Connections Between Quality Care Analytics and Value-Based Care

Blog Posts  |  24 October 2022

Written by: Cheryl Reifsnyder, PhD

In recent years, healthcare providers (HCPs) were generally reimbursed under the “fee-for-service” (FFS) payment approach. In the FFS approach, HCPs were compensated based on the quantity of services they provided, not the quality of those services. Compensations were also allocated for each service individually. This incentivized HCPs to provide a greater number of services per patient as well as to order more tests and procedures per patient. The focus on volume rather than value of care contributed to ballooning healthcare costs in the U.S.—and those increased costs were not always associated with improved healthcare outcomes for the patients.

Today, however, HCPs are being held more accountable for ensuring quality of care AND controlling costs. Value-Based Payment models were introduced to help incentivize performance around health outcomes and costs related to healthcare utilization.

To help manage the paradigm shift from “fee-for-service” to value-based care, Alternative Payment Models (APMs) have been constructed to encourage HCPs to engage in process improvement and care redesign efforts to provide higher quality and more efficient care. Value-based care models help align with the Institute for Healthcare Improvement’s (IHI) triple aim initiative:

  • Providing better care for individual patients;
  • Improving population health management strategies; and
  • Reducing overall healthcare costs.

The Centers for Medicare & Medicaid Services has introduced multiple value-based models to help change how HCPs are reimbursed, such as the Medicare Shared Savings Program, ACO Reach, the Hospital-Acquired Condition Reduction Program (HACRP), and Kidney Care Choices (KCC). These programs were introduced with the dual goals of decreasing healthcare costs and improving patient healthcare outcomes.

Many private payers are following their example by adopting similar models of value-based care to use with their patients and HCPs. Evidence shows that doing so has successfully reduced medical costs. For instance, a 2019 study in Massachusetts examined changes in health care spending, utilization, and quality during eight (8) years of the Alternative Quality Contract (ACQ) of Blue Cross Blue Shield in Massachusetts. (ACQ is a payment model that includes financial rewards and penalties to incentivize providers to stay within spending targets for their patients.) During the 8-year period after AQC’s initiation, the increase in average annual medical spending for claims was $461 lower for enrollees in AQC organizations than the increase in spending for enrollees in control states—a relative savings of 11.7%.

How does value-based care benefit payers?

Proactive Approach

Improved value-based care models focus on incentivizing HCPs to concentrate on the quality of services they provide rather than the quantity—thus, making the approach to healthcare proactive rather than reactive, so problems can be prevented before they begin. Better healthcare outcomes are dependent on overall wellness, quality of care, and preventive screenings. As a result, value-based care improves healthcare outcomes.

Continuity of Care

Value-based care also has a direct effect on healthcare costs by leveraging interoperable data sources to improve communication among patients’ teams of caregivers. This improved communication results in fewer patient readmissions, less frequent hospitalizations, and fewer trips to the emergency room. Interoperable data sources also help to eliminate repetitive and unnecessary tests and procedures by consolidating the patient’s records in a single location.

Fewer Claims→Decreased Premiums

Value-based care reduces initial spending by decreasing the quantity of services provided to patients but decreasing healthcare costs helps payers indirectly as well. That’s because value-based care also results in a healthier patient population. By improving patients’ healthcare outcomes, value-based care reduces the disease progression that often drives the need for additional care. Overall, a healthier patient population will have fewer claims. Fewer claims translate into a decreased drain on the payers’ premium pools.

How do payers optimize their value-based contracts and programs?

Successful value-based payment models operate under a completely different set of principles than standard FFS. Payers and providers can no longer pursue purely adversarial positions in which providers focus on maximizing the number of services delivered and payers focus on minimizing the price paid for those units of service. Instead, a successful value-based payment model requires collaboration between payers and providers.

Successful collaboration between payers and providers requires a great deal of data.

That’s why payers require sophisticated and actionable analytics for the success of their value-based care initiatives. Robust analytics provide actionable insights that can help monitor the Key Performance Indicators (KPIs) that influence the utilization and costs associated with delivery of your value-based contracts. For instance, evaluation of these value analytics can assist payers in identifying targets for improvement in areas such as:

  • Hospital readmissions
  • Patient adverse events
  • Patient engagement
  • Population health

The Veradigm Value-Based Analytics solution

The Veradigm Value-Based Analytics solution is a solution that provides analytics and insights to identify targets for improvement for value-based contracts and programs. It provides data that empowers clients to take actions both to generate better healthcare for patients and to improve financial outcomes.

For instance, the Veradigm Value-Based Analytics solution enables you to track things such as emergency department usage, inpatient treatments, and patient readmissions after treatment. This information empowers you to optimize your existing value-based contracts and programs with actions such as:

  • Reducing inappropriate Emergency Department utilization
  • Improving 30-day unplanned readmission rates
  • Decreasing patients’ cost-of-care
  • Identifying Social Determinant of Health (SDOH) risks for existing patients
  • Minimizing revenue leakage caused by services referred out-of-network

The solution’s value analytics enable you to make adjustments that improve the financial management of current value-based care programs, as well as help you improve your value-based care contract and network program design in the future.

Contact us to learn more about Veradigm’s Value-Based Analytics solution and how it can help you optimize your value-based care programs.  

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