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Pinpointing Strategies, Resources Needed to Move Toward Value-Based Care
By Charles Kennedy, MD

As health care costs continue to skyrocket, most payers are highly motivated to move quickly toward value-based care partnerships. It is clear that providers and payers will need to work together to make these models successful and ensure a sustainable financial future.

Many providers are not ready to leap into a full-fledged accountable care model because they lack expertise in the management of risk and population health. Many practices also lack sufficient capital to make the necessary investments. Payers can provide these resources and expertise, which can offset these costs. In return, they will benefit by having their members receive better, more personalized care, which can lead to lower health care costs in the long run.

Custom Model Considers Provider Capabilities, Challenges
Value-based care is more than just a payment model; it’s a new business model. In the past, providers built their business practices around fee for service. Shifting this focus will require a cultural shift and leadership realignment with the vision. Some providers already are moving in this direction, while others lag behind.

Challenges will vary depending on the organization’s size and structure. Smaller practices may not have advanced EMR capabilities. Large health systems and hospitals may have difficulty managing diverse models from multiple payers. External market forces also will impact providers’ willingness and readiness to change. Those in a highly competitive market may realize that rapid change is necessary. Others in markets where competition is not fierce may take a wait-and-see approach if profitability isn’t at immediate risk.

Developing a Phased Approach
Transitioning smoothly to a value-based care model cannot happen overnight for most payers and providers. Taking a phased approach will be essential to support these dramatic transitions. Many payers are starting with programs that are easier to implement, such as patient-centered medical homes. Others are creating transitional care programs through partnerships with hospitals to prevent readmissions. From there, payers and providers can pursue shared savings models that have shown proven capabilities in improving outcomes and population health.

Pilot programs can provide some insight into how sharing risk and reward will impact cost structure, pricing, and revenue on a greater scale. This knowledge can be applied to future models and also will help payers develop highly accurate financial projections.

Aligning Provider Incentives
Most value-based care models compensate providers based on quality, efficiency, and patient satisfaction measures. Care coordination fees can help offset the investments required by these models and further encourage provider participation. But to dramatically change care delivery, incentives must be large enough to motivate providers and fund process redesign. A population that represents at least 20% of revenue typically is sufficient to start.

Filling Capability Gaps With New Technology
While payer/provider collaborations provide an opportunity to leverage joint expertise, additional investments need to be made. An infrastructure that supports data exchange and connectivity is essential. However, information also must be actionable.

To transform patient data into insight that can improve outcomes, models should leverage the latest clinical decision-support tools. These technologies can turn volumes of patient data into unique patient profiles. Profiles then are compared with evidence-based clinical standards to uncover opportunities where an action may result in better outcomes and ultimately lower costs before potential issues become full-blown problems.

Population health management programs also must use advanced analytics. Technologies that profile at-risk members will allow payers and providers to match candidates with effective health improvement programs. These systems also can provide essential reporting for the provider at the population, practice, and individual level, offering a level of insight on patients that most have never had. With this real-time insight, payers and providers together can gauge provider performance, track progress, and assess the model’s effectiveness.

New technologies also are being used to engage patients themselves. Social, mobile, and Web applications are empowering individuals to take an active role in their health. These applications can deliver personalized health information and guidance. They also can improve the patient/provider relationship by opening avenues for physician communication. These features could include provider appointment setting and online messaging. At the same time, these forums can provide valuable peer support resources for patients with chronic conditions.

Joint Expertise, Technology Provides a Strong Foundation
Before collaborating with willing providers, payers must carefully examine infrastructure capabilities, challenges, and gaps. Fortunately, new technology is providing a vehicle to empower providers, improve population health, and engage patients. This strategic approach will ensure that everyone benefits from value-based care.

— Charles Kennedy, MD, is CEO of accountable care solutions from Aetna.