Will You Survive the Journey to Value-Based Care?

Care providers are undergoing a period of rapid change as a combination of policy and market-driven incentives, programs, and activities are converging to establish provider-sponsored 'value' in the marketplace. If the expectation set of purchasers is indeed changing, the market will place a premium on such provider enhancements. Thus the providers' push to invest in new operating models will allow them to bear and manage the risk associated with caring for a patient population. 

-Michael Leavitt, Leavitt Partners Chairman, Former US Secretary of Health and Human Services

The rapid change discussed by Governor Leavitt and its effects are already being felt by payers, providers, patients, and many other stakeholders throughout the healthcare ecosystem. As a result of this massive market shift, many consulting firms and purpose-built value-based care managed services firms are trying desperately to position themselves as the best resource to help providers successfully prepare for and operate in this new and exciting world of value-based care.

Value-based payment models promise greater financial return while delivering better outcomes and higher patient satisfaction. Bundled payments, accountable care organizations (ACOs), and other managed-care models tie financial returns to highly coordinated care and proactive population health management. All assume that the interests and behavior of patients, providers, and payers can be aligned to achieve common goals by sharing the risk of success or failure. Value and quality in healthcare improve when that risk is proactively managed, members are informed and engaged, and providers are supported in care delivery. Realizing these improvements is not easy, nor is it cheap.

According to one executive, John Tam, SVP at Evolent Health, Success in a value-based world requires more than just being good at population health. Health systems also need to capture enough of the value they're creating in order to grow, and not cannibalize, their enterprise.

So the natural question would be, How does a health system capture that value and how much is it going to cost? Payer and provider organizations generally have made extensive investments in both operational and analytical information technologies in recent years. Many of these systems are capable of sending documents and data to one another, yet none is delivering on the need to bring together and share the full complement of health information required for collaboration and engagement, much less doing so in a timely fashion compatible with care management workflows.

We recently interviewed over 125 healthcare executives and confirmed that value-based initiatives and programs are growing in popularity and complexity. But not all organizations will be in a position to meet the requirements or to gain benefits immediately. Understanding which models are feasible and appropriate for your organization will be critical to investing in the right resources to ensure success.

Each of the many options have unique and challenging requirements. Governance and legal needs vary, as do contract and risk structures, requiring you to carefully evaluate and develop underlying infrastructure and payment methodologies to ensure long-term viability. Will you need to transform your organization in order to position yourself to enter into future risk-bearing agreements and continue to compete in your market?

The fact remains that all value-based models require some degree of transformation, and there are a growing number of consulting firms that would like you to select them as a partner in that transformation. In producing our first-ever valued-based care services report, KLAS' goal was to, first, identify the most essential capabilities providers need to succeed in risk-based contracts and, second, to identify which firms/vendors are currently driving value and improved outcomes in the value-based care advisory and managed services market.

According to the providers we spoke to, some vendors are closer than others to delivering the value and improved outcomes providers need to survive the transformation to value-based care. To see which vendors are closest, read Value-Based Care: Making the Shift: Who Can Help?