July 29, 2022
Transitioning Health Systems to Value-Based Care
The transition to value-based care puts costly acute care under a magnifying glass. The United States spends $3.8 trillion on healthcare annually. Astonishingly, acute episodes of care amass $1.9 trillion of that total cost. Of that, only $200 billion of acute care spend — or about 10% — goes to activities covered under value-based care agreements. This breakdown leaves a whopping expenditure for expensive episodic care, typically provided at a hospital under a fee-for-service arrangement.
Payers are increasingly prioritizing partnerships with value-based care providers. Hospitals and health systems need reliable tactics to align their business models with this priority to stay ahead of the curve.
During Becker’s Hospital Review’s 12th Annual Meeting, Robert Bessler, MD, founder and CEO of Sound Physicians, discussed five value-based principles and how hospitals and health systems can implement them.
Important Principles for VBC Transition:
1. Align incentives and provider accountability for managing total episode cost
The acuity of care primarily depends on whether patients are considered high risk, low risk, or no risk. Assigning performance-incentivized care teams to only one subset is good practice as it results in more intensive, value-oriented workflows.
“When you get two to four of your 20 doctors to focus on a subset of patients, you can get better outcomes for those patients because you do the same thing every day the same way,” says Dr. Bessler. “Giving doctors the time and resources leads to massive increases in advanced care planning, opening the door for better patient experience and less futile care.”
2. Support consistent practice with purpose-built clinical workflows enabled by technology
A concerning observation about a patient triggers a purpose-built workflow. It involves defining the goals of care for that patient, including advanced care planning.
Sound’s technology platform layers on top of hospital EMRs and produces a prompt to help physicians determine whether they should activate a purpose-built workflow. Would you be surprised if this patient wasn’t alive in a year? “If the doctor says ‘No, I wouldn’t be surprised,’ advanced care planning is triggered because it’s the number one predictor of mortality,” says Dr. Bessler.
3. Focus on patients most at risk for adverse outcomes
Attending to the following patients requires real-time data feeds and predictive analysis:
- Patients who are members of a bundled payment
- Patients who are members of Medicare Advantage or an accountable care organization program (i.e., an organization has taken on risk in a value-based agreement)
- Patients identified as high-risk.
Such focused management can reduce spending by more than $1,000 per episode, thereby reducing financial risk for the organization.
4. Ensure continuous physician oversight, real-time analytics, and performance management
Putting meaningful data in the hands of physicians gives them visibility into aspects of care they can control, such as deciding when to discharge a patient and how their performance affects value-based metrics like length of stay and readmissions rates. When benchmarked against regional averages, this data helps drive results. Results include avoiding penalties and reducing the number of “failed” discharges (patients who get readmitted within a certain period).
5. Enable high levels of collaboration with primary care providers, post-acute providers, and plans
Organizations can reduce readmission rates attributable to poor post-acute care by fostering high-quality networks with senior nursing facilities and home health care agencies and putting doctors in charge of helping patients select a post-acute provider.
“We monetize by preventing readmissions, which is good for our hospital partners,” Dr. Bessler says, clarifying how Sound’s platform supports organizations in overseeing patients’ post-acute care. “We don’t care about an $80 billable visit…what we care about is figuring out how [hospitals] get paid for the value of preventing a $13,000 readmission.”