The United States’ healthcare system has two main issues: 1) it’s expensive, and 2) our health outcomes aren’t exceptional.
At least that’s what Irene Papanicolas, Ph.D., a professor at the London School of Economics and the Harvard T.H. Chan School of Public Health, found in a study she led. When asked why this is, she responded, “These inefficiencies are likely the product of a number of factors, including a reliance on fee-for-service reimbursement.”
Value-based care is one alternative to our current, predominantly fee-for-service system. This approach is designed to reward providers for delivering high-quality care that improves or maintains patients’ health, thereby lowering overall costs by avoiding expensive patient encounters in the future.
Shifting from fee-for-service to value-based care appeals to providers for many reasons. It offers the potential for meaningful, longer patient encounters that are designed to preserve and boost a patient’s health rather than cycling through an ever-increasing number of patients to treat immediate issues instead of underlying causes. As tempting as this shift is — and as eager as providers may be to get started — there are a few steps you’ll need to take before your practice starts the “volume-to-value” transition.
Ensure Your Practice Is Built on a Solid Foundation
The key to getting started on the right foot in value-based arrangements is by nailing the fundamentals. Make sure operations are smooth and workflows are efficient, then you can begin to layer on the additional services necessary for value-based care.
A simple example is appointment scheduling. Can patients easily schedule an appointment, online or over the phone? What reminders are sent to reduce the risk of a no-show? From there, analyze more complex practice operations, such as revenue cycle management. Is your front-office staff capturing patient information and copays effectively? Are all patient services coded at the right level? Is your billing company collecting your hard-earned revenue?
Finally, leadership must fully embrace the value-based transition and all the difficulties that will inevitably arise no matter how efficiently your adoption process works. This transition takes commitment, and leadership must remain dedicated to inspire all stakeholders to adjust to the changes.
Find a Partner
This step is technically optional, but a strong partner that has successfully supported the value-based transformation can smooth the journey. Some practices choose to designate the practice manager as the leader without any third-party support. Although this may reduce initial costs, it does so at the expense of potential earnings through shared savings programs that would outweigh and more than offset those initial costs.
Some practices opt to have a practicing physician at the helm of the transition. Reviewing contracts, discussing and implementing electronic health record (EHR) tweaks, and data-mining patient files are all crucial to thriving in value-based care, but they are not the best allocation of a physician’s time. While fee-for-service reimbursements and value-based care differ to a large extent, they share one thing in common: The most profitable and meaningful action a provider can take is to spend time with patients.
Partnering with an experienced and successful organization has two huge advantages. 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. Given that healthcare is moving in the direction of value-based care, the sooner you get involved, the further ahead of the curve you’ll be moving forward.
The key is to find a partner that deeply understands the pillars of value-based care: cost, quality, and documentation. A team-based approach allows you to focus on patients while a dedicated team analyzes payer contracts to align incentives with your practice’s strengths. Similarly, a team member with clinical informatics expertise can pinpoint ways to enhance your EHR’s capabilities, like identifying a patient’s risk adjustment factor (RAF) gap and automating that into your documentation workflow.
Assess Your Patient Base
Once you have fortified your foundation and established a relationship with a partner that is purpose-built for value-based care, then you must assess your patient base.
Begin by analyzing your payer mix. Are many of your patients Medicare beneficiaries? If so, you’ll likely want to enter the Pathways to Success program offered by the Centers for Medicare and Medicaid Services (CMS). If you’re a specialist, perhaps an alternative payment model (APM) that bundles payments would be the best option for you.
Risk stratification is another way to view your patient population. As the American Academy of Family Physician noted, “Value-based care models require practices to have a method for systematically categorizing and monitoring their patient populations, so that risk-adjusted payments can be made for the additional care and resources the healthcare team provides to patients with increased risk.” Privia Health allows providers to segment patients by demographic, condition, health history, and more. This functionality, as well as other essential data and analytics, is built into our single-instance EHR to streamline the process for providers and help them succeed in value-based arrangements.
Don’t Boil the Ocean
Value-based care holds tremendous promise and opportunity. As such, it is easy to get carried away when pursuing new payment arrangements. However, since many arrangements have downside risk, providers can be liable for losses when patients don’t meet certain quality metrics or incur excess expenses. As providers become more involved in value-based care, they may hear of success stories that sound like simple, turnkey solutions or silver bullets. However, the best approach, instead of diving in headfirst, is to progress slowly, carefully and meaningfully, but to start soon.