Lynn Carroll, Chief Operating Officer, HSBlox
LinkedIn: Lynn Carroll
LinkedIn: HSBlox, Inc.
David Wolf, Vice President, Product Management, MedeAnalytics
LinkedIn: David Wolf, MBA
LinkedIn: MedeAnalytics
The fundamental goal of value-based care (VBC) is to improve patient health outcomes by prioritizing preventive care and wellness, thereby reducing overall healthcare spending through better management of costly chronic diseases.
Heart disease, stroke, diabetes, cancer, Alzheimer’s disease, and other chronic conditions are responsible for 90% of the $4.5 trillion in annual U.S. healthcare expenses. (For context, U.S. healthcare spending in 2000 was $1.4 trillion; in 1970 it was $74.1 billion.)
VBC models come in many flavors, including accountable care organizations (ACOs), bundled payments, and patient-centered medical homes (PCMHs). To be effective, VBC models are dependent on collaboration between providers, patients, payers, and other stakeholders, such as community-based organizations (CBOs) and other entities that provide wellness services.
In addition to benefiting individual patients and population groups, VBC models help payers by reducing the need for costly treatments and procedures. Unlike traditional fee-for-service (FFS) models, which focus on the quantity of care provided, VBC models determine reimbursements based on the quality of care and superior patient outcomes.
However, to fully leverage VBC models, payers must implement comprehensive contract management and payment systems that differ from FFS models. Successful VBC networks, for example, require clear and transparent payment processes.
Conventional administrative systems built for FFS are incapable of managing the complexity, scale, and intricate “network of networks” relationships typically found within a VBC framework. Payment transparency is necessary to ensure all parties understand the performance metrics, measurement methods, and contract terms that govern their compensation.
Driving insights with analytics
For payers to derive actionable insights, a comprehensive analytics platform capable of aggregating and analyzing diverse data sources (internal and external) is essential. The right digital platform can process both structured and unstructured data to perform risk assessments of patient groups under specific contract models. This analysis should address critical questions about the payer’s patient population, referral trends, key cohorts, and high-risk/rising-risk individuals within those groups and their care gaps that must be addressed.
An interactive digital platform must facilitate the integration and digital processing of varied data sets, support user-friendly contract modeling with intuitive workflows, and enable outcome-based sensitivity analyses. It also must empower payers managing VBC contracts to collect, digitize, organize, and store pertinent data, including electronic health records (EHR), pharmacy and demographic information, and social determinants of health (SDoH) data.
Once collected, normalized, and organized, payers can feed this data into a contract modeling tool with a rules engine and querying functions. This allows payers to compare different VBC frameworks and build adaptable contracts.
Payers then can store these contracts digitally in a “smart library” for easy access and adjustment, supporting the scalability of VBC initiatives through a repository of performance data and “what if” scenario simulations. Smart libraries of digital contracts are key to the ability of payers to scale their VBC programs.
The digital platform can distribute digital contracts to stakeholders for review and approval, ensuring all parties understand and accept performance metrics, payment structures, and other VBC terms. This approval workflow, which mirrors digital signature workflows in applications like DocuSign, promotes transparency, traceability, and compliance across the healthcare ecosystem.
Payers can leverage advanced analytics and structured data to conduct provider risk stratification, benchmarking, and scenario analyses. Accurate comparisons of providers presented in a cohesive fashion help payers understand market impacts and demonstrate the value of their VBC strategies relative to their peers and national benchmarks. Payers also can use analytics for opportunity analysis and ad-hoc reporting. Data can be used to quantify the value of solutions they are offering respective markets.
Why payers need an updated infrastructure
It is crucial for payers managing VBC contracts to optimize their care networks. In particular, payers must balance narrower networks to manage costs while ensuring care access. A more focused network can result in more controlled spending and better care coordination. One potential downside of narrower networks is that they may be perceived as limiting care access, which could act as disincentive for plan members to seek care. Optimizing networks by applying analytics can help mitigate these concerns.
Legacy systems capable of supporting traditional FFS contracts usually fall short in managing complex VBC networks involving multiple stakeholders. Adapting to various reimbursement models like FFS, pay-for-performance (P4P), VBC, and others necessitates a cloud-based infrastructure. Such an infrastructure must effectively navigate the intricacies of different contracts and efficiently report on outcomes and financial performance.
Any new infrastructure built to accommodate the technological and operational needs of a VBC network requires payers to cope with a new set of considerations related to interoperability, data security, and integration of digital health tools.
Conclusion
The success of payer VBC initiatives hinges on a robust digital infrastructure capable of supporting diverse reimbursement strategies and facilitating transactions among a broad network of stakeholders, including healthcare providers, social service organizations, and CBOs. By integrating advanced and actionable analytics with this solid operational foundation, payers can construct a comprehensive data and network ecosystem that underpins effective VBC contract management and network optimization.