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Chapter 3: Driving Preferred Behavior: Changing Incentives & Care Delivery Under Value-Based Care

Published Date
Author Lucy Li

This post is part of a series of blog posts aimed at unpacking value based payment for primary care practices looking to make the transition to value based care. Click here to read more about how Elation supports the transition to value based payment. 

By: Lucy Li & Dr. Sara Pastoor 

We’ve established that the U.S. has the most expensive and worst performing healthcare system in the developed world. It’s admittedly a grim situation, but we also know that there are many people who are invested in changing it. To support this change, we have adopted the principles of the Quadruple Aim and presented value-based payment as the new frontier for the industry.

Source: Institute for Healthcare Improvement (IHI)

Developed by the Institute for Healthcare Improvement, the Quadruple Aim serves as the “North Star” of healthcare. It represents the healthcare industry’s aspirational goals and encompasses four critical dimensions of healthcare: improving the patient experience, improving population health, reducing costs of care, and improving provider satisfaction. Here, we will help you understand the strategy to get there. 

Payment Arrangements to Support the Quadruple Aim

Recall that the fee-for-service (FFS) payment model reimburses a healthcare professional for each individual service rendered. Under these rules, the more services a provider packs into a day (i.e. more appointments, procedures, and testing), the more they earn. Across the industry, whether directly or subconsciously, this opportunity to earn more money by doing more things can heavily (and systemically) influence decision-making and ultimately drive excessive services without ensuring the necessity and quality of those services.

To support the goals of value-based care, value-based payment mechanisms (VBP) emerged as an alternative to fee-for-service. VBP’s goal is to clear a path for providers to make decisions solely based upon a patient’s best interests without extrinsic forces incentivizing quantity of care rather than quality of care. 

Performance Measures

One might argue that quality is inherently subjective, where “delivering good care” can mean different things to different people. How do we fairly and consistently assess quality of care so that we can justify using it to determine a provider's reimbursement?

One of the ways VBP attempts to tackle this problem is by implementing performance measures. These are proxy measures which attempt to consistently assess how well a healthcare professional has demonstrated the quality of their care and subsequently determine how much to pay them.

Four Types of Performance Measures

Source: Centers for Medicare & Medicaid Services (CMS)

Examining the care delivery changes that are also necessary to successfully implement VBP

With different payment incentives in place, we must rethink the traditional ways of organizing and operating a practice in order to achieve success in VBP. While this places new demands on the practice, it also potentially provides relief from some of the burdens of FFS while creating new opportunities for additional revenue streams. Additional VBP revenue allows the practice to relax its grip on the pursuit of volume to survive and trim down their patient panels to a more manageable size. This gives them the capacity to focus on driving outcomes for these patients.

In VBP, the PCP is elevated as the quarterback of the patient's care, “accountable” for setting the patient’s treatment plan and achieving outcomes. The additional revenue also means practices can invest in more resources, including technology and new team members to help address the needs of their patient population more effectively and proactively. 

The Central Role of Care Coordination

It is important to remember that primary care manages more tasks, information, and collaborators per patient than any other medical specialty. As "comprehensive-ists", PCPs are constantly on the receiving end of an abundance of data and medical opinions. In order to collect and integrate so much disparate information into a cohesive patient-centered plan, they must collaborate and coordinate effectively, both within their own teams and with various outside professionals involved in their patient’s care. 

Care coordination is the specific activity that supports this and is critical to VBP success. It ensures the right information is getting to the right people and improves communication across providers and settings so there is minimal fragmentation, duplication, and delay of patient care.

Summary

We’ve learned that the combination of new payment arrangements that reward quality as well as changes to the care delivery process are needed to realize the goals of value-based care.

  • Performance measures (process, outcome, patient experience, and utilization) give us a consistent way to assess and pay for high quality care, and 
  • Expanded teams and new processes enable the new work required to drive results.

The shift to VBP has introduced new challenges for primary care, creating an opportunity for technology to fit intelligently into workflow and evolve in lockstep to promote success efficiently and by design. In the next chapter, we’ll unpack the role of technology in meeting VBP needs.