Category: Value-Based Care

Value-based care has worked better on paper than in practice, and a new research letter in JAMA Health Forum offers a possible explanation for the disparity: administrative overkill.

The first-of-its-kind analysis tracked 890 primary care physicians in value-based care contracts from 2020 to 2022, finding that:

• PCPs tracked an average of 57 quality measures.
• The average VBC contract contained an average of 10.2 quality measures.
• The average number of VBC contracts held went from 9.4 in 2020 to 12.3 in 2022.
• This chart has the full breakdown.

The first bullet alone shocked the authors of the study, as well as most industry onlookers who  

expected payors to have some form of quality measure coordination.

• The fact that the PCPs held an average of 11 VBC contracts with 10 quality measures each, and still managed to have 57 different quality measures shows how little coordination (if any) actually takes place.

• Extrapolate that administrative burden to an average panel size of 1,309 patients, and it’s no surprise that more providers aren’t lining up to jump on the VBC bandwagon.

What would help the situation? Although out of scope for this study, a well-timed Commonwealth Fund focus group with 29 PCPs explored answers to that exact question.

• The PCPs were concerned that many utilization and cost measures unfairly penalized them for outcomes beyond their control (ex. acute hospitalizations and total Medicare expenditures are also affected by other providers and specialists), and felt these measures should only apply to health systems or ACOs rather than small practices.

• The PCPs thought measures of access (ex. appointment availability, wait times) and continuous care (ex. repeat visits with the same doctor, communication) would better reflect true high-quality care.

• The lack of alignment across models and payors caused PCPs to use more time “meeting the requirements of payors than meeting needs of patients,” and they urged the government/employers to encourage consistent measures and reporting requirements.

The Takeaway

If value-based contracting is intended to promote high-quality care, does having doctors try to optimize for 50 different quality measures really accomplish that? An uncoordinated approach is not only unsustainable, but also counterproductive. Quality measures that amount to visit distractions and provider burnout aren’t a recipe for long-term success, and this study makes it clear that better coordination is a missing ingredient.

Despite years of provider attention focused on getting out in front of consumerism, health system performance metrics remain centered on transactions rather than the strength of patient relationships. 

Kaufman Hall’s 2023 State of the Healthcare Consumer Report explores the key findings distilled from a survey of 59 healthcare executives, each revolving around quantifying consumer relationships and incorporating that data into operations.

The use of consumer-focused measurement remains limited among health system leaders, and organizations over-rely on traditional transaction-focused metrics.

• An FFS model that incentivizes volume gives rise to performance metrics that track the same, such as visit volume (tracked by 100%), market share (89%), and revenue per visit (86%).

• Only half of respondents track at least one advanced consumer-focused measure, such as share of a patient’s total healthcare spend, their lifetime value to the system, or churn.

While traditional metrics provide valuable insights, they don’t capture the “stickiness” of patient relationships, a key driver of both better outcomes and business improvements.

• One exec noted that most health systems deliver a wide range of services, but they rarely package and articulate them to consumers in a way that provides more touch points along the care continuum.

• By contrast, financial-service companies lean in on consumer-facing metrics, which allows them to go after share of wallet and lifetime value through integrated solutions.

Kaufman Hall then offers a Glide Path to Success for health systems looking to recalibrate toward a more relationship-based strategy.

• Perform an assessment of each service line using consumer-centric metrics
• Identify loyalty drivers by analyzing how patient choices impact upstream utilization
• Identify services that could be improved or added to improve consumer metrics
• Measure ROI to determine whether changes are creating the expected return and pivot if they’re not

The Takeaway

If the industry intends to shift from volume to value, it’s important to continue asking what exactly it is that patients value in their healthcare. Asking them directly is an obvious option, but consumers vote every day with their wallets and their business, so tracking that data seems like a critical first step to delivering on what really matters.

There have been some amazing healthcare market updates published recently, but Trilliant Health’s 2023 Trends Shaping the Health Economy Report might just take the cake.

The expansive analysis highlights 10 trends that define the emerging landscape of the health economy, as well as the corresponding challenges for each stakeholder.

It goes deep… 147 pages deep to be exact, but it’s well worth the time if you can find it. That said, time is a hot commodity, so here’s the breakdown:

1. The commercial coverage market continues to erode
2. The physical and mental health of Americans is unraveling
3. Drug and diagnostic investments signal emerging patient needs
4. The tepid demand trajectory for healthcare services persists
5. Consumer behaviors are starting to manifest in patient decision making
6. The traditional care pathway is becoming disintermediated
7. New models of care further constraining provider supply
8. The monopolistic effects of provider M&A are overstated
9. Employers are facing higher costs for less care
10. The market yield has been revealed, and it’s lower than you think

Where do we go from here? Stakeholders that depend on the commercial population can no longer ignore the fact that healthcare is a negative-sum game, with costs outpacing the value that’s created. Demand is heading in the wrong direction, and we cover new entrants commoditizing services on a weekly basis. The way to “lose less” is to compete on value.

It’s the same strategy for every payor, provider, and pharma company. The tactics are what’s different. Pick your battles, cut losses early, and lose less frequently / by a smaller margin than the competition. There isn’t enough space to get into those here, but 147 pages definitely gets the job done. 

The Takeaway

These trends each stem from the fact that healthcare is a negative-sum game, and that every part of the health economy will be impacted by reduced yield. Demand is declining alongside the number of people with commercial health coverage, while at the same time new entrants are commoditizing services and making loyalty harder to capture. Although the answer to this problem isn’t nicely tucked away in the report, Trilliant does a masterful job highlighting the trends that might help find it.

If we’re in a digital health funding rut, Aledade definitely missed the memo. The primary care enablement company just raised what looks like its “last funding round needed” after securing an eye-popping $260M in Series F capital.

Aledade partners with independent primary care practices to establish tech-enabled accountable care organizations. It uses data analytics and guided workflows to help better manage high risk patients, then shares in the success of its partners’ value-based contracts.

• The company works with over 1,500 practices across 45 states, and the 500 that joined this year make it the country’s largest network of independent PCPs.

• Aledade’s 150+ VBC contracts cover more than 2M lives (including 1M Medicare Shared Savings Program, 250k Medicare Advantage), collectively controlling over $20B in total healthcare spending. 

• Although Aledade has many “fellow travelers” in this space (namely Privia, Agilon, et al.), it views fee-for-service as its real competition, and recently walked the talk by converting to a Public Benefit Corporation.

The funding is earmarked for accelerating the growth of Aledade’s primary care network and its strategic partnerships with payors, but it will also allow Aledade to keep an “opportunistic” eye on potential acquisitions.

• Aledade already picked up VBC analytics platform Curia in February, marking its second M&A move after acquiring end-of-life care planning company Iris Healthcare last year.

• The recent launch of Aledade’s Care Solutions division also gives it a way to help PCPs deliver wraparound services, and the companies that provide these services are high on the M&A target list (behavioral health and kidney care were honorable mentions).

The Takeaway

Aledade’s flywheel is clearly getting up to speed, with each practice that it signs making it easier to get payor contracts, which in turn makes it easier to sign practices. That virtuous cycle and a $260M Series F round might suggest that a public market debut is on the horizon, but in the words of Aledade’s CEO Dr. Farzad Mostashari, “An IPO is not a destination.” Aledade’s focus is on the journey of bringing value-based care to the masses, but “if we’re ready and the public markets are ready… then that’s what we’ll do.”