The COVID-19 pandemic and changing workplace dynamics have intensified the shortcomings of the fee-for-service model of healthcare. The pandemic reduced the volume of health services provided onsite at medical facilities, causing fee-for-service based practices and system to feel the effects.
Now, as populations shift and hybrid and remote workplaces grow more prevalent, a host of new challenges have emerged that the fee-for-service model is ill-equipped to address.
The progression toward value-based care
Before the pandemic, policymakers identified that value-based models could provide a better experience for patients and providers, as well as a more sustainable future for the Medicare Trust Fund. The Centers for Medicare & Medicaid Services (CMS), the largest healthcare payer in the US, has been moving towards value-based payment systems since the early 2000s.
These changes, which began with how hospitals are paid, have since prompted provider groups to join accountable care organizations (ACOs) and advanced payment models (APMs). In these programs, participants take on a mix of risk and reward for the outcomes of their patient populations, earning bonuses if they demonstrate decreased cost and increased quality of care.
The goal of these programs was to accelerate the shift towards value.
Purchasers of healthcare are making that shift. The majority of those switching to value-based care are currently independent providers of care and groups, as they are best equipped to take on downside risk.
However, value-based reimbursement is still a minority of overall reimbursement. Interestingly, fee-for-service and capitation (where providers are paid a fixed amount in advance for each patient and unit of time) models are increasingly embracing quality-based pay, incentive-based pay, and more shared savings and risk, thus acknowledging the need for a new approach.
Current challenges to adoption
The transition to value-based care has not been simple. Commercial groups vary greatly from the senior population, which means modeling value-based care with Medicare Advantage is not a perfect solution. Employees want access to choice and purchasers prefer control over how exactly they adopt value-based care.
The duration of time an employee remains with a single employer is also decreasing. When members change employers, their providers are often no longer in the same network. This makes it more difficult for participants in ACOs and APMs to realize savings.
Thresholds can also serve as a barrier preventing participants from achieving payment bonuses. The structure of the thresholds can discourage some APM entities from including specialists in the APM network. This structural flaw discourages multi-specialty practices, makes it more difficult to achieve alignment amongst health services, and ultimately reduces the number of physicians and patients participating in APMs.
But, despite these challenges, the time to shift to value-based care is now. Policymakers must rethink incentives, but purchasers shouldn’t wait for the perfect conditions. Those who lead the transition will be able to provide the best outcomes, meet the needs of their evolving populations, and emerge in the strongest position.
Value-based care is better for providers
Value-based care relieves the pressure to deliver a high volume of services and allows primary care providers to break the cycle of overreliance on specialty care.
Although every provider has experienced some level of exhaustion since the onset of COVID-19, the value-based model has been more effective at alleviating physician burnout. When rewards are based on quality, providers operate at the top of their licenses and experience the satisfaction of helping patients achieve better long-term health outcomes.
How payers can invest in value-based primary care
Payers don’t have to wait for policies that provide better incentives — they can move forward immediately. When they partner with Vera to deliver primary care for their members, they balance insurance risk with provider risk. In doing so, they can be in the vanguard of a more cost-effective and caring approach to health.
Vera is well positioned to be a strategic partner in the risk-bearing ACO and APM environments. Why? Because our proven advanced primary care (APC) model improves patients’ whole health through biopsychosocial care, health coaching, care coordination, and analytics that help target population needs.
Our model is also designed to offer the flexibility to respond to patients’ needs and meet them wherever they are, whether in a pandemic or post-pandemic world. Our virtual care options and vast network of access points and partners ensure no member falls through the cracks.
Vera Whole Health + Castlight Health
We’ve also extended payers’ ability to meet and exceed their goals by combining with Castlight Health. Castlight’s digital tools, including a cutting-edge navigation solution, will further improve engagement and outcomes, in part by empowering members to play a proactive role in their own healthcare journeys.
Combining Castlight’s leading digital navigation tools with the APC model allows us to better address the needs of each population, including high-risk populations most in need of in-person or virtual care. It also expands the digital landscape of APC, allowing us to further solve the challenges involved in caring for hybrid and remote workforces.
It’s a new model of tech-enabled total care that will make a huge impact on the health of the commercial population. Payers can control the total cost of care, offer a better member experience, attract new members, and increase retention.
Public policy relating to value-based care will continue to change as public scrutiny of healthcare increases. We will be paying close attention to these changes to ensure our partners continue to benefit from a risk-bearing, value-based model that leads to a better member experience.
Editor's Note: This is an updated version of the original post published on December 30, 2020.