Sep 29, 2023
Clarify Health recently hosted a virtual roundtable with industry thought leaders to get the health plan perspective on value-based contracting in a COVID-19 era. Vijay Venkatesan, Vice President and Chief Analytics Officer, Horizon Blue Cross Blue Shield of New Jersey, Stephen Carrier, Senior Vice President, Network and Provider Partnerships, Blue Cross Blue Shield of Michigan, and Tony Masso, former President and Chief Executive Officer, Consortium Health Plans offered lively responses to questions posed by moderator Manisha Gulati, Clarify Health.
Throughout the event, the audience, which was comprised of 150 attendees from health plans, health systems, ACOs, provider groups, and other healthcare organizations, was polled. Here is how they responded:
43% of respondents said they were “not sure” as to whether value-based contracts prepared providers for the pandemic. The panelists believe that the high percentage of “not sure’s” is indicative of the fact that value-based care is not well understood. The definition of “value” varies by organization, value-based models are not universally accepted at an industry level, and transparency and coordination between payers and providers are often lacking.
Value-based care can broadly be defined as any movement away from the fee-for-service model to reward “value” and better patient outcomes. Models can be designed to reduce cost, improve quality, transform practices (e.g. implementation of an EMR or telemedicine solution), etc.
Providers will fare better or worse, depending on the value-based program model they are in. Risk-based, percent of premium, for capitation, models may be more attractive to providers as premium dollars will come in no matter what, whereas, an upside-only model will leave the outcome completely up in the air as it is tied to hitting quality targets.
43% of respondents said they were “not sure” as to whether value-based contracts prepared providers for the pandemic. The panelists believe this is indicative of the fact that value-based care is not well understood and argued that this murkiness is a major contributor to the reason our industry is not set up for success. Three factors for success emerged. First, alignment around what “value” means , second, trust between partners, and third, a transparent exchange of information at scale.
One panelist explained how they have a constant two-way transfer of data and information with their providers as part of their pre-existing value-based arrangements. This allowed them to respond to the COVID-19 surge more effectively than would otherwise have been possible. Unfortunately, we know this is not a reality for many payer and provider relationships. Often, transparency and coordination are lacking.We also heard that through some of the more advanced risk-based programs, providers are contractually obligated to set aside a portion of their upside dollars and save them in a reserve fund to cushion for downside risk. In these instances, it could be argued that some providers in value-based contracts were better positioned to whether this storm.
44% of the audience responded that health plans can best support providers during this emergency with “Funding,” and 41% believe it is by making “Policy changes.”
Unfortunately, most value-based contracts are based on pre-COVID-19 quality targets and financial thresholds. They do not have a pandemic-like event baked-in, and they do not account for telemedicine utilization. Since the COVID-19 crisis began, providers have been heads down, waiting for the curve to flatten and release some pressure so they can come up for air. As a result, health plans are leaning in to support providers in several ways, including providing leniency and exemptions to VBC contracts, suspending inpatient and post-acute prior authorizations, procuring personal protective equipment, ensuring hospital payments align with incoming claims, collaborating to share data, shrinking risk corridors, and more. While these support measures rely on existing capabilities, long-term assistance will require more innovative solutions.
For over a decade, the shift to value-based care arrangements has been rising, but much slower than many of its proponents would like. Today, ~25% of arrangements between health plans and providers are value-based (versus ~75% that are fee-for-service). 59% of the audience believes that COVID-19 will put greater tailwinds behind the adoption of value-based arrangements. The panelists agreed.
Today, while tensions rise between payers and providers, plans are also stepping in to do whatever it takes to keep their providers in business. Once the fog of the pandemic fades, providers will need to focus on revenue-building quickly. When value-based arrangements are implemented effectively, they give clinicians more time and incentive to focus on individual patients, while subjecting them to less financial fluctuation during emergencies like this one.
However, as one panelist noted: you cannot grow from 25% adoption to 75% unless barriers are removed and the right tools are in place. According to industry experts, less than 50% of providers of all types believe that value-based care can improve care and lower costs. Also, many clinicians view the administration of these arrangements as a top barrier to implementation. This makes transparency and education paramount to moving forward. The panelists believe that healthcare analytics are a critical piece to the puzzle. Analytics can demonstrate how value is better and provide transparent information so that both sides have equal visibility.
For many health plans, the days of reports, dashboards, and siloed data are in the rearview mirror. Nowadays, they require insights on-demand, which are actionable and useful—“tell me what is happening right now, what I can do about it, and what action to take tomorrow morning.”
We asked the audience to select one capability (from a list) that would be the most useful to them: 39% said forecasts of utilization trends, 28% said identification of highest risk patients/members, 21% said resource and capacity planning solutions, 9% said simulations to explore network design, and 6% said point-of-care triaging solutions.
What was loud and clear from the audience and panelists is that if our healthcare system is going to make a more rapid shift to value-based care, we need a sustainable way forward. While COVID-19 may provide a tailwind to propels us forward, achieving partnership and alignment between health plans and providers, along with putting the right risks and rewards in place, is what will create sustainability. A bright spot is the potential for healthcare data analytics to provide the transparency and actionability needed.
Value-based care requires collaboration and trust between payers and providers, particularly during such uncertain times when providers are hesitant to put capital at risk and hospitals are closing due to the current economic climate. While we are left with a lot of uncertainty, the pandemic has also been a wakeup call for payers and providers to do more with value-based care.
To watch the full event on-demand, click here.
For more information on analytics for health plans, health systems, physicians, and ACOs post-COVID-19, visit Clarify COVID-19 solutions page and request a demo.