Jumping on the value-based care train

While we’ve seen tremendous progress in the shift towards value in 2017, one thing has become very clear—for every forward-thinking health system that is embracing the change, there is also a health system that remains hesitant to embrace any sort of value-based payment program.

Reluctant providers are typically immobilized by fear: the fear of declining profits; the fear of changing to new, unfamiliar processes that require different skill sets; and the fear - or perhaps the hope - that value-based care models are just a passing fad and thus not worthy of the time and financial investment.

Whatever the fear, the reality is that the value-based care train has left the station. Value-based care programs reward providers for the delivery of high-quality and cost-effective care, rather than the quantity of delivered services. Regardless of how willing and ready providers may or may not be, value-based care is more than a passing fad and is on track to replace most traditional fee-for-service models.

In 2015, CMS announced its plan to transition half of all Medicare payments from fee-for-service models to value-based payment models by 2018. By the end of 2018, CMS intends to tie 90 percent of all Medicare payments to value and quality. CMS is already well-ahead of schedule: as of January of 2016, 30 percent of Medicare of payments were already tied to alternative payment models.

Adopting a value-based care model can be a scary prospect, especially if you’re a health system that is successfully operating under a traditional fee-for-service model. However, as your organization considers jumping aboard the value-based care train, take note of these points:

Medicare Advantage is an ideal gateway to value-based care. Participation in a value-based Medicare Advantage plan can be a great gateway for broader participation in value-based care delivery programs. Medicare Advantage is an attractive model that rewards plans for the cost-effective management of a relatively narrow population and offers risk-adjusted premiums to ensure the delivery of comprehensive patient care, even for those with complex medical needs. With properly structured contracts, providers have the opportunity to share in the savings with these plans.

To get paid correctly, however, providers participating in Medicare Advantage – or most any value-based plan - must be diligent in their efforts to drive quality improvements across the patient population. In addition, documentation and coding must accurately support risk scores and demonstrate the delivery of high-quality care. With the right policies and procedures in place, health systems that test the value-based care waters through participation in Medicare Advantage can strengthen their ability to achieve quality care objectives, manage premium dollars and simultaneously build strong connections with their patients.

Beneficiaries – and your organization - can benefit from Medicare Advantage participation. Numerous studies, including one published earlier this year in Health Affairs, have found that Medicare Advantage patients exhibit better outcomes than their fee-for-service counterparts. The researchers also reported that Medicare Advantage patients had lower rates of hospital readmission and higher rates of return to the community. Medicare Advantage patients may also benefit financially, thanks to flexible plans that offer low or no monthly premiums, limit out-of-pocket expenditures and include additional services such as dental, vision, and hearing aids.

With more and more patients switching from traditional Medicare to Medicare Advantage plans, health systems that participate in Medicare Advantage are more likely to maintain – or even expand – their patient populations. Participation in Medicare Advantage may also enhance physician satisfaction, especially if the plan embraces innovative care models and contracting strategies that promote well-coordinated, high-value care and encourage the delivery of preventative services and early disease diagnosis. Physician satisfaction may be boosted further if compensation plans encourage more focus on the delivery of quality patient care, and less on traditional productivity metrics that force clinicians to rush through patient encounters and see as many patients as possible.

The value-based Medicare Advantage model works. Despite provider fears that participation in Medicare Advantage will lead to financial losses, the reality is that organizations that are operationally efficient and well-managed can achieve both financial and clinical success. Medicare Advantage’s model is structured to promote quality outcomes and is risk-adjusted to compensate for the increased care needs of sicker patients. When care and utilization are appropriate and well-managed, providers are able to deliver high-value care at lower costs. Health systems that provide highly-coordinated services, particularly for their more complex patients, can reduce ER visits and hospitalizations. By applying the right processes and implementing the appropriate infrastructure, health systems can successfully deliver quality, cost-effective care and achieve financial success under a value-based Medicare Advantage care model.

Collaboration with a proven partner mitigates risk. Clinical and financial success is definitely possible for health systems that make the shift to value-based care delivery and payment models – but the process is admittedly not easy. Many organizations choose to mitigate their risks by aligning with a collaborative payer or operating partner that has the knowledge and expertise to help create and capture value under risk-based contracts. An experienced, collaborative partner can assess any operational or technology gaps, provide strategic advising, and offer guidance for avoiding predictable pitfalls.

Whether an organization is building its strategy to move to value-based care, or already has an operational plan in place, the right collaborative partner can help identify and implement proven operational processes and purpose-built technologies that are essential for delivering value-based care. When seeking a partner, health systems should pursue entities that have already “walked the walk” with other organizations, can demonstrate repeated success, and are willing to be compensated based on outcomes, rather than on consulting or software fees.

The move to value-based payment models can be a scary prospect for health systems. However, with the right collaborative partner, providers can enjoy accelerated growth, competitive advantages and clinical and financial success.

About the author: Debbie Zimmerman, MD, has a long and distinguished history of medical leadership at health plans such as Cigna, Group Health Plan and Health Partners of the Midwest. Before joining Essence Healthcare, she served as Chief Medical Officer of Mercy Health Plans, a provider-sponsored plan owned by Sisters of Mercy. She is also an accomplished entrepreneur, having co-founded a successful disease and complex case management firm. Debbie practiced internal medicine for 15 years, and is licensed to practice in Missouri and Illinois. In her current role at Lumeris, she is responsible for clients’ clinical initiatives as well as clinical content and analytics in the Lumeris Accountable Delivery System Platform (ADSP)®. In her current role for the health plan, she is responsible for clinical quality, medical and pharmacy management and physician practice transformation.

By Debbie Zimmerman, MD – Chief Medical Officer of Lumeris and Essence Healthcare

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