Making the Shift to Value-Based Care

The well-worn adage of worrying less about outrunning the bear than focusing on staying ahead of the guy next to you applies nicely to the peril of putting off entering into downside risk contracts.

Those moving into VBC contracts are running ahead and driving down spending trends. Providers lagging behind are in a decidedly more vulnerable position.

That’s because CMS is increasingly using regional trends to set target prices in risk arrangements including CJR, BPCI-A, OCM, MSSP, and the new geographic Direct Contracting model.

When risk models are mandated and pricing is set by peers who have already taken steps to provide more efficient care, providers who have not will be at an even greater disadvantage. In other words, the success that others have in risk models today will dictate pricing in mandatory programs tomorrow.

One example already playing out in the market is major joint replacement of the lower extremity (MJRLE). Through BPCI Classic, which had robust and successful participation by many orthopedic practices, the spending curve for MJRLE has been aggressively trending downward. This trend is playing out in other episodes of care as well, including percutaneous coronary intervention and hip fracture surgery.

Managing ‘Episodes of Care’: The Imperatives of Data Analytics & Communication

The value-based care paradigm has arrived in earnest and continues to gain momentum.

Understandably, providers are often at a loss about where to even start this process. Under the new model of care, they are not only responsible for their own performance, they are also responsible for the performance of their downstream partners who are critical contributors to the entire ‘episode of care.’ This responsibility encompasses clinical and financial outcomes. Sending an orthopedic patient to any rehabilitation facility, for example, is no longer an option. Under a VBC contract, providers need to evaluate which of the available rehab facilities has the best patient outcomes, or, if the facility is still working on an FFS basis, whether the extra night they are keeping patients is warranted.

These considerations can make the transition to value-based care feel daunting and leave providers with a myriad of questions ranging from how to calculate the financial impact of the change, to whether the practice will be able to provide care under the benchmarks or target price for each clinical episode. If they do take the plunge, providers might wonder how they will then use the changes in care management or in technology to ensure they are being consistent. That might involve making hard decisions about internal policies, such as who in the practice is doing knee surgeries, or disrupting long-standing referral relationships, if warranted by outcome data.

How providers respond to these conversations ranges from apprehensive to all-in. Regardless of how ready they feel, the transition is coming and not slowing down.

Transitioning to VBC: Asking the Right Questions

In our view, successfully transitioning to the value-based payment model starts with asking the right questions. These questions break down into two general categories: organizational and data.

On the organizational front, providers need to determine the specific needs of their patient population. They also need to ask themselves if they have the appropriate resources in place to support their program. Other key questions include:
  • Is there stakeholder buy-in on actionable levers for success?
  • Does the steering committee review progress against set performance metrics?
  • Is there a process in place to identify patients in the program?
  • Are risk assessment tools used to develop patient-specific care plans?
  • Are decision support tools and/or clinical pathways used, and, if so, do they impact care?
  • Is a preferred provider network in place?
  • Are care redesign efforts improving patient care?
Data Analytics & Benchmarking Performance

When it comes to data, start by comparing what’s driving cost and performance variation within the organization and compare that to what’s driving cost and variation among peers. Then, the organization should answer these questions:
  • When compared against regional and peer benchmarks, does the organization’s performance create opportunities?
  • How has the organization’s cost trended over time?
  • Do recent performance trends create opportunities when compared against baseline performance?
  • What are the probabilities of success within each bundle/risk track?
  • How does improving performance vs. benchmark change the probability of success?
  • What impact does the risk adjustment methodology have on the organization’s target prices?
  • Which bundles/risk adjustment methodology should be used to calculate target prices?
  • Which bundles/risk track should be used to create the highest-value/lowest-risk program?
  • Are there specific improvement drivers? If so, what?
  • How do program target prices compare among providers in the organization’s market?
  • For physical group practices treating patients at multiple hospitals: How do costs at different hospitals compare? What are the respective opportunities for savings reduction?
View the entire Coverys Special Edition Red Signal Report: Value-Based Care Series No. 1.