Payers and providers are both highly motivated to keep their members and patients healthy, but amid numerous challenges—not the least of which was the major disruption to primary care caused by the COVID-19 pandemic—adoption of value-based payment arrangements to promote better care continues to be more of a trickle than a flood. According to a 2020 Deloitte Insights study, 97% of physicians rely on fee-for-service payments or salary, while only 36% draw some form of compensation from value-based payments. Also troubling: the same study found that less than half of respondents (46%) follow the clinical pathways adopted by their organization.
The COVID-19 pandemic led to a 32% average drop in revenue for physician practices as primary care visits plummeted, according to an AMA survey of 3,500 providers. Therefore, while the pandemic’s short-term challenges may have stalled adoption of value-based partnerships, now is an ideal time for payers to make the case to their provider networks that such arrangements will benefit them significantly in the long term while improving outcomes for their patients.
To accomplish this successfully, payers must target four major barriers that stand in the way of value-based care success.
Problem 1: Poor transparency into formulas and metrics
To be motivated to enter value-based arrangements, providers want to know what’s “behind the curtain” when it comes to determining how they will be compensated. For example, which quality measures will you use? How much weight will patient surveys carry? To be successful, offer extensive documentation into your methodologies and how value scores influence compensation. It also helps to rely on widely accepted methodologies for what separates high value from low value care, such as the Choose Wisely initiative, to give one example. One major payer in North Carolina has found success using a tiering methodology based on quality, cost, and Cotiviti’s Network Intelligence benchmarks—and as of December 2020, the plan achieved more than 50% membership in value-based care arrangements.
Problem 2: Inconsistent alignment with physicians
Payers and providers must be on the same page from the very beginning when embarking on a value-based care partnership. Start by establishing a shared purpose and unified message with providers around low-value care. Find your provider “champions” early in the process and work with them to conduct provider engagement workgroups where they take the lead role in cascading initiatives to other providers. “Typically, when we identify a specialty that we want to tier, we create an advisory group of six to eight physicians in that specialty,” explained the lead medical director of quality programs for the North Carolina plan. “We explain the history of why we’re tiering provider specialties, and more importantly, try to get their ideas and thoughts and input on the measures being used.”
Problem 3: Lack of actionable insights for motivating change
Providers can’t change their practice patterns if you don’t point them toward exactly what needs to change. For example, does the problem lie with overprescribing, or are they performing too many non-valuable procedures? To overcome this problem, offer provider scorecards at both the group and unique provider levels related to overall value, patient visits, procedures, pharmacy, and referrals. Rather than simply give them a static scorecard, offer easy-to-use data visualization tools that demonstrate where providers stand in relation to peers. Florida Blue Medicare has found that breaking the data down both by practice and by geography is particularly impactful. “It's important to always remember that it’s rare to find a situation where a doctor is at the red (low-value) end of the spectrum,” explains Dr. Paul Kaplan, senior medical director. “It's never going to happen that the doctor is inefficient at everything, but to be able to point to what it is that they have as an area for opportunity and improvement is very important.”
Problem 4: Suboptimal coordination between stakeholders
Once your program is up and running, communication and education must never stop. Beyond provider scorecards and visualizations, prepare detailed analyses for each of your provider groups and present them to their leadership regularly. As Dr. Kaplan of Florida Blue Medicare explained, “the CMO can begin to see how each doctor is behaving relative to their peers in the same group. It makes the doctors eager to know what to do next, how to best use this data to be actionable, to be more involved in the way they deliver healthcare and improve the bottom line of their finances as a medical group.”
2021 is an optimal time to align with providers who may have previously been hesitant to support alternative payment models, as so many physicians in traditional fee-for-service arrangements have faced substantial declines as a result of the pandemic’s impact on patient volume. With the right framework in place based on transparency, alignment, and actionable data, payers can successfully bring their provider networks on board and improve results across their payment, quality, and risk-based initiatives.