models, payment sophistication is a growing challenge, especially when patients are attributed to multiple providers. For example, chronic kidney disease patients may be shifted from one program to another, fragmenting care and inflating costs. Advocate Health addresses these issues by supporting integrated models that nest episodes, procedure bundles, and longitudinal per-member-per-month arrangements to streamline care and ensure fair attribution.
Looking ahead, value-based care is essential for improving the U.S. healthcare system, but current models need refinement. While global capitation and risk-based models are often seen as the future, many payers lack the infrastructure to manage these models effectively. Building trust between payers and providers is critical to creating sustainable solutions. As we integrate innovative tools and collaborative approaches, we’re committed to creating a value-based care system that meets the needs of both patients and providers.
Takeaways
- Value-Based Care is Here to Stay: While the models are still evolving, transitioning from fee-for-service to value-based care is essential for improving patient outcomes and controlling healthcare costs.
- Infrastructure and Risk Adjustment are Critical: Successful implementation of value-based care requires adequate infrastructure and effective risk adjustment to ensure that care providers are rewarded fairly for managing complex patient populations.
- Collaboration and Trust Between Payers and Providers is Key: Building a transparent, trust-based relationship between payers and providers will be crucial to the future success of value-based care models, ensuring alignment on goals and patient outcomes.
This article was originally published on the SonarMD website and is republished here with permission.
About the Show
An inside look at value-based care in GI
Listen in as Dr. K brings patients, providers and payers together to reimagine GI care in America. He and his guests will discuss emerging trends, research, care and payment models, technologies, regulatory pressures, policies and more. It’s time for a gut check on how GI can help meet the quadruple aim in healthcare: an improved patient experience, better health of the overall population, lower costs and happier providers.
Show rebroadcasts at 8:00am, 4:00pm and 12:00 am ET every weekday.
About Dr. K
Dr. Lawrence Kosinski (@lrkosinski) is the Founder and Chief Medical Officer of SonarMD – a care coordination and drug optimization solution for gut health. After spending 30+ years of his career as a leading clinician and researcher in gastroenterology, Dr. K is now 100% dedicated to bringing patients, providers and payers together to advance value-based care. Dr. K is routinely tapped to present at leading GI and payer conferences, including DDW, GI Outlook, AHIP and others. He has published numerous research projects and previously served on the governing board of the American Gastroenterological Association.
Read Dr. K’s full bio and learn more about the SonarMD team.