Home Health Care Why value-based administration is key to value-based care

Why value-based administration is key to value-based care

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After years of uneven adoption, value-based care (VBC) is gaining momentum as providers and payers seek to improve patient outcomes while gaining control of runaway healthcare spending in the U.S. An overwhelming 94% of health system executives expect value-based contracts to continue growing in coming years.

Making VBC work, however, requires the ability of healthcare stakeholders to reimburse all participants in a VBC network for their services. And therein lies the challenge.

A VBC network first must have an infrastructure that ensures data can be shared by participants upstream and downstream, which may necessitate a technology investment to free up traditionally siloed data and capabilities. Second, a VBC network needs to accommodate a large variety of evolving payment methodologies that fall under the VBC label, each of which may have different incentives, performance metrics and payouts. The spectrum currently includes shared risk arrangements such as accountable care organizations (ACOs), bundled payment programs, full and partial capitation, and the Medicare Shared Savings Program with upside and downside risk.

Finally, providers and payers, i.e., whomever holds financial risk, increasingly recognize that social determinants of health (SDoH) play a huge role in health outcomes and healthcare cost management. VBC networks must be able to integrate nonmedical and community-based organizations (CBOs), and in doing so, enable them to share SDoH and other data, offer services, and play their roles in the joint care coordination plan. Many CBOs, though, are on tight budgets and have not prioritized investment in digital technology.

Enter the need for Value-Based Administration (VBA).

The role of value-based administration

Existing claims and clinical workflow-based legacy technology investments, both on the payer and provider sides, simply are not equipped to efficiently administer value-based arrangements at scale. They lack the ability to manage a complex care network involving multiple stakeholders in multiple roles while accommodating the requirements of rapidly evolving value-based payment models. Instead, what’s needed is the ability to extend those critical legacy systems. VBA encapsulates purposefully flexible hierarchical partner models, digitization-based data capture, and data sharing capabilities necessary to execute on value-based programs.

VBA enables VBC networks to facilitate whole-person care by simultaneously orchestrating medical and nonmedical care delivery resources and services to drive better patient outcomes and the resulting lower healthcare costs. When deployed comprehensively, VBA cuts across all care settings (site-based, virtual, in the home, and in the community), from data capture and data sharing all the way through payment – and all at scale.

While many healthcare stakeholders already rely on data analytics as well as digital tools for network management, care coordination and care delivery, these typically are point solutions that eventually create silos of information difficult to share, leading to inefficiencies that impact outcomes and costs. But given the heavy investment that stakeholders have made in legacy IT infrastructure over many decades, few are willing to tear it all up and start over again. Yet such systems and workflows either can’t administer or are unable to scale these arrangements.

Despite a recent announcement by the Centers for Medicare and Medicaid Services indicating a trend toward payment model simplifications, the current reality is that stakeholders across the healthcare industry are operating under an array of Fee for Service (FFS) and value-based payment models.  These range from straight FFS, to FFS with incentives for closing gaps in care, to shared upside and downside risk (or both), to full or partial capitation to downstream partners. And a white paper published earlier this year shows that FFS “with no link to quality or value, still accounted for nearly 40% of all insurer payments, and the majority of payments in Medicaid and commercial insurance.”

On top of managing multiple payment models, providers and payers now are dealing with the reality – brought into sharp focus by the Covid-19 pandemic – that they must address health inequities in our care system, making SDoH data critical in identifying factors such as housing security, access to transportation, and income level that exacerbate health inequities. A VBA approach empowers providers and payers to work together with CBOs in a VBC network to share information, coordinate patient care plans, and execute specific services – holding all partners in a VBC network, medical and non-medical/CBO, accountable to deliver on their expected value.

What VBA looks like in practice

When executed successfully, VBA coordinates the “many to many” relationships between VBC stakeholders and their ecosystem attributes to enable information capture and sharing, necessary B2B and B2C multichannel communications, and full execution of required financial arrangements for partners upstream and downstream. These may include:

  • Health insurance carriers
  • Risk-bearing entities (such as ACOs, clinically integrated networks, and carve-out programs from chronic disease management)
  • Primary care
  • Care management programming
  • Social services networks
  • Community-based service organizations

A core capability of a VBA approach is the upstream capture of funding pools and downstream distribution to VBC network partners – doing so in alignment with the wide range of disbursement models in play within the given network. Here’s an example: transferring money to a home-dialysis provider for full payment after documenting receipt of the required post-visit status report for a patient, while simultaneously paying a Meals on Wheels community provider upon receiving confirmation of food delivery for the same patient. Diverse, high-performance networks enable both medical and non-medical resources to fulfill their respective roles within a diverse plan of care, using the same technology rails. That’s value – and that’s administration.

Conclusion

Value-based care is transforming healthcare using a whole-person, proactive approach that considers social determinants of health and leverages incorporation of services provided by community-based organizations. To effectively implement VBC, it is essential that payers and providers manage complex contractual relationships between network partners in a way that ensures all participants are paid. A focus on VBA is the key enabler to make it happen.

Photo: atibodyphoto, Getty Images

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