Written by: Cheryl Reifsnyder, PhD and Katie Wilson
Payers face increasing pressure from rising healthcare costs in today’s healthcare environment. Factors such as the nation’s aging population and the high incidence of chronic disease contributes to increasing costs by driving up healthcare utilization. However, rising costs also stem from the traditional fee-for-service (FFS) payment model that, until recently, has been common in healthcare—because FFS incentivizes inefficient care.
Under FFS, physicians are reimbursed for the quantity of services provided rather than the quality of those services. FFS effectively incentivizes providers to increase the volume of services they deliver rather than focusing on the value of those services; FFS supplies no incentives to improve care quality or coordinate patient care. As a result, FFS often results in uncoordinated patient care, where patients receive services they don’t really need.
In 2010, the Affordable Care Act outlined a model to change healthcare reimbursement from its focus on volume to a focus on the value of care. This new healthcare payment model was termed value-based care, and it was introduced with the goal of improving the quality of patient care while managing costs.
Emphasis on value-based care has increased steadily since its introduction. Despite this, the change from FFS payment models has been slow. The American Medical Association reported FFS as the most prevalent payment method in 2020, with 88.1% of physicians reporting at least some FFS reimbursement. Deloitte’s National Physician Survey data also shows slow progress in developing capabilities essential for value-based care.
Payers’ long-term focus on managing risk and controlling healthcare costs aligns with value-based care’s goals of delivering high-quality, cost-effective care. Fortunately, payers are uniquely positioned to help drive value-based care and help providers deliver better patient outcomes. In this article, we’ll look at some of the tools and strategies payers can use to support a more widespread shift to value-based care.
Value-based care is a framework for providing healthcare that focuses on the quality of services delivered rather than the quantity of those services. Under value-based care, healthcare providers and organizations are compensated based on patient health outcomes. Clinicians are incentivized to take actions that promote better outcomes, such as reducing the chronic disease burden. Value-based care also has a greater focus on population health management as well as improving care quality for individuals.
Value-based care emphasizes a proactive approach to healthcare rather than reactive, working to prevent patients’ health problems before they begin. This focus on prevention means that value-based care helps cut healthcare costs by lowering the need for expensive medical tests and unnecessary procedures.
Value-based payment models focus on improving the overall quality of patient care and better managing healthcare costs. Providers and provider organizations are financially incentivized to keep their care quality high and costs low rather than simply increasing patient volumes. Value-based payment ties healthcare reimbursement to the value of care provided, where value is determined by the quality of care in relation to its cost. Successful delivery of high-value care depends on multiple factors, such as:
Value-based payment models provide financial incentives to provider organizations to encourage them to meet quality of care goals. In some cases, value-based payment models also offer incentives to encourage healthcare providers to focus on preventive care, which can help to reduce patients’ care costs.
Value-based care provides benefits to healthcare providers and payers as well as patients. Patients report higher levels of satisfaction under value-based care models. They are less likely to regret their treatment choices, less likely to undergo invasive procedures, and more likely to stick to their treatment plans. Value-based care often leads to better-informed patients with healthier life habits—and research at the Robert Wood Johnson Foundation shows that patients who are actively engaged in their healthcare are more likely to manage their health conditions and stay healthy than patients who lack these skills, who often require more healthcare interventions, resulting in higher costs.
Value-based care incentivizes improved continuity of patient care and generally results in fewer medical errors. With its focus on improved patient outcomes, value-based care also emphasizes preventive care and overall patient wellness. These factors combine to yield improved healthcare outcomes for patients.
Evidence shows that implementing value-based care models has also successfully reduced patients’ medical costs. One way it accomplishes this is by leveraging interoperable data sources to improve communication among members of patients’ healthcare teams. This, in turn, minimizes costs by resulting in less frequent hospitalizations, fewer readmissions, and fewer trips to the emergency room, as well as helping to minimize repetitive or unnecessary tests and procedures.
Payers are uniquely positioned to help drive value-based care and help their provider network to achieve better patient outcomes. One way to do this is by providing resources to support providers in their journey to adopt value-based care. For instance, payers might facilitate collaboration among providers in their network, enabling them to share best practices and learn from others’ experiences. Payers may offer training and education opportunities, helping network providers better understand value-based care models, care coordination techniques, quality improvement strategies, and other concepts critical to value-based care success.
Perhaps most importantly, though, payers have access to large amounts of data on patient care and outcomes, positioning them to promote data-driven, value-based care. By sharing relevant patient data with providers, payers can help them identify trends, care gaps, and opportunities for improvement. Payers can also share performance analytics to help clinicians understand their performance compared to national standards and benchmarks. Timely, detailed performance feedback can give providers actionable insights for their improvement while helping to build trust in value-based payer-provider partnerships.
