Value Proposition: The Building Blocks Needed To Transition To New Care Models

The transition to value-based care (VBC) is not an easy one. It will take time to achieve, and its success will depend a great deal on organizations’ willingness to take on increasing risk and set up the necessary infrastructure and components to support it.

Most recently, the finalization of MACRA (Medicare Access and CHIP Reauthorization Act of 2015) has created additional programs and instruments to achieve VBC, while building on previous programs. MACRA will utilize a framework called the Quality Payment Program which is broken down into two paths: Advance Alternative payment models (APMs) and Merit-Based Incentive Payment System (MIPS). Each is intended to accommodate a broad scope of organizations and physicians depending upon their various state of readiness and ability to move to a more value based environment. Additional information can be found at www.cms.gov.

Most organizations are preparing for the transition by participating at some level. There are several programs spanning the continuum of risk that can be utilized, with the key drivers being maturity and ability to assume risk.

• Accountable Care Organizations: ACOs allow organizations and groups of physicians to form an entity that will help focus on improving the quality of care delivered to patients. Governed through CMS, they offer several tracks with increasing amount of risk to be taken on by the entity. Many utilize a track one Medicare Care Shared Savings Program (MSSP) which has no downside risk — only the potential for share savings. This approach allows the organization to create the necessary structure and processes associated with moving from volume to value without any risk. ACOs that are more advanced and have been participating successfully in track one may decide to move to another track with increasing risk, for example track 3 or the Next Generation ACO. To date, however, the vast majority (95 percent) of hospital and physician groups in an ACO remain in track one.
• Bundled Payments: These programs ‘bundle’ a service together where the reimbursements are set for the entire continuum of treatment, with the most prevalent being the Comprehensive Joint Replacement. For some the program is voluntary; however, many states are required to participate. This program and other bundle programs offer organizations the ability to manage both the care and the cost of those patients through a specified period, with the goal of improving outcomes while reducing the cost of care.
• Medicaid ACOs: With a similar construct to the Medicare ACO, Medicaid ACOs present other opportunities for organizations to manage a specific population. Massachusetts is piloting a Medicaid ACO; initially with a limited deployment but with plans to expand over the next few years to a broader population and geographic area.
• Patient Center Medical Home (PCMH): PCMHs focus on primary care that is patient-centered, comprehensive, team-based, coordinated, accessible, and focused on quality and safety. It’s not a location, but rather a partnership with the patient and their primary care physician.
• Self-Insureds: Management of an organization’s self-insured population represents a low risk approach to improving the quality of care while managing the cost. For entities that have the ability, this program often creates a glide-path to creating a Direct to Employer strategy. Once an entity establishes a proven track record for management and network strength, it can become a value proposition to area employers.
• Medicare Advantage plans: These plans are focused on enhancing the quality of care delivery while controlling and managing costs and offering additional benefits to plan members to help them remain healthy.

Given the complexity, number of programs, and regulatory nature of these programs, creating a strategy over a multi-year period is critical. Organizations often do not take the time to go through this critical exercise. Understanding organizational readiness, current programs in place (like an ACO), other strategic initiatives, and network alignment and strength all help formulate a comprehensive strategy that is achievable and able to be executed. The strategy must be driven from the senior members of an organization, and it must permeate throughout so alignment and engagement is achieved. The transition to value based care is complex; without this strategy and alignment, it can result in fragmentation, and worse, diminished quality of care and impact to reimbursements.

As a starting point, organizations should have a sound infrastructure, foundation, and guiding principles that, when coupled with the strategy, help ensure success. Those guiding principles include the following:

1. Technology: While true interoperability has not been achieved, it has vastly improved. Ensuring that data access and timely delivery is available to caregivers is critical to achieving VBC. Integrating claims, clinical data, and other data sources is critical. Telehealth strategies that align physicians with patients enhance the care delivery and help avoid unnecessary costs.
2. Care Management: Comprehensive Care Management programs can deliver and manage the care necessary to the populations at risk, especially those with at high risk or rising risk. Having a robust, post-acute care network and process is critical.
3. Data and Analytics: Robust information, data analytics, and predictive analysis are all necessary so that providers can understand which patients are likely to become sick and need care.
4. Network strength: Strength of the network and the alignment of physician incentives are crucial in helping with the transition.

The journey is a long one and there are many ways to get there and to engage with this process. And while no one path will be identical, for certain all must contain a vision and a plan to achieve the outcome.