5 Steps to Create a Value-Based Care Organization

Peter Gardner - Vice President of Provider Engagement Operations
Allen Perez - Senior Vice President of Business Development

Practices are seriously weighing the challenges and benefits of value-based care models these days. Given the increased expenses and decreased service volumes caused by COVID-19, many question if now is a good time to accept higher levels of financial risk.

The answer is yes.

As last month’s blog pointed out, practices with a higher mix of alternative payment models (APMs) have fared better through COVID-19 than their fee-for-service (FFS) counterparts. Those under capitation or pay-for-quality arrangements, for example, maintained steady revenue streams even when service-based payments dried up. But we’re not suggesting that practices should transition to value-based care because of a black swan event like COVID-19. Instead, we are saying that APMs can help practices weather a variety of financial storms, that can range from economic shutdowns, like we saw at the peak of COVID-19, to normal ebbs and flows of business.

Long before the pandemic, practices were getting substantial bottom-line results by successfully navigating the path from FFS to value-based care. Among our clients, for example, practices can average 140%-150% of Medicare reimbursement. We have even seen twice the Medicare rate—but every practice’s journey to value-based care is unique.

With many payers offering numerous different value-based arrangements, practices must understand their options. Practices that do—and that put the right support systems in place—can keep their independence and achieve significant revenue opportunities. While there is no one-size-fits-all approach to value-based care, a partner that has experience aggregating and managing contracts for multiple payer models can help practices take these five steps:

1. Build a community of high performing, aligned physicians. Some practices mistakenly believe value-based success will come simply by joining an accountable care organization (ACO) or clinically integrated network (CIN). In truth, succeeding in value-based care requires a mindset shift. It’s not all about the financials. Usually some cultural change is necessary, which makes collaborative change management essential. A sound partner for aggregating contracts can ease buy-in and alignment across the board by helping to unify everyone around a common set of business and patient care goals.  
2. Choose the right value-based care model. Each practice must carefully assess what the right payment mix looks like for its individual needs. There are many models with varying degrees of participation— from FFS to full risk. ACOs and CINs aren’t the only options, and practices don’t need to give up their independence if they don’t want to. Partners experienced at working within a wide range of federal and commercial models can guide practices through the contract choices that best match the practice’s strengths and goals.
3. Align accountability. In every value-based care model, clinicians are stakeholders who must meet performance expectations to earn financial incentives. So, practices must assess their patient populations’ health needs and build care models that support them. Look at care delivery patterns. For example: Is the practice efficiently using physician extenders, allowing the entire team to deliver effective chronic care management?
4. Use timely, actionable data to maximize health outcomes and returns. Practices have to identify, track and manage against the metrics that matter. Start by pinpointing what will improve medical loss ratio (MLR) and quality performance, and monitor those factors on a frequent and timely basis. A truly engaged, hands-on partner will not only help to identify and track key data points, but will also help practices make sense of the data and turn it into actionable insights.
5. Produce better results through action plans. Data only suggests what issues should be addressed. The next step is determining how to resolve those issues. Practices must meet clinicians and patients where they are and tailor interventions to improve outcomes, quality and MLR. Like everything else, effective action plans aren’t cookie-cutter, but individualized to each market, practice and patient population. They should function as continually evolving incentive plans as well.

All value-based care models require practices to embrace a vastly different approach to care delivery and payment. But now, more than ever, transitioning from FFS to value-based payments is critical for physician practices and for health care transformation. Those who navigate the shift will put their practices and patients in a stronger position—even in the most unpredictable situations.