Shifting to Value-Based Care: Four Strategies Emphasize Agility

February 23, 2021

Article Summary


As the healthcare payment shift from fee-for-service (FFS) to value-based reimbursement takes longer than expected, health systems must balance existing volume-based models with a growing emphasis on value. Organizations are in different phases of the journey from volume to value, and policies continue to evolve. In response, the industry’s best stance is to sustain FFS revenue while following guidelines and strategies to be increasingly ready for value.

Organizations can use four methods to remain agile as they navigate the limbo between volume and value:

1. Understand the first ten years of value-based care and prepare for what’s next.
2. Identify essential strategies for shifting from volume to value.
3. Leverage the Medicare Shared Savings Program.
4. Use population health management as a path to value.

Patient Centered Care

One of the common themes around value-based care (VBC) is that the shift from volume, or fee for service (FFS), to value is taking longer than the healthcare industry expected. The delay has complicated the transition processes, as organizations know they must be ready for VBC but still rely on revenue from FFS reimbursement. Furthermore, COVID-19 will likely impact the move to VBC one way or another, but expert speculation remains divided on whether the pandemic will accelerate or slow the transition.

With so many unknowns, organizations must continue to support volume-based reimbursement and remain agile and ready to progress towards more value when the time comes. Health systems can navigate the reimbursement limbo by assembling strategies and guidelines to sustain volume while preparing for value.

Shifting to Value-Based Care: Four Ways to Balance Volume with Value

The following four approaches can help health systems balance volume with value

Understand the First Ten Years of Value-Based Care and Prepare for What’s Next

The year 2020 marked a decade since the passage of the Affordable Care Act in 2010 and healthcare’s first transitional steps from volume to value. As the industry enters into another decade of value in 2021, health systems must consider the impacts of these programs so far and make sure they have the processes and tools in place to succeed in an increasingly value-driven industry. The 10-year VBC progress report is mixed, as CMS and healthcare organizations are still evolving and adapting policies and strategies to optimize outcomes and performance. For example, while CMS’s emphasis on quality and cost is driving an upward trend for patients and providers with substantial improvement in readmissions, organizations still need to simplify and consolidate value-based programs for more widespread positive impact.

Identify Essential Strategies for Shifting from Volume to Value

The healthcare industry is suspended between value- and volume-based payment models, as unaffordability pushes the shift to value, but the current environment still supports volume. Health systems must understand the factors driving and sustaining both payment models and strategies for balance as value replaces volume to survive economically. Ten strategies can help health systems balance VBC with FFS:

  1. Maintain member perspective.
  2. Make cautious investments in hard delivery assets.
  3. Accelerate investment in digital infrastructure.
  4. Introduce innovative digital engagement solutions.
  5. Make pricing concessions.
  6. Align incentives.
  7. Manage networks.
  8. Build payer-provider trust and collaboration.
  9. Align clinicians and administrative team members.
  10. Encourage physician leadership and accountability.

Leverage the Medicare Shared Savings Program

Providing care to Medicare patients has historically yielded slim margins for health systems. However, value-based programs, such as the Medicare Shared Savings Program (MSSP), are now making Medicare patients a potentially lucrative population for organizations while also helping providers deliver the highest level of care to patients and communities. Under MSSP, health systems can optimize their Medicare-based revenue when they do the following: aggregate and analyze data, align financial incentives between payers and providers, engage patients in behavior or lifestyle modifications, and garner support from clinicians and encourage them to lead the shift to VBC.

Use Population Health Management as a Path to Value

As VBC definitions and goals continue to shift, organizations can move forward using population health management (PHM) strategies as a path to value. Population health is a data-driven strategy focused on the proactive management of a given population’s health by a defined network of financially linked providers, achieved in partnership with the community. The PHM path to value includes working with Medicare Advantage (a good growth opportunity with low barriers to entry); focusing on ambulatory, not acute, care as it delivers more value; leveraging registries based on utilization to identify the most impactable 3 to 10 percent of utilizers; and simplifying the physician burden by focusing on reasonable measures.

The Long Road to Value

As health systems find themselves in different phases of the journey from volume to value, and policies continue to evolve, the industry’s best stance on VBC is likely an agile one. Organizations will need to sustain FFS revenue while following guidelines and strategies to be increasingly ready for VBC.

Additional Reading

Would you like to learn more about this topic? Here are some articles we suggest:

  1. 2021 Changes to the Quality Payment Program: Must-Know Guidelines for ACOs
  2. Value-Based Care: Four Key Competencies for Success
  3. Analytics Enables Value-Based Care Transformation
  4. Activity-Based Costing in Healthcare During COVID-19: Meeting Four Critical Needs

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