By: Frazer Buntin, President, Value Based Services, and Kate Rollins, Vice President, Clinical Programs and Performance, - Evolent Health
The new skills required to operate a value-based care business successfully are vast, and the financial return becomes viable only if a provider can go at-risk for enough lives to scale their investment. This reality is a major inhibitor to providers who want to move up the risk continuum and for those who tried and failed. Unfortunately, many value-based care (VBC) initiatives fall at the lower end of a spectrum of accountability, amounting to little more than glorified pay-for-performance tasks that check the box for bonus dollars. This doesn’t drive accountability into the care delivery system in the same way that taking on both upside and downside risk does. To effect lasting change, providers are moving up this continuum of risk-taking through mechanisms that allow them to capture more of their generated savings, but also hold them financially accountable for losses—such as Next Generation ACO or Medicare Advantage for Medicare populations.
Providers making the move toward risk are balancing the in-sourcing of new skillsets with outsourcing to third parties. Those who are seriously committed to VBC as their path forward are looking for partners that can help them rethink and redeploy their clinical model for effective population health, get technology in place to enable clinicians and administrators to operate effectively, and, for the most sophisticated, run the back-office administrative components that are culprit cost drivers, but which providers must own if they want to capture the maximum financial gain from the value they’re creating.
The way the industry is evolving, and where providers are innovating in the space, is bridging the clinical, administrative and financial:
KEY TAKEAWAY: Any given provider could pull all of these levers and still not see an ideal return if they’re only doing it for a few thousand patients. Once infrastructure and process is in place and there’s a roadmap for success via a smaller population test case, providers are then ready to place more risk lives under management. How they accomplish this depends uniquely on the dynamics of their local markets, which drives the wide variety of business strategies across the country. For instance, some take their PSHP to new geographies to get more membership; some create alliances with other provider groups to get more patients attributed to a successful ACO; some have immediate scale if they’re granted the opportunity to manage hundreds of thousands of Medicaid beneficiaries. Regardless of which strategy providers choose to naviagte the shift to value-based care, it’s clear that they’re on the right track to serving a common goal of improving health.