Finding the Right Fit in Value-Based Care Managed Services

Though we are seeing reduced regulatory pressure in this space, value-based care (VBC) is still a big deal to many providers for financial and competitive reasons. There are a variety of firms and software vendors out there that can help healthcare organizations make the complex transition to VBC. Every provider needs to find the right fit for their organization.

Fundamentally, our recent Value-Based Care Managed Services 2019 report is about finding the right fit for those varied and specific needs. In this report, KLAS examines each vendor’s offerings to determine the projects and organizations they work with in addition to their performance. We break things down into four different options in an effort to make this decision clearer for providers.

Option 1: Full-Service Firms

When it comes to full-service firms, there are still a good portion of customers that are highly satisfied. More than half of Lumeris’ customers are highly satisfied, and Evolent also has a high number of satisfied customers. Providers reading the report should recognize that an experience with either vendor is probably going to be good. Odds are that healthcare organizations are more likely than not to be satisfied with their experience. But there are a couple of organizations that are not satisfied.

Interest in full end-to-end interaction is also dwindling. That is largely due to the high cost associated with outsourcing all VBC functions. Another contributing factor is that some organizations have extremely good experiences, but not every organization does, and there is no set formula that guarantees success.

There are several benefits of using an end-to-end vendor. They are always at risk with their customers; if their customers do well financially, they do well financially, and vice versa. They also come with a great deal of expertise about value-based care. These VBC projects are also very complex, and some organizations need or just want the full level of help. It’s good to keep in mind that complexity also correlates very well with overall satisfaction. Typically, simpler projects get higher scores.

Option 2: Focused Firms  

Focused firms are exactly what they sound like—firms focused on specific services. The main struggle with this option is that it’s hard to compare focused firms to one another. They often do completely different things. This is highlighted in the two vendors found in this section, which are not direct competitors. Caravan Health deals largely with ACO enablement; they set up and help run ACOs for providers. Conifer Health Solutions on the other hand takes on larger engagements and help providers with care management and health plan administration. They have also done employee plans and have a broad portfolio of offerings.

Option 3: PHM Software Vendors

We are seeing a growing market for services from software vendors. While end-to-end service is a shrinking market, providers are telling us that they are looking to their population health management (PHM) vendors to do some hand-holding during a specific project, perhaps with a few care managers. It’s often easier for health organizations to leverage their existing relationship with their software vendor than to hire another full-time employee who gets trained and then perhaps leaves for a different health system with better pay.

If you look at the 2019 Best in KLAS report, four of the top five population health vendors offer additional services. There seems to be some carry-over from offering services that helps make the tools better. I expect we will see more software vendors offering similar services over the next one to two years.

Option 4: Do It Yourself

The fourth and final option covers providers who want to tackle VBC managed services on their own. Like the third option, this is also a growing area of interest among providers. The appeal here is mostly cost driven; providers tell KLAS that they want to purchase software and then try to run it themselves. The main downside of this approach is that you are doing this on your own, without a guide through the maze of value-based care.

Specialization Ahead

There are pros and cons to each of the four options depending on what the healthcare organization is looking for. I think we will see more focused firms pop up in the next few years. These will be firms not tied to a specific software product but rather to specific needs, such as firms that providers can outsource their data analytics to. In fact, I recently spoke with a provider who sends their data to a services firm, which analyzes the data and then sends back information for the provider to act on.

To see individual vendor profiles and performance in each of the options, I recommend taking a look at the full report.

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