There is broad consensus across the healthcare industry that value-based care (VBC) is a positive step towards achieving the “triple aim” of healthcare: better healthcare experiences and improved health outcomes at lower costs. However, as health plans move towards quality over quantity-based reimbursement models, they are under immense pressure to ingest and operationalize new datasets to properly inform and pay the providers that have transitioned to VBC contractual arrangements. If health plans do not better align their data management, payment management and reporting execution capabilities to enable their VBC contractual arrangements, they run the risk of antagonizing or even losing providers – which will torpedo even the best strategy.
To avoid this outcome, health plans need to retool their VBC execution capabilities to ensure swift provider buy-in and include sustainable access to valuable and actionable data. This lofty goal goes well beyond the triple aim to what I’m now calling the quest for the “healthcare holy grail.”
I’ve noticed three common challenges in implementing VBC contractual arrangements from my conversations with health plans. First, many health plans are taking a reactive approach rather than proactive. For example, as part of a VBC initiative, providers are often promised that they will receive bonus payments at the end of the year. Unfortunately, health plans struggle to analyze the data quickly enough to provide bonuses in a timely manner. Health plans need real-time transaction data to be able to effectively analyze a provider’s adherence to VBC contracts, allow them to “course correct” before they miss quality or financial targets and compensate them accordingly and quickly.
Second, health plans are challenged to offer variations to VBC contracts that are personalized for each provider network and, in many cases individual providers. For example, providers that have different geographic reaches or different measurement strategies require unique contracts. To address this variation, some health plans have built “super spreadsheets” to track hundreds of different contracts. But the reality is these spreadsheets are incredibly complex, time-intensive, resource-consumptive and prone to errors. Simple data inconsistencies can alter entire data sets. This operational model can quickly become unwieldy. Health plans need a more efficient way to track and scale contract variation. Similarly, plans that have built custom solutions often find themselves boxed into an inflexible model that does not allow the plan to adapt to market trends and state value-based mandates.
Third, health plans that are operationalizing these value-based contracts struggle to make the transition away from the long-embraced fee-for-service model transparent to their providers. Often times, providers who have switched to a fee-for-value model do not know how they are progressing towards their contractual goals and ultimately, bonus payments until the end of year or, at best, months later.
This is too late to course-correct and can cause provider abrasion and frustration. Whether it’s a federal Medicare VBC program, a contract signed with a commercial health plan or an experimental VBC program being driven by a state Medicaid agency, the delay in receiving the required transparency and visibility into a provider’s transition and progress is a challenge. In fact, providers performing services under Medicaid VBC contracts with Managed Care Organizations (MCOs) have complained and appealed directly to the state. The major complaint is regarding the lack of visibility into how they are progressing in their contracts and when, and if, they will receive payments from MCOs.
To address these challenges, health plans can benefit from this roadmap to reach the healthcare holy grail:
- User Experience: Choose a solution that allows all the required health plan business units and providers to collaborate and experiment as a team on VBC contract development.
- Solution Velocity: Ensure the solution will scale and provide the rapid deployment and support of contract variation demanded by each provider’s unique characteristics.
- Process and Data Transparency: Empower providers with the required data transparency needed for success from contract inception through contract
Health plans have already begun their triple aim journey down the path of VBC, but often they are building this initiative on an infrastructure that lacks the needed scale, transparency and efficiency. To reach the healthcare holy grail, health plans must choose solutions that can streamline their data processes and execution capabilities, so providers are efficiently equipped with both the right data to be successful contractually and financially, and most importantly, to ensure patients are receiving the highest quality of care at the right time.
Photo: Hong Li, Getty Images