While expanding access to VBC in primary care is indeed an important goal, we must keep in mind that the vast majority of healthcare expenses are in specialty care areas like oncology, where costs continue to rise without improved patient outcomes.
There is increasing consensus that value-based care (VBC) holds multi-dimensional promise to improve care delivery, reduce costs, and increase physician satisfaction. In primary care, for example, CenterWell – the largest provider of senior primary care – has achievedsignificantly improved health and cost outcomes with a patient-centered VBC approach. It’s good news, and there is no lack of desire from providers and payers to lean in.
But when it comes to actually setting up and managing VBC programs, it is a case of “easier said than done.” Few medical practices possess the resources and expertise needed to bear the complex suite of responsibilities that VBC demands. Meanwhile, payers have difficulty analyzing performance and contracting across various providers, which makes establishing uniform, predictable, and successful VBC outcomes incredibly challenging.
Subsequently, VBC contracts are notoriously difficult to create, implement, and support for all parties involved. And while that is certainly true in primary care, it is even more acute in specialty care. To understand why, consider some of the challenges that value-based care implies:
Risk management – VBC arrangements often involve shared risk between payers and providers, where financial outcomes are tied to achieving beneficial health outcomes plus cost savings. Managing this financial risk effectively requires sophisticated, fit-to-purpose actuarial capabilities and risk assessment technology, which very few practices and payers possess.
Data sufficiency – Just as 1,000 flips of a coin provides greater statistical accuracy than one flip, the larger a volume of data payers and practices have, the more accurately they can assess and benchmark provider performance, costs, and patient health outcomes. But few practices have a sufficiently large patient pool under one payer to do this, and even large national payers struggle to amass data sets large enough in the specialty space to drive adequate statistical probability. Neither payers nor providers typically have the robust data analytics capabilities needed to create reliable, long-term VBC models.
Operational burden – Moving from a fee-for-service reimbursement model to a value-based care model is a fundamental shift that requires comprehensive changes in patient engagement, care coordination, technology, billing, and revenue collection. Implementing these changes is complex, costly, and time-consuming for providers.