Value-based care: What it will take to be ready for downside risk by 2025
The pandemic is accelerating healthcare providers’ move from fee-for-service to value-based care. Real-world examples highlight the capabilities that will be required for success.
From telehealth to care management to where care is provided – healthcare delivery changed rapidly in response to the pandemic. Many health systems learned that reliance on traditional fee-for-service left them vulnerable to dramatic volatility and drastic shifts in demand for certain services.
U.S. officials have made it clear that they will continue to link healthcare payments to value-based care. It is expected that the Centers for Medicare & Medicaid Services (CMS) wants all providers to take some downside financial risk by 2025. The U.S. government also wants half of Medicaid and commercial payer contracts to follow value-based care models by 2025.1
5 capabilities healthcare providers need to succeed with value-based care
Creating targeted initiatives that align value-based care with operations, physician groups and care delivery can be transformative for patient care and financial outcomes. Here are five capabilities healthcare organizations will need to do so effectively:
1. Assess risks to help deliver the right and equitable care to your population
According to an IBM Watson Health PULSE Health Poll during the pandemic, one in three respondents said they had delayed or canceled healthcare services.2 There are many potential drivers for delayed care, such as a lack of transportation. Understanding the needs of communities will help organizations address specific needs and improve overall access to care.
2. Engage health consumers to support their wellness and health
During the pandemic, many healthcare organizations quickly pivoted to telehealth options to meet the needs of their patients and mitigate risk. But it would be a mistake to think of telehealth visits as merely a replacement for in-office visits. Instead, the digital options that have blossomed may be engaging patients who would not normally seek care.
In fact, a recent survey found that 83% of patients indicate a desire to continue using telemedicine after the pandemic.3 Telehealth is one tool healthcare organizations can use to manage larger populations. It can help engage patients in a setting that makes them feel comfortable and enables greater access to care, which helps organizations better serve communities and grow market share.
3. Capture social determinants of health, and link to consumer groups and community services
Healthcare providers can continue to grow their brand and services by leveraging insights into their target communities to offer services exactly where there are needs. For example, one client made changes based on localized estimates and moved an outpatient care center to a new market to serve their population base. In doing so, the organization saw a two-fold increase in care and retail pharmacy utilization due to increased convenience for the population. This amounted to USD 2.8M net revenue including ancillary services, far exceeding three-year budget projections.
4. Collaborate with others within the healthcare ecosystem
As health systems coordinated care for COVID-19 patients, they worked closely with others in the healthcare ecosystem to ensure beds were available for the patients that needed them most. Working with post-acute care providers is critical to a hospital’s ability to maintain quality care and meet post-acute care needs, as well as prevent costly re-admissions and emergency department visits. Engaging with primary care providers in the community can help care teams provide more cohesive care for patients.
5. Develop a more advanced information management strategy
Health systems looking to enter or expand their value-based care footprints will need to have a platform that provides a near real-time view of performance. In additional to driving performance, and planning for community needs, having insights from the data can help healthcare providers negotiate competitive rates with payers. Working with one client, we evaluated reimbursement for major joint replacements with five of their top commercial payers. We found the total cost of engagement to the client, which it used to develop a target for future negotiations for reimbursement benchmarks.
The resourcefulness and drive that fueled organizations during the pandemic can advance their progress toward value-based care. Where there is risk and apprehension, there is also hope and opportunity. From overcoming the concerns of taking on downside risk to dramatic changes to contracts and clinical practice, figuring out the successful transition from fee-for-service to shared risk, the rewards long-term are clear.
- See guidance from CMS to state Medicaid Directors, page 4, Sept. 15, 2020 www.medicaid.gov
- 3,004 survey participants interviewed from Dec. 1 – 13, 2020 with a margin of error +/- 1.8% www.ibm.com
- Telemedicine today: Patient adoption and preferences during COVID-19 and beyond. June 2020 Doctor.com survey