Reward structures in value-based care are designed to incentivize outcomes, potentially reaching up to 100%. For example, one significant challenge is accessing data from payers to identify patients with open care gaps, such as uncontrolled hemoglobin A1c levels or hypertension. To address this, we’ve implemented a website where physicians can easily track remaining incentives tied to closing these gaps. The focus is always on patient outcomes—uncontrolled hypertension can lead to strokes, and poor A1c management contributes to kidney failure and vision loss. By eliminating administrative burdens, we empower clinicians to do the right thing for their patients while focusing on closing care gaps effectively.

Advocate Health has seen significant success transitioning to value-based care. Key to this success is understanding the essential factors for managing total cost of care, which include both basic and advanced elements. At the foundational level, transitioning from fee-for-service to value-based care requires addressing resource limitations, particularly for small practices with fewer than five physicians. Infrastructure costs, often a barrier, must be funded upfront to ensure success. Without this investment, practices are unlikely to engage fully in value-based care, especially when financial rewards may not materialize for 18 months. Moreover, providers must consider baseline spending to identify realistic opportunities for improvement, as well as risk mitigation measures like reinsurance to prevent financial losses.

As practices advance in value-based care, flexibility becomes critical. Models like REACH offer varying levels of risk—50% professional, 100% global—enabling practices to choose what suits them best. Accurate risk adjustment is also essential. Current systems, such as hierarchical condition categories (HCCs), often fall short, especially for conditions like skilled nursing utilization. Addressing these gaps requires more sophisticated tools, including artificial intelligence, which can integrate social determinants of health and provide better insights into patient care needs. Furthermore, including hospitals and other providers across the care continuum ensures seamless patient care and minimizes the risks of fragmented solutions.

Drug costs also play a pivotal role in value-based care. For specialists primarily operating in fee-for-service models, payment sophistication is a growing challenge, especially when patients are attributed to multiple providers. For example, chronic kidney disease patients may be shifted from one program to another, fragmenting care and inflating costs. Advocate Health addresses these issues by supporting integrated models that nest episodes, procedure bundles, and longitudinal per-member-per-month arrangements to streamline care and ensure fair attribution.

Looking ahead, value-based care is essential for improving the U.S. healthcare system, but current models need refinement. While global capitation and risk-based models are often seen as the future, many payers lack the infrastructure to manage these models effectively. Building trust between payers and providers is critical to creating sustainable solutions. As we integrate innovative tools and collaborative approaches, we’re committed to creating a value-based care system that meets the needs of both patients and providers.

Key Takeaways:

• Value-Based Care is Here to Stay: While the models are still evolving, transitioning from fee-for-service to value-based care is essential for improving patient outcomes and controlling healthcare costs.
• Infrastructure and Risk Adjustment are Critical: Successful implementation of value-based care requires adequate infrastructure and effective risk adjustment to ensure that care providers are rewarded fairly for managing complex patient populations.
• Collaboration and Trust Between Payers and Providers is Key: Building a transparent, trust-based relationship between payers and providers will be crucial to the future success of value-based care models, ensuring alignment on goals and patient outcomes.

Quote:

“If you want to succeed in value-based care, it cannot be a side hustle. It has to be something that you’re serious about. You have to invest in it.”  – Don Calcagno, SVP, Chief Population Health Officer at Advocate Health