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The Road Ahead: The Future of Value-based Care in Today's Climate

August 29, 2017
by Norberto Correo, Senior Director of Consulting Services, Change Healthcare
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While the rules governing value-based payments may continue to shift in the future, the VBC train has been chugging along for a couple of decades now. We’ve been moving in the direction of better outcomes and lower costs since the advent of managed care and HMOs in the mid-1990s. And honestly, no government action has the power to stop the inertia behind value-based programs.

Interestingly, before we can look ahead we must look back to better understand where we started and where the future is headed.

 

A Glimpse into the Past

When value-based care joined our lexicon, healthcare innovators were more focused on establishing and hitting target metrics of care, not “quality of care” as most industry players define it today. But the impetus to address overall health and patient outcomes has always been on the radar. The industry just lacked the systemic processes to strengthen doctor-patient relationships.

That shifted once HMOs and managed care started to gain traction. The definition of “value” began to evolve, and the focus on patient health as a long-term set of engagement tactics, aided by information sharing, began what I call the value-based transformation.

 

The Transformation Gets Underway

Value-based care gave us a way to have multiple conversations at once with all of healthcare’s stakeholders: How do we enable better health outcomes while lowering the cost of care? Obviously, no one group can solve this problem alone. Value-based care forces us to collaborate across stakeholder groups in some unfamiliar and innovative ways.

That’s why I believe my stance is a relatively safe position to have. Regardless of who made the rules, value-based care is here to stay. Value-based models are about accountability and engagement. Who’s paying, how much, what for, and how do we move further away from the fee-for-service model? These are the fundamental questions underlying both value-based care and value-based payments. And over the last couple decades, we’ve seen early-stage, partial answers to these questions—across a timeline riddled with disruptive inflection points.

 

The Major Inflection Point

The Affordable Care Act (ACA) really moved the needle forward, and we are still living amid that shift. The transformation continued with the rise of consumerism, through state and federal exchanges. Now one person wears three hats: the patient, the member, and the consumer. And those three hats all have slightly different needs when it comes to value-based programs.
 

As if the landscape didn’t have enough complexity already.

But there are some synergies here. As patients take on more responsibility, providers are leveraging that responsibility by arming them with education to better manage their own conditions. Now, the patient is a partner, along with the providers, in achieving their own quality outcome.

The ACA helped provide the conditions and improve the infrastructure for increased coordination and information sharing. The result ushered in a new era of value-based program models that commercial and consumer markets could adopt or improve. That original guidance didn’t necessarily begin a new conversation but rather extended a discussion that started in the late 1990s.

Even without the ACA, value-based models are a self-sustaining initiative. We still have some of the highest healthcare costs in the world, and before we had identified a way forward, many institutions treaded water and churned themselves out of business. Then the ACA helped to nudge us forward and provided a framework.

 

Providing the Model

Starting in January 2017, the Centers for Medicare and Medicaid Services continued to nudge us toward value-based care by introducing a new value-based reimbursement model - MACRA. One component of MACRA combines a few key programs -- Medicare Meaningful Use, Physician Quality Reporting System, and Value-Based Modifier -- into the Merit-based Incentive Payment System (MIPS). MIPS requires providers to increase their efforts to innovate, report on quality, and produce better patient outcomes.

The investments and processes required to comply with MIPS are well underway. And so long as healthcare continues to face quality and cost issues, there will be a need for value-based programs. To that end, if we consistently improve outcomes at relatively lower costs for all three stakeholder groups - providers, payers, and consumers, then we can safely say we’re moving in the right direction.

 

Where Does This Leave the Stakeholders?

Make no mistake, this is a transformation at all levels. Everybody is changing how they interact, use information, shop, research, and align around changes in the delivery system. We are living through the transformation in real time, and each stakeholder group has slightly different marching orders.

There should be no surprise that providers need to better understand their practice goals and align themselves with the right technology solutions to hit those goals. Individuals need to continue to become more informed and skilled consumers. And payers must continue to find innovative ways to engage their members, which boils down to understanding their population and applying creative new solutions.

Rules change. Regulatory environments ebb and flow. But the fee-for-service model is squarely in the industry’s rearview mirror. Focus on what’s coming around the next bend, stay sharp, and keep your eyes on the road ahead.

© 2017 Change Healthcare Operations, LLC and/or one of its subsidiaries or affiliates. All Rights Reserved.

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