Transitioning from a fee-for-service billing model to value-based care that incorporates financial risk and rewards tied to the patient’s health outcome is not easy.
Primary care physicians (PCPs) and other physicians continue to migrate away from the traditional fee-for-service (FFS) reimbursement model toward value-based and risk-bearing care models that reward better outcomes and reduced healthcare costs. Value-based care (VBC) contracts are projected by McKinsey to cover nearly 65 million Americans, or 22% of insured lives, by 2025, up from 15% in 2021.
The trend toward VBC is clear. Yet transitioning from a volume-based transactional billing model to one that incorporates financial risk and rewards tied to the patient’s health outcome is not easy. Successful implementation of value-based programs requires PCPs and physician groups to deploy technologies that provide complex hierarchy support for contract modeling, onboarding, data capture, digitization, value-based payments and exchange. These technologies also must support Social Determinants of Health (SDoH), quality reporting and near real time data synchronization between different parties.
A VBC network consists of multiple stakeholders that may include hospitals, physician groups, payers, risk-bearing entities such as accountable care organizations (ACOs), clinically integrated networks, social service networks and community-based organizations (CBOs). Within these networks are many-to-many relationships in which an entity in one network may be engaged in several networks under various contractual engagements with other entities. An organization that offers nutrition intervention services, for example, may have contracts with healthcare providers across multiple VBC arrangements. Such a “network of networks” can work only with an infrastructure that supports the hierarchies between these entities.
One major barrier to the effectiveness of a VBC network is the inability of providers to onboard and manage a complex multistakeholder care network while accommodating the event-driven and episodic requirements of payment models no longer claim-centric. Another common obstacle is the failure of providers both to obtain timely data reporting and accurately forecast contract performance.
Enter Value-based Administration
A successful VBC contract modeler and reimbursement model facilitates easy onboarding of stakeholders and data capture. Critically, it also includes mechanisms for financially rewarding stakeholders for their roles. These mechanisms make the administration of funding pools, including downstream distribution of funds and data exchange to participating partners, one of the most vital functions of value-based execution.
Traditional approaches and legacy systems, however, do not support the hierarchical relationship structures necessary for onboarding stakeholders in value-based contracts, creating a daunting challenge for providers. Further, traditional approaches and legacy systems do not enable scalability for the orchestration of cascading payment models (under which payer-provider collaborations incorporate risk-bearing entities and downstream participating providers). This reduces the ability of providers to accelerate adoption of varied alternative payment models.
Such a hierarchical approach to partner onboarding, scaling of contract operationalization, and permissioned data sharing is essential for aligning the medical, social, behavioral, and environmental components of successful Value-based Administration (VBA) and high-performance networks that allow providers to treat the whole person while delivering care more efficiently and cost-effectively.
For providers to fully leverage relationships in a VBC network to deliver better care at a lower cost, four major components are required:
Implementation of a robust cloud-based data infrastructure to allow real-time clinical decision-making, information sharing and analytics
Realignment of downstream reimbursement to include both medical and non-medical providers (behavioral health services, drug treatment centers, etc.)
Incorporation of SDoH resources and partners such as CBOs
Instrumentation of a dashboard view into real-time performance against all contracts along the way (versus only at year’s end)
An integral part of effective VBA data infrastructure is use of technologies such as artificial intelligence (AI) and machine learning. Such technologies enable systems to glean information and insights from the treasure trove of big data collected and shared across the VBC network. Proper data digitization across structured and un-structured data enables data to be queried in a way that enables getting valuable insights that can help physicians as well as all entities involved in the network.
By digitizing and co-relating data to create a Patient LHR (Longitudinal Healthcare Record), providers can evolve from transactional processing to the outcomes-based mindset needed for VBC. This requires creation of a data infrastructure based on ontology mapping and proper digitization of the semi-structured and unstructured data sets. The latter process makes it possible to synthesize data sources of different kinds, resolve inconsistencies, help identify errors or misreporting, and seamlessly integrate credible new feeds.
Once the underlying robust data infrastructure is in place, a set of secure and scalable cloud-based microservices – on which different applications and integrations are built – can be deployed.
While a majority of provider organizations already have technical infrastructures in place, these do not offer the adequate support for hierarchies nor the data foundation layer of ontologies necessary for VBA.
Fortunately, it is possible for providers to leverage technologies that support VBA without a rip and replace strategy. Accomplishing this requires a platform infrastructure to integrate the data layers seamlessly, then extend that data layer either as a DaaS (Data as a Service) or as a PaaS (Platform as a Service) so that partner firms or clients can use existing applications served up via microservices or extend/create microservices and business applications for their own needs.
To deliver value-based healthcare, a unified view of the patient is imperative. A patient-centric LHR using the methodology described above allows for easy data sharing in a permissioned manner and empowers physicians by delivering pertinent information in a timely manner for clinical assessment and decision-making – with a 360-degree view of the patient.
The increasing deployment of VBC models is driven by a common desire among providers and payers to improve patient outcomes while lowering healthcare costs. Value-based Administration can support the hierarchical needs between multiple entities involved in VBC. Coupled with an adaptive and scalable data and microservices infrastructure, VBA will accelerate the adoption of value-based healthcare.
Lynn Carroll is the chief operations officer (firstname.lastname@example.org) and Rahul Sharma, the chief executive officer (email@example.com) of HSBlox, which assists healthcare stakeholders at the intersection of value-based care and precision health with a secure, information-rich approach to event-based, patient-centric digital healthcare processes – empowering whole health in traditional care settings, the home and in the community.