While 2020’s headlines rightfully focused on the COVID-19 pandemic and its effects, value-based care made some incredible advances. The Centers for Medicare and Medicaid Services (CMS) announced a new payment model to promote and advance regional value-based care. The agency also recently issued a final rule to update the “Stark Law” to “advance the transition to a value-based healthcare delivery and payment system.” The Centers also approved a “rule to encourage value-based drug pricing,” according to Modern Healthcare.
These changes highlight the paradoxical progress of value-based care in 2020. On the one hand, value or risk-based contracts helped struggling practices. On the other, the immediate needs of the pandemic slowed adoption. As Emily Sokol, MPH, noted in RevCycleIntelligence: “Long term, it seems inevitable that the pandemic will push the industry further towards value-based care. But in the interim, the coronavirus is actually impeding the conversations and financial stability needed to make this transition a reality.”
So what should practices looking to “make this transition a reality” consider?
Value-Based Care as a Tool to Maintain Revenue
The pandemic caused a steep, rapid decline in patient volume. Many providers were able to partially offset this drop by deploying telehealth and other tools to continue to care for patients remotely. Under our current, predominantly fee-for-service framework, the decrease in patient volumes endangered practices’ revenue; fewer patients, fewer services, less revenue. In one survey of primary care physicians, more than half of respondents feared their patient volumes and financial reserves would not last for more than one month.
However, value-based programs have helped many providers and practices stabilize revenue streams. Because value-based reimbursements are not directly tied to procedures and office visits, providers in capitation contracts continued to receive reimbursements. As FierceHealthcare reported: “Hospitals and health systems that have health plans or value-based care arrangements to cushion the financial fallout from COVID-19 will be better positioned moving into the next year.”
The Challenges of Data in Value-Based Models
Unfortunately, practices can’t make the volume-to-value transition immediately. The complexity of these models is often a major barrier to entry. In order to prosper and profit in value-based payment models, participating providers need to analyze an incredible amount of data, analytics, quality metrics, and other factors. To thrive in value-based care, practices need a robust understanding of these data points, which is not always the case. According to Deloitte Insights:
- Only one in two (51 percent) physicians are aware of the costs of treatments they select.
- Almost half (48 percent) are comfortable discussing costs with patients.
- Just under half (46 percent) say they follow clinical pathways adopted at their organization.
Practices that lack a comprehensive understanding of their finances and contracts may face “attribution losses, missed outcome metrics, missed savings targets, and struggles with reporting requirements,” according to McKinsey & Company. Many payers offer features to avoid these negative outcomes. For instance, participants in CMS’ Geographic Direct Contracting Model can access “many care coordination and clinical management tools” and even “wellness programming memberships, chronic disease management products and services, and digital tools to support treatment and medication adherence,” according to HealthPayerIntelligence.
Even the best tools don’t ensure a seamless adoption of value-based care. But an experienced healthcare partner may help. A trusted partner can guide practices through this challenging process by navigating the necessary contractual complexities, workflow changes, technology requirements, and more. This partnership has two big advantages, according to Sam Starbuck, Vice President of Privia Quality Network. “First, it allows practices to have best-in-class talent available every step of the way. This includes the support of a management services organization (MSO), data and analytics for population health, and various other services. Second, it allows providers to get started quickly and reap the rewards earlier.”
Since the COVID-19 pandemic will likely accelerate the shift to value-based care, now is the time for curious practices to begin planning and creating a roadmap for their volume-to-value journey.