The promise of producing better patient and population outcomes while reducing healthcare costs continues to drive the adoption of value-based care (VBC) by providers and payers. VBC contracts are projected to cover nearly 65 million Americans by 2025, according to a data analysis by McKinsey. The research firm expects the percentage of the insured population covered under VBC contracts and networks to grow to 22% by 2025, up from 15% in 2022.
But the transition from a volume-based transactional billing model to one that incorporates financial risk tied to the patient’s health outcome is not an easy one. Successful implementation of value-based programs is impossible without effective Value-based Administration (VBA).
VBA requires technology that provides complex hierarchy support for onboarding, data capture, digitization, and data exchange among a network of participants. Such technology also must be able to support specific use cases, such as social determinants of health (SDoH), value-based payments, quality reporting and others.
A network of networks
A VBC network consists of the providers, facilities, suppliers, and organizations that a health insurer or risk-bearer has contracted with to deliver healthcare services to patients. Such a network involves complex many-to-many relationships in which an entity in one network is engaged in several networks with different contractual engagements with other entities. A network of networks is possible only with an infrastructure that supports the complex hierarchies between these entities and upstream/downstream data sharing.
Critically, a VBC network must be capable of accommodating a large variety of evolving payment methodologies that fall under the VBC label, each of which may have different incentives, performance metrics and payouts. Examples include shared risk arrangements – such as accountable care organizations (ACOs), bundled payment programs, and the Medicare Shared Savings Program (MSSP) – with upside and downside risk. Without VBA to ensure participants get paid, a VBC network is unsustainable.
It is essential that VBC networks integrate nonmedical and community-based organizations (CBOs) that can share SDoH and other data, offer services and coordinate care. One of the biggest challenges in this regard is that many CBOs are chronically underfunded and have invested little in digital technology, making onboarding and data exchange difficult.
The digital limitations of CBOs aren’t the only technology hurdle facing VBC networks. Existing legacy systems on both the payer and provider sides are not equipped to efficiently administer VBC programs at scale. Provider and payer digital infrastructures lack the ability to manage a complex care network involving multiple stakeholders in multiple roles while fulfilling the requirements of rapidly evolving value-based payment models.
Though many healthcare stakeholders do rely on data analytics and digital tools to manage networks and coordinate care, these typically are point solutions that can’t scale and inevitably create data silos. Inability to share data across a VBC network results in poorer clinical outcomes and increased costs. Yet healthcare stakeholders have invested heavily in legacy IT infrastructure and are understandably reluctant to rip and replace existing systems and workflows.
This is where Value-based Administration enters the picture. By implementing VBA, value-based networks can facilitate whole-person care through the simultaneous orchestration of medical and nonmedical care delivery and services in a way that improves patient outcomes and lowers healthcare costs. VBA is applicable across all care settings (traditional site-based, virtual, in the home and in the community) and processes, from data capture and data sharing through payment.
How VBA supports VBC networks
Successful VBA enables “many to many” sets of relationships between VBC stakeholders as well as all the attributes that come with them. These include information capture and sharing, essential B2B and B2C multichannel communications, and full execution of required financial arrangements for risk-bearing partners upstream and downstream. Among those partners may be health insurance carriers, risk-bearing entities (such as ACOs, clinically integrated networks, and carve-out programs from chronic disease management), primary care providers, care management programming and social services networks.
VBA also allows upstream capture of funds and downstream distribution to VBC network partners, along with simultaneous management of a wide range of disbursement models within the same network. Thus, VBA can transfer money to a home-dialysis provider upon receiving a post-visit status scoring report for a particular patient, while simultaneously paying a Meals on Wheels community provider upon receiving confirmation that this week’s meals were delivered.
VBC can transform healthcare through a whole-person, proactive approach that takes into consideration SDoH and leverages shared data and services provided by CBOs. To effectively implement VBC, however, it is essential that payers and providers effectively manage complex contractual relationships between network partners in a way that ensures all participants are reimbursed. VBA is key to fully realizing the full clinical and cost-savings benefits of value-based care.