October 22nd, 2015

Preparing for a VBP System

Bill Conlan

The movement towards value-based payments (VBP) in the healthcare market has transformed from small waves offshore to an imminent storm. So how do payers prepare themselves to thrive and be leaders in the healthcare marketplace of the future? We have identified three operational challenges that payers must overcome so that they can move past these pilot initiatives and really grow their VBP base.

1. Identify your episodes of care (EOC) opportunities. Payers need to start by analyzing their own longitudinal claims information and identify EOC in terms of volume, variations of care, and cost. It is essential that payers can identify the high value episodes of care within a given population, and for the most part, they are sitting on that data. The key is to engage the proper analytics that will allow them to unlock that knowledge and power.

2. Understand the delivery of care. Once payers have identified the most frequent or costliest episodes of care, the second task is to identify the supply and delivery of care that is happening within their provider network for that episode. Who are the high performers? These are likely the providers to be approached first with contractual agreements. The second part is to understand who is not performing well, because this is an opportunity for education.

3. Create transparency. This is the aspect that HQX is most passionate about, and we feel has been the missing ingredient with otherwise great technology in the past. You can understand your EOC and high performing actors, but to have a successful contract discussion with them, payers need to be prepared with transparent information that increases engagement and trust. Providers must clearly know the risks and rewards and how they are going to be measured. There is plenty of evidence that once you show a provider where they really are in comparison to their peers, they want to achieve and will work hard to do so. Being able to provide that transparency is fundamental to engagement and successful contract negotiations, and ultimately the long-term success of any VBP program.

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