Implementing value-based health care: Key trends shaping 2023

Employers and their benefits consultants are increasingly embracing value-based reimbursement models as they – along with provider organizations, commercial payers, and government programs – seek more ways to improve health outcomes while reducing costs.

A key success criteria of these value-based care (VBC) initiatives depends upon the technical infrastructure that is needed to support these programs.  These VBC networks should be able to:

• Enable modeling of contracts using a contract builder approach
• Enable reimbursement for participating organizations
• Digitize unstructured data
• Compile a 360-degree patient Longitudinal Health Care Record (LHR)
• Facilitate data sharing on a permissioned basis

There are several major trends impacting employers and benefits consultants implementing value-based programs.

Meeting patients’ needs

Care in traditional settings such as a doctor’s office or medical center will continue to shift to alternative delivery sites. These alternate sites for care delivery will include the home, retail environments, and other locations in the community. CVS, Kroger, Rite Aid, Walgreens, Walmart, and others will open more primary care sites in their stores. These retail-based care clinics now offer vaccinations; testing; screening for viruses, infections, and pregnancies; and treatment for minor illnesses, injuries, and skin conditions.

Further, the trend away from traditional care settings will enhance health equity by increasing access to care among vulnerable populations, such as the elderly, homebound, and patients living in remote areas. A New England Journal of Medicine survey of health leaders published in October showed that 67% of respondents said that availability of retail health clinics has increased access for these groups of patients.

More employer direct contracting programs

How employers, patients, and providers each view health benefits impacts access to care. Thus, it is imperative that benefits design be aligned with VBC programs.

Let’s say you create a VBC program that narrows patient choice, conveys a fixed price to the provider, and holds the provider at-risk for the patient’s outcome.  In this example, a benefit design with a high deductible is incongruent with the VBC program. The patient is forfeiting some degree of choice yet has potential for large out-of-pocket expenditure.  Likewise, the provider is placed at risk for the cost and the outcome, but still might have to collect significant financial responsibility from the patient.

These types of financial pressures will accelerate employer direct contracting approaches, with employers continuing to demand more accountability for costs and outcomes. Companies such as Walmart and Morgan Health aren’t only self-funding, they’re also providing primary care services in their own facilities. Such initiatives to harmonize health benefits with where care is being delivered should continue as employers strive to optimize plan designs.

Prioritizing patient engagement

A well-designed benefit plan is part of a successful VBC program, but patients must be engaged in management of their own health. Outcomes are better for providers, payers, self-funding employers, and individuals when patients have access to care and to their own health information.

Moving care out of traditional settings and into the home and community will be a major driver of increased patient engagement. By delivering care into the home or community, health care organizations will help patients take a more active role in their care. And while the use of virtual care has declined since the height of the pandemic, in part because people still want to have personal contact with their providers, telehealth will be a permanent part of the care delivery mix moving forward.

Capitation impact

Capitation models, such as direct primary care or behavioral health can benefit employers by fixing the costs of services. For providers, capitation ensures a predictable revenue stream, reduces the need for a large internal billing department, and shortens the time to reimbursement. Due to the mutually beneficial nature of these programs, we’ll see an increase in their deployment.

Interoperability, data digitization investments

As the move toward VBC and alternative payment models gains more momentum, employers who self-fund will need third-party administrators that have invested in associated business processes and technology infrastructure.  To find sustainable success in VBC, digitized data and analytics are needed at the individual patient level.  Artificial intelligence technologies, coupled with machine-learning algorithms in a robust data engineering framework that enables to-and-from integration between systems with this digitized data, are needed in order to make this transition a reality.  We are starting to see an increased focus on build/buy/partner type of investments toward technology infrastructure as well as the human capital to make VBC programs a success.

Emergence of value-based administration

As more employers, along with their benefits consultants, implement VBC programs and networks, there will be a growing awareness that value-based administration (VBA) is essential to sharing data and ensuring payments across a multistakeholder network. A robust infrastructure is essential for the administration of “Network of Networks,” which is what implementation of VBC programs at scale means.

VBA requires an infrastructure that enables data to be shared by network participants upstream and downstream on a permissioned basis. Such an infrastructure can support a variety of evolving, shared-risk reimbursement models that can be considered a form of VBC.

Further, as employers and benefits consultants increasingly recognize that Social Determinants of Health (SDoH) play a dominant role in determining patient outcomes and health care costs, VBC networks must continue to integrate Community-based Organizations (CBOs) that can share SDoH and other data, offer services, and coordinate care. Since many such groups have small budgets preventing digital technology investments, getting them on board and up to speed presents a formidable challenge.

Unfortunately, most legacy third-party administrative systems are unable to efficiently administer these types of programs at scale. Consequently, they lack the ability to manage a complex care network in which multiple stakeholders assume multiple roles while fulfilling the requirements of rapidly evolving VBC models.

Related: Six value-added payment approaches evaluated by CMS result in significant savings

As the year progresses, expect an increasing number of employers and benefits consultants to build value-based networks that support value-based programs designed to improve health outcomes while reducing costs. Additionally, alternative care delivery sites will continue to expand as employees demand personalized and convenient service, while leading-edge provider organizations will expand their direct-to-employer contracting initiatives.

Rahul Sharma is the chief executive officer and Lynn Carroll is the chief operating officer and of HSBlox, an Atlanta-based technology company empowering health care organizations with the tools and support to deliver value-based care (VBC) successfully and sustainably.