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Value-based models are designed to reward health care providers who improve patient care while contributing to an overall reduction in cost.
The ongoing shift to value-based care models means primary care physicians face an increasing responsibility to coordinate care with specialty providers that treat chronic conditions. Managing a patient's chronic condition can improve long-term outcomes by slowing the disease advancement, thereby reducing or preventing complications and overall costs. Specialty care accounts for approximately 75% of health care spending in the U.S. and is why 96% of Medicare dollars go to treating and managing chronic disease.
While primary care physicians are essential in helping patients preserve their health, identify challenges, and obtain appropriate care, the bulk of a patient's treatments will likely be administered by specialists. Traditional fee-for-service models preclude a primary care physician's ability to benefit financially from their vital role in reducing the cost of a patient's care over time.
Value-based models are designed to reward health care providers who improve patient care while contributing to an overall reduction in cost. Primary care physicians may only see patients a few times a year. Still, those visits are where many patients first learn of health risks that can be managed to prevent more serious risks down the road through lifestyle changes or timely treatment.
For these physicians, total cost-of-care agreements represent an opportunity to participate in the savings they help achieve by reducing the patient's likelihood of requiring costly emergency department care or hospitalization due to unmanaged conditions or previously undetected disease.
Physician practices and payer organizations that haven't yet transitioned to this payment model may worry about the complexity of projecting care budgets or targets. They may also doubt their ability to assemble and effectively use the analytical and cost-tracking tools and other infrastructure necessary to support a value-based payment system—but the data demonstrate that value-based care models are worth it.
Easing into value-based care
Although changing to a value-based payment system requires commitment and upfront investment in new technology, there are products available that can position an organization for long-term success. For example, an ACO under Basic Track Level A or Level B of the Medicare Shared Savings Program gives member providers a limited share in savings participation without taking on the risk that comes with the program's more advanced levels.
A helpful introductory period or staged entry for physicians without prior experience in shared risk will undoubtedly limit the amount of shared savings a provider can receive each year (as an example, Medicare Shared Savings Basic Track Levels A and B limit sharing to no more than 40% of the amount saved.) The trade-off for the lower sharing rate is that providers don’t risk of being penalized if the ACO misses its savings goals. This "upside-only" risk exposure is often attractive to physicians adjusting to new software and work processes associated with the ACO's systems.
Later, the ACO may choose to move to higher levels that entail exposure to repaying Medicare or other payers a portion of costs that exceed projections and increase providers’ savings. Some payers establish shared savings arrangements with physicians and other providers to share varying protection and risk. A payer may, for example, offer to share 50% of savings and a lower share of losses (e.g., 30%).
Shared savings essentials
Before forming or joining a shared savings program, primary care physicians should seek trusted advice and educate themselves on their options. Linking payment to outcomes means the larger organization is affected when providers deliver unsatisfactory or inefficient care, but it can also result in predictable revenue in some cases. Therefore, it is crucial to choose referral partners that provide excellent care and patient experiences.
The technology behind the shared savings system should also make operations smooth and efficient for the physician and their support staff. A high-quality platform will maintain relationships with top care providers and simplify the referrals process. It will also facilitate communications and data sharing among stakeholders in a patient's care program.
A single-point solution will eliminate duplication of effort and compatibility issues that can arise from using multiple systems and siloed functionality. Intuitive interfaces that require minimal effort to input data at the point of service will help physicians and their assistants to focus on patient care.
Excellent referral partners coupled with a dynamic technology platform are keys to an effective value-based payment program. For primary care physicians, the investment in technology and adjustment required to adopt new systems will be rewarded with the opportunity to benefit financially from the excellent work they do to keep patients healthy and lower health care costs.
Dan Santmyer is chief actuary for Cedar Gate Technologiesin Roswell, Georgia