Will 2023 Be the Year That You Fully Embrace Value-Based Care?
For some, value-based care (VBC) is just a trendy term that replaces other expressions that have come before it (e.g., population health, accountable care, managed care). It often connotes a payer contracting strategy that involves some degree of risk sharing and quality reporting, but for those providers who fully embrace it, it's much more. VBC is a vital part of addressing the challenges the healthcare marketplace faces, and 2022 only reinforced what challenges lie ahead.
Why VBC Is Important in 2023
Payers want greater provider accountability. The largest payer in the country, CMS, is committed to moving payment mechanisms to accountable care models — either those in traditional Medicare or Medicare Advantage. Many other payers are limiting fee increases and requiring providers to “earn” their value. This shows that these models are not going away. Instead, they will continue to evolve, requiring greater risk-taking and more meaningful impact on affordability, health outcomes and access over time.
Supporting lasting and impactful care redesign. True VBC involves care redesign to ensure that each individual's health status and social determinants are addressed. Care models that successfully improve health, affordability and access must also address health equity to sustain a positive impact throughout the community. Many providers have initiatives to improve access, quality, affordability and equity, but in many cases, they are pursued independently. A robust approach to VBC fosters the ability to design care delivery models that consider these components simultaneously — minimizing duplicative or conflicting efforts and organizational resources. Further, VBC should provide the financial incentives that reinforce the sustainability and continual innovation of person-centered care.
Address financial challenges holistically. The financial realities of healthcare delivery are continuously challenging: staffing shortages and rapidly increasing labor costs; inflationary pressures; supply chain delays on supplies and construction; resistance from payers to increase payments to adequately cover the rate of inflation — the list goes on. Pursued holistically, VBC provides incentives and rewards for designing models that are not only more professionally rewarding for care team members, but also utilize resources more efficiently and still address the challenge of affordability. VBC strategies must be a cornerstone of a financial plan and designed to address the financial challenges head-on rather than as a component focused on payer relationships alone.
Align care teams across the continuum. For many health systems, building and maintaining an aligned physician network, integrating care across the continuum, and enhancing consumer loyalty are goals that are perpetually desired yet seemingly unattainable. VBC requires engaged and inspired clinical leadership and care teams that can reposition hospital-physician relationships to focus on common objectives; however, it can also drive a wedge between them if financial incentives and market strategies are not aligned. Therefore, building the financial and organizational leadership structures that facilitate a common understanding and agreement on goals and expectations is key.
Also critical is balancing the focus across all venues of care: acute, outpatient, post-acute and home-based care. Too often, VBC is viewed from either an acute care lens (hospital) or an outpatient lens (physician), and as a result, the financial incentives, care model and patient relationships are disjointed and ineffective. With a focus on creating a lasting relationship with consumers, VBC can foster more seamless care delivery, affordability and alignment between the care providers, as well as a better experience for patients.
Optimize use of limited resources. Capacity and resource constraints are an unending challenge. It doesn't matter if those constraints fall under clinician and support staffing, demands for critical care beds or ED care, or just about any aspect of care delivery — creating a balance between demand for services and available resources is increasingly difficult. The goals of VBC are aligned with many of the strategies intended to achieve that balance. Reducing unnecessary admissions and ED utilization, managing clinical team members at the top of their license, facilitating care management to achieve efficient transitions of care, and optimizing virtual care are all outcomes achieved by organizations devoted to VBC. While VBC doesn't directly solve the peaks and valleys of demand on healthcare resources, it does galvanize teams to achieve results that address resource constraints.Embrace a value-based care philosophy. So why isn't everyone actively approaching the persistent challenges of healthcare delivery through a value-based care lens? Because a value-based care approach isn't a panacea — it still involves challenges: many payers don't embrace sharing risk with meaningful rewards; actionable integrated clinical and financial analytics across the care continuum is still hard to come by; most revenue sources are still largely fee-for-service; and some organizations are simply too stressed to contemplate a major shift in orientation. Additionally, rural markets have their unique challenges, as do large urban academic medical centers, not to mention everything in between.
However, despite the fact that 2022 presented a number of challenges that are likely to persist, it also provided clarity on what is ahead for the healthcare industry. As your organization faces these challenges in 2023, think about solutions that embrace a value-based care philosophy (beyond payer contracting) as a New Year's resolution.