The Many Dimensions of Value-Based Care
Value-based care aims to improve the quality and outcome for patients by linking provider reimbursement to the quality of care provided. Under this system, providers are rewarded for helping patients achieve higher quality outcomes and thus lead healthier lives while reducing medical costs.
However, when we talk about value-based care in the healthcare payer industry, there isn’t just one dimension to consider - there are many. It can mean disease management or compliance programs. It can mean programs that incentivize members with diabetes or heart conditions with waived office visit copays or gift cards. It can mean value-based reimbursement where providers are scored on analytics and capitated or paid on fee for services at higher versus lower rates depending on quality of care delivered. Or it could be value-based referrals, where health plans refer patients based on the provider’s quality of care delivered. The point is, value-based care can mean different things depending on who you’re talking to, what area of the industry they work in, the role they play, and the part of the health plan they represent.
These are the value-based care trends we’re seeing in 2022:
1. Value-Based Referral Programs: How is this provider performing?
As part of the Value Based care model being created, Humana has added the analytical aspect to track performance of the provider quality of care being delivered. Higher quality of care showing reduced recurring costs identifies these providers as high quality. Which translates to more referrals for higher quality providers and lower performance means less referrals over time until quality is improved.
This underscores the importance of analytics and advanced analytics enabled by artificial intelligence. Concepts such as data clustering or data labeling enables the business to define the criteria for these providers and the patients’ health overall based on claims volumes, costs, diagnosis, etc. The population can be looked at retrospectively and using predictive analytics trend the future for the health plan to help steer the ship of the enterprise. The result is the health plan is now empowered with the transparency to understand who their top performing providers and members are and to decide how to incentivize those constituents.
2. Provider payment & value-based care: capitation arrangements versus fee-for-service
Provider performance is also being linked to capitation arrangements. Instead of having a fee-for-service approach, it’s taking the capitation arrangement approach and paying different capitation rates based on the quality of care that’s being delivered. One of the key business problems for a majority of the provider community is increasing revenue over time. In traditional for-fee-service arrangements, providers are paid per visit. They can see more patients and make more money based on volume, but that’s the complete opposite of the goal of value-based care and the adverse effect resulting in over utilization. The true goal of value-based care is increasing healthier populations through the quality of care delivered - which for health plans means a healthier risk-pool overall which translates directly to reduced PMPM costs.
COVID also raised a real challenge to providers that were predominantly working on fee-for-service arrangements. Initially patients had been avoiding the doctor for minor ailments, annual visits, or preventive care during the pandemic for fear of contracting COVID. In 2021, the AMA noted significant decreases in specialist spending noting drops of the hardest hit Physical Therapy (-28%) among others. As a result, providers working on the fee-for-service type of reimbursement - where volume equals payment - have been struggling with the lack of patients. Capitated arrangements therefore really helped some physicians from having to close doors to their practices which has a direct impact on the patients that rely on them for care.
3. Medicaid & Value-Based Reimbursement
If we think of value-based reimbursement from a fee-for-service perspective, that's also something that we've seen in Medicaid for example. Where providers are being reimbursed at a higher level versus a lower level based on the quality of care that's being delivered. Being scored by the state based on performance, sending that score to the health plan administering that contract and paying at higher reimbursement rates for better performance is just another example or dimension of how we are seeing value-based care in the industry and provider payment practices.
HealthEdge: Enabling Value-Based Care
With all these different dimensions and players in the game. How does HealthEdge, or any software solution, enable value-based care for their customer?
1. Defining Quality of care: Quality of care is paramount and how it is enabled is a driving factor in value-based care. Disease management, compliance, quality of care referrals, and capitation rates all hinge on real-time, accurate data. Additionally, that data is used in the process of defining the quality of care metrics needed to identify top versus lower performing provider and member constituents.
2. Accurate, real-time data: Data becomes imperative to drive all of this. Data is the means to identify the metrics that health plans use to define their entire business landscape. In this case, a top performing or low performing provider is one small but powerful example. HealthRules® Payor enables our customers through the real-time data warehouse to critical insights that can be gained for membership, providers, billing, claims, benefits, contracts and much more. Empowering the business user to define their landscape as it relates to the specific dimension that relates to their role in health plan operations or the enterprise at large.
3. Benefits, Pricing, Capitation, Health Incentives: HealthRules Payor supports these areas from the core system in a variety of manners, mostly stemming from configurability. The HealthRules Language configurability is unmatched in the industry and automates benefits, pricing, and capitation in order to reduce customization costs that customers incur to meet their business demands. One of the many aspects of the HealthRules Language is it allows the business user to directly interact with their own user-defined terms in addition to 100+ first class system fields to create benefit and pricing rules that drive claims payments without the need to proliferate benefit plans. Additionally, User Defined Terms drive Premium Billing and Capitation rates providing the key to user empowered automation. That configurability and the automation that's produced out of that is enabling our customers to develop these evolving pricing, benefit payment, and compliance program/health incentive models without creating custom code or requiring heavy IT support. We enable our customers through configurability of the system.
4. Health Incentive Programs: HealthRules Payor also provides Compliance Programs to automate the results of the benefit or pricing based on the members status in the compliance program. The business is enabled to configure the applicable compliance for health issues like Asthma, Diabetes, Heart Disease, Smoking Cessation, Weight Loss, or Wellness as examples of what could be needed. The nice features layered around the configuration is the ability to set automated reprocessing of claims based on retroactive changes in the compliance status of the member and automatically identify the claims impacts associated with these changes and provide the claims examiners the ability to review the financial impacts prior to impacting payments and approve or reject these adjustments based on their business processes.
HealthEdge MVP Value-based Care Ecosystem
HealthEdge is enabling our customers through a best-in-class, MVP ecosystem for value-based care. Our accurate, real-time data warehouse powers determining compliance, provider quality level, reimbursement level, capitation versus fee-for-service, and more.
Our best-in-class products, HealthRules Payor, GuidingCare, Source, and Wellframe solutions enable our customers to achieve better outcomes that are critical for value-based care.
Contact us to learn more about HealthEdge and value-based care.
About the Author
Dustin Rojas, Senior Director of Sales Engineering and Strategy, HealthEdge