Value-Based Care: What Makes a Successful Transition?

By Matt Phillion

What makes for successful implementation of value-based programs?

It starts with technology that provides support for onboarding, data capture, digitization, and information exchange. But the transition from volume-based, transactional billing to a model that incorporates financial risk tied to the patient’s health outcome is not a simple matter of plug-and-play technology. The tech needs to be able to support specific concepts like social determinants of health, value-based payments, quality reporting, and more.

“With value-based care (VBC), what’s old is new again,” says Lynn Carroll, chief operating officer for HSBlox. “When you think back to the 1990s, there was a discussion about global types of reimbursement programs, which started as case rates on inpatient services. It started to move to a percentage of the premium, global cap arrangements. There were a lot of challenges.”

Some of those challenges remain today, like interoperability and workflow issues. In a perfect scenario, Carroll says, the world would move to a global reimbursement scenario involving the total cost of care—“nothing aligns delivery systems like total cost of care,” he says. But high-risk populations demand careful attention during such a move, as well as the impact of referrals.

“In a siloed environment, you might do a lot of referral activity. You’re not accountable for the end result of those kinds of referrals and might be referring for low-value care,” says Carroll. This increases the potential for unnecessary testing procedures. And ultimately, this can expose patients to risk on the medical side.

“When you’re accountable for the holistic approach, not just the holistic patient but the holistic cost, it drives the right incentives for the types of services rendered as well as the volume of those services rendered,” says Carroll.

Beyond global reimbursement models, Carroll sees benefits in models with subcaps for specific diseases or conditions, in which care for those conditions is carved out underneath the global cap. “In most cases, the bailiwick is still heavily focused on fee-for-service volume. We’re getting more value-based care, but it’s very different in how the care is delivered,” he says.

VBC should be a familiar concept these days, as CMS is pushing to have 90%–100% of reimbursement under VBC by 2030. That’s driving commercial relationships, employer/employee relationships, contracting, and more.

“As this transition is going on, it brings into the equation the need to involve community-based and social services agencies that have traditionally not used the same regulations or sophisticated technology,” says Carroll. “Rampant adoption of VBC is still going to take incremental steps along the way.”

Where the conversation starts

Carroll notes that COVID-19 brought to light a problem with the fee-for-service model: How is reimbursement affected when patients only go to the doctor if they have no other choice? As patients attempted to avoid exposure to the virus, canceled elective surgeries, and experienced other changes in day-to-day life, telehealth tried to fill the gap, but telehealth was not a big-ticket item.

“Providers need to get paid for more holistic care, ongoing, and less focused on specific interventions, office visits, trips to facilities,” says Carroll. “As a result, what are the types of communication mechanisms needed to exchange information, to engage with patients, and ultimately create value [for] the patient-and-provider relationship where traditionally a lot of these things have been fairly obfuscated or behind the scenes?”

This shifts the conversation to price transparency and better visibility into how much things in healthcare actually cost: Prior to having a procedure, understanding the cost of complications and the out-of-pocket costs involved can help drive decisions, says Carroll. “When you take choice away, what’s the appropriate value-based program design so those folks have the information they need and the right financial incentives?”

Existing processes vs. new technology

Technology and business practices present hurdles with moving to VBC. Given current investments in technology and associated workflows, major changes can be a painful proposition, notes Carroll.

“If there’s a significant change in business practices, that’s the hardest thing to get past,” he says. “It’s not just the technology that has to change; it’s the commitment to business practices. It’s interoperability-related issues, particularly when you start involving things like social service agencies who are working on yesterday’s tech.”

And new technology running alongside changes to business practices needs to be built into the workflows of those who use it. “The question that comes up first is: How can it be mobile? How can I use it on my smartphone or tablet so I can be mobile and connected from home, from the dialysis center, from the street, to meet the patient where they are?” says Carroll.

This aligns with an overall push for care to be more home- or community-based. “Everything doesn’t have to be done in the existing environmental infrastructure, and patients tend to do better when they’re comfortable, when the family is present, and when they have community support as opposed to lengthy hospital stays,” says Carroll.

Healthcare’s long-standing infrastructure isn’t built for VBC in its current state, he says. “One of the things we tend to look at is an individual service provider. And say that provider is part of a group, but then often participates in multiple locations, has multiple programs they participate in across multiple payers,” says Carroll. “As a result, they’re trying to keep the different flows of communication, funding, medication—and it’s all a challenge because the system is built for seeing the patient, generating the bill, and submitting it to get paid.”

It’s not necessarily the best scenario, but it’s the one that the infrastructure, processes, and delivery mechanisms are built around, he notes.

“More global types of care involve different risks, but more attention is paid to the patient’s needs because it won’t need to be a volume-based business,” says Carroll. Technology also comes into play as care moves into real-time or near-real-time communication with patients, such as through mobile-oriented technology that assists in home monitoring.

“It has a lot of promise: the ability to understand earlier and faster if there’s been a change in status, and, through evidence-based medicine, [the ability to capture metrics] in remote monitoring scenarios,” says Carroll. “The communication across different care teams is going to be driven by mobile technology.”

On the patient side, this value-based, real-time interoperability can help them understand their own care—since patients themselves are often the best source of information regarding what providers they’ve seen and what medications they’re on. However, for the highest-risk patients, this information overload can present additional challenges.

“Patients want the information, but the issue is overall patient literacy with what they’re receiving,” notes Carroll. With real-time technology such as online patient portals, patients can often see their own test results even before their physicians do. That comes with its own challenges—such as patients trying to assess information without a professional to help interpret it. Carroll says providers are working to address this scenario, though. “We’ve seen a lot of improvements in layperson explanations, and those have been dramatically simplified.”

The future of VBC

As VBC moves forward, Carroll would like to see it permeate employer program design and benefit structures. “Nobody’s more invested than employers. They should have an expectation that they’re going to get more value,” he says.

Carroll anticipates that employers will continue to demand better accountability for their healthcare dollars, partially because of the price-sensitive nature of the employer benefit environment.

“I’d like to see an emphasis on continued, algorithmic exploration of what is low- and high-valued care,” he says. “I think there’s a significant amount of unnecessary care being delivered, duplicative services where the same tests are being run, and when you look at what we’re getting for our dollar versus other developed nations, it’s a pretty sad statement.”

We need more global reimbursement, more fixed pricing, and more holistic care for both acute and chronic conditions, says Carroll—especially for underserved populations. “Hopefully, VBC will continue to drive this initiative.”

Healthcare is still looking for the magic bullet to solve the cost of care, he says. “More accountability for the type and volume of services should help with the cost curve, but also improve patient health and well-being,” says Carroll. “We need to get out of this piecemeal, volume-based system that ultimately has the potential to harm patients with unnecessary care delivery.”

Matt Phillion is a freelance writer covering healthcare, cybersecurity, and more. He can be reached at matthew.phillion@gmail.com.