The Big Challenges (and Bigger Opportunities) of Value-Based Care
Among the countless changes underway in the healthcare space, one market trend is particularly intriguing for its potential to disrupt the entire ecosystem.
Value-Based Care (VBC) programs seek to tie compensation earned by healthcare providers to how positively they impact a patients’ care. Through financial and other methodologies, these models are designed to increase accountability for patient outcomes while expanding provider autonomy to deliver the right care at the right time.
Rather than the traditional fee-for-service model, providers’ revenue fluctuates based on whether they hit specific targets for quality, equity, and cost. It is program-based, not volume-based, with the goal being to increase accountability for the patient and the provider. It’s the kind of healthcare delivery reform that emphasizes quality of care over quantity of care, a more holistic approach that considers the entire medical journey of a patient.
Quite frankly, the current level of volume and affordability in the healthcare industry is expensive and unsustainable. At a certain point, payers won’t be able to process and pay for every claim that’s made. A patient-focused model of care (like VBC) is about incentivizing providers to do the right things and engage with patients in the right way, and provide a payment model that supports those efforts. To do that, there will be a need for more coordination, collaboration, information, and systems, all of which will be needed in a proactive and longitudinal way.
Still, incentives and payments will matter. After all, these are businesses, and providers can’t do what they need to do if they aren’t properly compensated. Incentives that have economic value must be aligned for all parties across the board. If the finances don’t make sense, nobody will be able to afford to do the right thing in the long run.
The right tools will be required in order to develop and administer these payment models, and consistently and efficiently scale this payment evolution. Additionally, there must also be an accompanying service strategy to help stakeholders understand how they benefit from this different payment model, one that empowers patients to make the best choices for their health. The traditional transactional cadence is changing to a non-transactional one — the VBC payment models — and that’s how our whole ecosystem is moving.
Indeed, VBC represents a fundamental shift in the relationship between payer and provider.
That payer-provider relationship must ensure that not only are incentives met so provider businesses can succeed, but that there’s a transparency, trust, and fluidity within the exchange of data that happens between the two. Payers have information that they can share with providers, and they can structure payment models that do the right things, but they can’t do that without the system to enable it and the information to guide it.
Data is the currency of VBC, which requires analytics from various points within the life cycle of a patient’s care. The trick is to make sure that data is accurate, clean, timely, and readily available. There will still be claims and encounters that need to be understood and processed. We’ll need people to analyze them and see how they impact payments. After the data goes through its transactional life cycle, we can evaluate it and predict outcomes better in the future.
The nature of healthcare — with its myriad combinations of providers, payers, employers, and patients — makes it difficult to find proven practices and scale them. Healthcare has to be a “win, win, win”: it must work for the patient, for the provider, and for the payer (i.e., the employer or sponsor). If we keep that in mind, we can build solutions accordingly.
At NASCO, we support the healthcare ecosystem and, consequently, its future. We’re preparing for this industry transformation by looking at VBC as an opportunity to reshape and uplift that ecosystem, rather than a “silver bullet product capability” we can employ as a single solution.
Ultimately, however, we will judge the success of VBC not only by how well we contain medical and administrative costs, but by the resulting health improvements of the shared customers we serve.
Lori Logan is the Chief Product and Growth Officer at NASCO. She has previously held leadership positions in the healthcare space at companies including athenahealth, Geneia, Cigna, and TriZetto (a Cognizant Company).