I get asked about value-based care a lot. It is a buzzword or term these days, somewhat driven by the rise in Medicare Advantage enrollment. Frankly, it is a bit of a catch-all concept that has its origins in Medicare and various demonstration projects (e.g., bundled payments) and the implementation of quality measures to “improve care” (theoretically). The goal of value-based care is simply to save money by improving how care is delivered, often meaning reducing certain more expensive procedures, tests, visits, stays, etc.
At its loftiest level, value-based care is a model in which providers, including hospitals and physicians, post-acute, etc. are paid based on patient health outcomes. Under value-based care agreements, providers are rewarded for helping patients improve their health, reduce the effects and incidence of chronic disease, and live healthier lives in an evidence-based way (NEJM Catalyst, January 2017).
In reality, the value-based care as defined above, is a tiny fraction of the U.S. healthcare delivery system. Why? Because payment systems under the largest insurer, Medicare, don’t truly compensate for wellness and for care management. Episodic, procedure driven payments, are still the two (or maybe six) ton gorilla driving Medicare, including Medicare Advantage.
Medicare does use the term loosely, especially for programs like VBP (value-based purchasing) – a real misnomer. VBP essentially provides incentives to hospitals and post-acute providers to enhance the safety of care or the efficiency of care, rewarding institutions and providers that minimize infections, falls with injuries, rehospitalizations, etc. The rewards for better than average performance are small increases (a point or two) in Medicare reimbursement while the punishment for bad performance is reimbursement reduction. Again, notice that this concept is tied to “utilization” not to promoting health to avoid utilization. CMS’ Value-Based Care website is here: https://www.cms.gov/priorities/innovation/key-concept/value-based-care#:~:text=Value%2Dbased%20care%20is%20a,what%20an%20individual%20values%20most.
The most common value-based care models that do exist, though with again, minimal market share by comparison, are Accountable Care Organizations (ACOs), SNPs (Special Needs Plans), and PACE programs. Quickly, the basics of each are below.
- Accountable Care Organizations (ACOs): In an ACO, doctors, hospitals, and other healthcare providers work as a networked team to deliver the best possible coordinated care at the lowest possible cost. Each member of the team shares both risk and reward, with incentives to improve access to care, quality of care, and patient health outcomes while reducing costs. Typically, these models work on a capitated basis whereby each enrolled participant has an X value. The organization agrees to deliver all care on an insured basis and when the end of defined period is complete, the entity (ACO) makes money by having saved expenditures through more efficient care management. A good primer on ACOs is available here: abcsofacosonepagerfinal
- Special Needs Plans: A special needs plan (SNP) is a Medicare Advantage (MA) plan specifically designed to provide targeted care and limit enrollment to special needs individuals. It is an insured program, working like a Medicare Advantage plan, on a capitated basis. The Plan essentially provides all care for the individual enrollee (with a few exceptions). Most common SNPs are I-SNPs (institutionalized persons), typically dual eligible (Medicaid/Medicare) A special needs individual could be any one of the following:
- An institutionalized individual.
- A dual eligible (Medicare/Medicaid).
- An individual with a severe or disabling chronic condition, as specified by CMS.
- PACE/Program of All Inclusive Care for the Elderly: PACE is a Medicare and Medicaid program that helps people meet their health care needs in the community instead of going to a nursing home or other care facility. PACE plans are capitated like SNPs and act like insurers. similar Medicare Advantage. Money from PACE is made via savings and theoretically, quality incentives tied to institutional use. The goal is to maintain a vulnerable, institutional-ready population, in the community. More on PACE via CMS: https://www.medicare.gov/health-drug-plans/health-plans/your-coverage-options/other-medicare-health-plans/PACE
With the above as our value-based platform (though not exhaustive), let’s look at reality. Today, value-based care is more aptly defined as care coordination. It is best thought of as a system where providers find alignment, sharing savings as an incentive. For post-acute providers, this means that the highest and best value-based care options are found in creating alliances with insured programs, primarily, Medicare Advantage. Opportunities of course, do exist within ACOs and SNPs but, as these programs are far more limited, market geographies delineate the opportunity.
When I look at various markets and talk with various providers, the opportunities I see fall in one of four categories.
- Post hospital discharge, shortening the hospital length of stay, providing post-acute direct admissions as needed.
- Preventing hospitalizations via utilization of care management services.
- Shortening and making more efficient, the post-acute process by integrating providers.
- Reducing expenditures within post-acute stays by integrating care and developing/using algorithms and pathways (more efficient rehab, more efficient wound care, more efficient medication use, etc.).
Each opportunity above requires not just efficiency but high levels of patient/significant other engagement and ultimate, satisfaction. Quality of care is also required to minimize compliance risk (expensive to deal with patient complaints, especially regarding access and coverage) and to continue to support product/service development (best practices).
When I have worked with post-acute providers on value-based initiatives, I’ve worked specifically on the following initiatives which all, can be utilized in a value-based care model.
- Integrating post-acute inpatient care (SNF) with home health and outpatient services. This integration is developed and marketed as a one-stop, one-referral model. It can be a single organization that provides all three or a group of organizations working collaboratively together (need to be a bit mindful of self-referral issues for physicians).
- Developing specific disease-state/post-acute condition care protocols. Effectively, these protocols work as pathways to shorten the inpatient or home care stay, minimize complications, standardize supplies and treatments, and in some cases, generate pharmacological care plans (standardized medications).
- Develop specific core competencies within the provider groups to be able to address more complex patient profiles and deliver more effective care. For example, integrating pharmacy as a provider within the value-based care model, if possible, specific pharmacists. Having advanced services available such as videoflouroscopic swallow capability, lymphedema expertise, wound expertise, psychological services/mental health, IV capability, etc. The more competent the provider group is (SNF, Home Health particularly), the greater the satisfaction to the patient (minimized delays in care, fewer care transitions), the greater the cost control points.
Below are some resources (not exhaustive) on this site that fit within the above framework, free to download. Likewise, any providers that want/need additional resources and assistance to improve or build-out, a value-based care initiative, comment to this post and/or drop me an email at rhislop@h2healthllc.com and I will respond directly.
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