Value-based healthcare: How it expanded during COVID-19

By Matt Phillion, PSQH

The National Alliance of Purchaser Coalitions recently conducted a survey that showed six in 10 employers are considering or already engaged in value-based design approaches, in no small part because of the impact of COVID-19. The new options in comprehensive, advanced analytic platforms that can help track, measure, and drive down cost make this shift increasingly possible. When analytics are combined with proactive care management and coordination through the Center of Excellence model, organizations are finding financial stability not seen during the pandemic.

How did COVID-19 prompt this focus on value-based care models? “When the world shut down in April and May of 2020, fee-for-service models ceased,” says David Snow, chairman and CEO of Cedar Gate Technologies, a value-based healthcare information technology company. “However, providers in value-based care payment arrangements, such as capitation, continued forward—taking care of patients and generating revenue.”

Value-based payment models were not only good for business during the pandemic, but also ushered in a new acceptance of telemedicine. Snow, also the chair of a telemedicine organization, recalls previous struggles with state medical societies for adoption.

“Prior to the pandemic, virtual care was deemed to be lower quality in comparison to an in-person visit,” says Snow. “It took COVID to dispel this preconceived notion. It is clear now that telemedicine delivers enormous clinical quality, financial value, and efficiencies. Sometimes it takes an earth-changing event to reorient things.”

The impact of COVID-19 on quality of care

Preexisting conditions became newly challenging during the pandemic, as chronic diseases such as diabetes and hypertension risked being untreated. Many patients fell behind on care, avoiding doctor visits and hospital stays out of concern of COVID-19 exposure—which added significant risks to those with preexisting conditions.

“Patient volumes dropped dramatically in the spring of 2020 but have come roaring back,” says Snow. “The challenge is that some people incurred harm and detrimental consequences from the disruption—particularly in the gap between the initial weeks of the pandemic and the full adoption of telemedicine. Motivated by patient outcomes, value-based providers were driven to quickly adapt to telemedicine to avoid disruptions to patient care.”

Moving to value-based care

Staying with fee-for-service may seem like the comfortable option, Snow notes, but that changes once providers experience the benefits of value-based care.

“In value-based models, wellness and the avoidance of the necessity of expensive and invasive treatments becomes the incentive, not the illness,” Snow says. “With new models in value-based care, we’ve solved the technology and data problem. We now have analytics that are very precise about where the opportunities are to perform better in terms of cost and quality. We’re able to solve these issues via the advancement of technology. Care is now well positioned to evolve in alignment with how we’ve evolved technology.”

Snow points to three models of value-based care:

• Primary care attribution, where plan members as a set become the primary care physician’s responsibility to manage and keep well, with incentives around cost and quality
• Bundles, where providers package the care inside a clinical pathway, with positive incentives for provider delivery systems; this differs from the model used elsewhere that moves from onset to surgery to postacute care
• Capitation, which is a set amount per patient over a period of time, regardless of whether the patient seeks care

Snow names global capitation as a central driver of innovation and competition because of its focus on wellness and early interventions.

With all this opportunity for change, what are we doing now that we should carry forward? “Technology has advanced, and healthcare is poised to benefit enormously. Healthcare is in the midst of seismic shifts,” says Snow.

Where we can improve, he adds, is in driving adoption of value-based care analytics, both financial and clinical. This insight and way of delivering care is more cost-effective, with demonstrated improvement in patient outcomes.

Advocates for transitioning to value-based care point to the financial stability it brings, as well as the alignment of incentives for care. “There’s a transparency that’s never existed before within value-based care models,” says Snow. “This transparency applies to providers and payers to gauge risk, patient outcomes, and cost. Everyone can now be aligned while driving real advancements in patient outcomes.”

Fee-for-service lacks this level of transparency, which makes it hard for providers to plan and make decisions based on expected consequences. “When providers work within a risk-based model or value-based model, they are invested in the data and driving strong patient outcomes,” Snow says.

Emerging technologies and next steps

Value-based care technologies are rising fast, and competition in the space has risen with equal speed.

“Value-based care is an area full of innovation. The organizations that can create a high-value stack of analytics, with a meaningful high-touch consumer experience and [an] end-to-end technology experience that drives great outcomes at a reasonable cost, will be the game-changers,” Snow says.

Through adoption and integration of innovative solutions in care management, payers and providers can benefit from the explosive innovations following COVID-19—many of which were already under development but have been catalyzed coming out of the pandemic. Now, healthcare technology with multifaceted solutions that drive preventive and proactive patient care is coming to fruition.

“COVID’s impact resulted in dramatic change and is now part of our healthcare framework. We’re not going back to the old way,” he says. “It’s a positive change. There’s no doubt in my mind value-based care will be the dominant theme in the next 10 years for reimbursement—it’s going mainstream.”

Matt Phillion is a freelance writer covering healthcare, cybersecurity, and more. He can be reached at matthew.phillion@gmail.com. This story first ran on PSQH.