Payers can empower providers with technological tools to facilitate their value-based care goals. Robust data aggregation tools collect information from diverse data sources, such as claims and EHR data sources, cleaning, enriching, and normalizing data to improve transparency between payers and providers. Aggregated data enables both payers and providers to view details of individual members’ healthcare experiences—information providers can use at the point of care to address gaps in care and improve quality outcomes.
Advanced analytics are essential for translating patient data into actionable insights to help improve patient care. With predictive analytics, providers can better identify high-risk patients, enabling delivery of early interventions and personalized care plans. Robust analytics solutions can also help payers and practices monitor Key Performance Indicators related to value-based contracts. They can provide data that can help payers identify areas for potential improvement, such as rates of patient adverse events, levels of patient engagement, or population health status.
Value-based software that directly integrates claims and clinical care data with advanced analytics can help providers streamline workflows and minimize administrative burdens. Suddenly, clinicians can access detailed analytics insights at the point of care within individual patients’ electronic medical records. Insights from these analytics allow care managers to target outreach to high-risk populations, improving care access and patient outcomes.
Integrating analytics with care management tools can also make it easier for payers to share key information with their providers, such as:
With the right value-based care-focused technology solutions, payers and providers can embrace a data-driven approach to align value-based objectives, helping them work together more effectively to enhance patient care while managing healthcare costs.
At Veradigm, we are committed to supporting both payers and healthcare providers as they navigate the shift to value-based care. In this vein, one powerful tool is the Veradigm Network, a dynamic, open community comprised of Veradigm’s internal solutions and external collaborators working together to provide advanced insights, technology, and data-driven solutions.
For instance, the Veradigm Network supports team-based care in multiple ways. Team-based care is an essential component of value-based care, allowing a patient’s clinical team to share patient data and coordinate care. The Veradigm Network supports team-based care by facilitating improved communication among caregiver teams, leveraging interoperable data sources to streamline the exchange of patient records, test results, and other data among team members. Improved communication can help to decrease hospitalizations, readmissions, and emergency room visits. Utilizing interoperable data sources enables clinicians to consolidate patient records, helping eliminate unnecessary tests and procedures.
Communication between care team members can be further streamlined by Veradigm eChart Courier™, an easy-to-use Veradigm solution that enables providers to share medical records in a secure, automated, and seamless fashion. Manual retrieval of patient records is time-consuming and resource-intensive; Veradigm eChart Courier replaces the inefficient manual processes currently used by most practices, helping increase efficiency, ensure security, and support value-based reimbursement by aiding data collection for relevant quality measures.
Another Veradigm Network solution, Veradigm RxTruePrice™, helps providers combat the growing epidemic of patient medication nonadherence. Recent research shows that 42% of Americans struggle to pay for their medication, even though 94% of those individuals had insurance of some kind. RxTruePrice gives clinicians a unique tool for improving patient medication adherence by providing prescription price transparency at the point of care, enabling providers to access discounted health plan or pharmacy benefit manager pricing, cash pricing, therapeutic alternatives, and competitive pricing at different pharmacies. All information is patient-specific and accessible from within the e-prescribing workflow.
With solutions such as Veradigm Payer Analytics, the Veradigm Network can deliver real-time analytics to help providers target patient interventions and preventive care more effectively. Veradigm Payer Analytics generates the real-time visibility practices need to monitor Key Performance Indicators associated with value-based care. By tracking data such as patient readmissions after treatment, usage of emergency services, and inpatient treatments, practices can identify the most effective strategies for improving patient health while lowering the overall cost of care.
Veradigm Payer Insights enhances value-based care by providing actionable insights through advanced data analytics. This innovative solution allows payers to deliver care gap alerts to their providers directly within their EHRs. These alerts include patient-specific considerations, enabling providers to identify and address care gaps and make data-driven solutions that improve patient care and optimize resource utilization. The solution also enhances healthcare organizations’ performance on key quality metrics, empowering their alignment with value-based reimbursement models. Veradigm Payer Insights’ comprehensive capabilities help providers to proactively manage patient populations, improve care coordination, and reduce costs, thereby supporting the overarching goals of value-based care.
Access to large amounts of patient information, in the form of claims and EHR data, uniquely positions payers to empower and encourage providers to transition to value-based care models, improving patient outcomes and care quality while controlling costs. With the right technology, you gain the ability to aggregate and share clean, normalized data with your provider team; by applying advanced analytics, you can furnish them with actionable insights. Integrating this data with providers’ care software can streamline their ability to access and use this information, helping them to improve patient outcomes and lower costs.
Veradigm Network solutions can help you help your providers improve their performance in value-based programs by offering assets to help improve patient engagement and patient health literacy, as well as real-time analytics to help target patient interventions and preventive care more effectively. Contact us today to learn how Veradigm can help you meet the challenges of shifting to value-based care—and realize the many benefits value-based care can provide to payers, providers, and, most importantly, the patients you serve.