Report Looks at 15 Key Levers Driving Value-Based Care Success

Oct. 2, 2020
The trend of tying healthcare payments to value will only increase in a post-pandemic world, researchers believe

A new value-based care research guide released by Silicon Valley-based healthcare technology company Innovaccer highlights the focused approach to succeeding in a value-based care ecosystem for post-COVID19 healthcare.

For the guide, company leaders conceptualized 15 value-based levers that identify the priority areas for a healthcare organization to succeed on their journeys in the new normal. These levers address six primary dimensions for managing overall healthcare costs: cost and utilization, network, contract, quality, risk, and attribution mix.

The creators of the report, David Nace, M.D., chief medical officer at Innovaccer, and Kanav Hasija, co-founder and chief customer officer at the company, provided some important background, noting a Health Care Payment Learning and Action Network (HCP-LAN) finding that approximately 34 percent of all healthcare payments made in 2017—representing approximately 226.3 million Americans and 77 percent of the covered population—were tied to an alternative payment model (APM) with shared savings, shared risk, bundled payments, or population-based payments. This trend is only going to increase in the post-pandemic world, they stated.

Based on an analysis and review of several healthcare organizations and the factors affecting their performance, the authors identified 15 key levers driving the overall population health management strategy for an organization. They are as follows:

Reducing 30-day readmissions: The report states that the 30-day readmission rate is a classic cost-containment lever that targets growing inpatient spend. Most readmission rates are in the high teens or greater ( 15–19 percent). Many accountable care organizations (ACOs) strive to drive this towards a figure in the lower teens, with the lowest 2017 Medicare Shared Savings Program (MSSP) readmission rate hovering around 10 percent.

Reducing SNF costs: Most ACOs are primarily focused on moving SNF admits to lower intensity of care sites such as home care, according to the report. SNF costs generally average between $10–14,000 per admission compared to home healthcare at $3,000.

Reducing ED visits: Given the critical conditions that are treated in an ED, the cost of visiting one can be exceptionally high, the authors noted. Lack of awareness, variable care quality, communication lags, and missing information can lead to unnecessary duplication of care that can lead to high costs.

Managing referral patterns: The researchers state that coordinating care among in-service and out-of-network providers can prove difficult and time-consuming. Preventing patient “leakage” out of their network requires data, analytics, and insight that can help health systems in three main areas: patient retention, network optimization, and network growth planning.

Preventing unnecessary tests: The authors believe there should be a centralized data repository updated in real-time for all patients. This way, examinations and diagnoses are tracked, and duplication of high-cost tests can be prevented.

Increasing generic drug use: In a few studies of Medicare Advantage (MA) plans, the researchers found out that physicians have the power to reduce up to 10 percent of pharmacy expenses by prescribing less costly alternative medication equivalents. Using Walter Kluwer's data, they further realized that only 20 to 30 percent of the potential savings can be realized from branded drugs and the remainder from generic equivalents.

Increasing medication adherence: The report informed that about $300 billion of preventable healthcare costs can be attributed to medication non-adherence. This represents up to 10 percent of total healthcare costs.

Reducing network leakage: Network leakage for ACOs occurs when its attributed patients are visiting practices or institutions not owned by or contracted with the ACO. To provide integrated care across the continuum, healthcare organizations need to ensure that patients have maximum access to all levels of care services without going out of network. Most organizations lose about $200 to $500 million per year due to network leakage, much of which is potentially avoidable, the authors contended.

Renegotiating contracts: A critical but often overlooked aspect of value-based care opportunities starts with contract negotiation, which includes setting realistic cost benchmarks and negotiating favorable contract terms, the report said.

Improving quality measures: Quality measures assess care across the full continuum of healthcare delivery, from the level of individual physicians all the way to health insurance plans. Hundreds of quality measure variables are used for tracking quality performance in value-based care arrangements.

Improving coding accuracy: Payers rely on clinical documentation and accurate coding to justify value-based reimbursement based on recorded patient risk. The researchers believe that proper documentation leads to improved patient-provider relationships within and outside of the healthcare system.

Retaining low-risk members: The report describes this as monitoring members who are not high utilizers for network retention and optimization and endeavoring to create value by meeting their needs and improving their health outcomes.

Managing chronic conditions: This includes proper medication management, communication with the patient or other physicians to coordinate care, devising care plans, and assisting physicians and care teams with around-the-clock services, the authors explained.

Optimizing risk portfolios: With the estimation of future risk scores, healthcare providers can gauge the likelihood of outcomes such as the number of hospital admissions, emergency department visits, and other factors, the researchers said.

Addressing social determinants of health (SDOH): The authors contend that the CDC’s algorithm to estimate the Social Vulnerability Index (SVI) for every census tract in the U.S. is based on a simple summation of the percentile ranks for all SDOHs, which results in an overestimation of social vulnerability in cases of high positive correlation between multiple SDOHs.

The report concluded, “Value-based care is not guesswork. In the post-pandemic world, we need to focus more on driving value in the way we deliver care…To become successful in VBC, it is imperative that organizations begin to tackle their most significant value levers with a systematic and laser-focused approach.”