For more than a decade, healthcare reform advocates have painted a picture of how value-based care is better for patients, and how it helps practices contain and reduce burgeoning healthcare costs.

What was always less clear was how the American healthcare system would manage this pivot. How do large health systems manage the trade-off of fewer hospital beds filled as patients stay healthier and care is increasingly home-based? How do practices identify the patients at greatest risk and build the care team and infrastructure to address their needs?

Recently, athenaInsight spoke with several physician leaders to gather advice on the best ways to get started with value-based care, from payment plans, to care management to risk stratification. Here is their advice:   

Leadership and vision 

Physician leaders stress that the organization needs to agree on why value-based care is necessary, why it’s undertaking a monumental change to the way it provides care. Everyone at the organization needs to understand and accept the vision so they can stay the course when the going gets hard. 

At Carelon Health, a care delivery system that serves more than 160,000 patients in nine states and the District of Columbia, “there’s a philosophy and culture of care at the heart,” says president Sachin H. Jain, M.D. CareMore’s leadership has built a model of care that supports this philosophy: Clinicians see only 10 to 15 patients daily, spending as long as they need with each one. They build relationships, which means patients are healthier over the long term. 

Leadership needs to understand that a commitment to quality means changing executive incentive structures, linking them to managing health rather than filling hospital beds. That’s why, at CareMore, providers and leaders are paid bonuses based not on volume but on whether their patients stay out of the hospital. “There's a full alignment of how people are paid, the kind of work that they're enabled to do, and how people are hired,” says Jain. “It all comes together in a virtuous circle.” 

Value-based care programs 

Once the organization understands why it is committed to change, the next step is to pick a care and/or payment model that best serves the health system’s needs and goals. As the largest single payer in the country, the Centers for Medicare & Medicaid Services (CMS) has traditionally driven the creation of most alternative-payment models (APMs), and private payers have largely aligned their contracts with the same program criteria. 

There are a wide variety of APMs ranging from bundled payments, which make sense for certain specialties and medical conditions, to fully risk-bearing entities like accountable care organizations (ACOs). Health leaders say the most important thing is to select the alternative payment model that best suits the practice’s patient population, care philosophy, and infrastructure.  (For more details, read A buyer’s guide to alternative payment models.) 

Care management 

Care management is the linchpin of value-based care — helping organizations understand which patients need help, which are at risk of hospitalization, and what they need to turn things around.  

“The more you can understand the person in front of you, the more able you are to build a care plan that matches up with their value system,” according to Jeffrey Lowenkron, M.D., chief medical officer for The Villages Health, a patient-centered medical neighborhood affiliated with The Villages retirement community in central Florida. 

Care management revolves around care plans that are developed through shared decision-making between the patient and a care team that understands the patient’s values, supports them as they work through the plan, and connects them with resources for social determinants of health (SDOH) as necessary.  

All of those activities require resources, and small practices in particular should look at care management fees from CMS or private insurers as a way to offset the upfront costs of increased patient outreach, addressing SDOH, care coordination, and the technology to support it all.  

“You have to negotiate a care management fee that really lets you start to do this work,” says Timothy Dudley, M.D., formerly of DTC Family Health in Greenwood Village, Colorado, current CMO at HealthOne Colorado Care Partners “because a leap of faith on shared savings is a really big deal for a small or even a midsized practice.”  

Risk stratification of patients

Value-based care requires practices to accurately risk-stratify their patient population, so they know where to deploy care management resources appropriately. Most practices have some variation of high-, medium-, and low-risk based on condition, demographics, and health history, and this risk-level drives care-management decisions.

Upon joining CareMore, each patient has a “healthy start visit” designed to identify people with poorly managed chronic diseases and other medical and psychosocial concerns, and enroll in them in the right support programs. There is a particular focus on social determinants of health. 

At DTC, care teams meet weekly to assess high-risk patients. One way to think about, Dudley says, is to ask, “Who scared you to death this week? Who would it not surprise you to see in the hospital or dying in the next six months?” Those are the folks DTC reaches out to immediately — it is a very effective way to focus outreach and resources.  

CareMore focuses additional outreach on patients who are rising in risk, even if they are not high-risk yet. For example, a patient might have a hemoglobin A1C that is within normal limits for a patient with diabetes, but has increased rapidly from a previous episode. Patients like these are targeted for rapid intervention. 

At The Villages, the clinical team works off “both in-reach and outreach reports,” says Lowenkron, so they not only know which patients have been into the office and aren’t doing well, but also who hasn’t been seen but should be. 

You have to start by picking an [EHR] that will help you empanel and risk-adjust your patients...then you decide what to do with the people you've identified

-Timothy Dudley, M.D., CMO, HealthOne Colorado Care Partners

Everyone agrees that real-time or near real-time data is critical to accurate risk stratification, including data from other providers, emergency departments, and hospitals; also essential is an electronic health record that can handle all that data. According to Dudley, “you have to decide why you want to do this, then you have to start by picking an [EHR] that will help you empanel and risk-adjust your patients. Then, and only then, can you decide what you want to do with the people that you've identified.”  

Technology requirements 

Physician leaders agree that care management and patient risk stratification are nearly impossible to establish and maintain without a significant boost from technology. “The [EHR] has to help you do this or you’re just sunk,” says Dudley. At DTC, the EHR is configured so staff can’t move past the “quick-view” screen without empaneling and risk-adjusting the patient, and the EHR displays each patient’s risk adjustment factor (RAF) whenever the chart is opened. It also prompts the provider for recommended care related to the patient’s conditions. 

At Jersey Coast Family Medicine, the EHR flags potential mistakes in a patient’s risk level – Kenneth Kronhaus, M.D., gives the example of the patient whose leg was amputated due to diabetes, but, come January, it seems to have grown back according to Medicare. Kronhaus says the practice relies on the EHR “to flag risk gaps, accurately portray the risk of the patient, and help drive shared savings.” 

CareMore uses predictive analytic algorithms to risk-stratify patients. According to Jain, CareMore is also making use of other technology tools to enable more preventive care. “We have remote-monitoring capabilities for CHF, hypertension, and diabetes patients. And if you do need intervention, a change in medication, or an extra visit, we get alerts sent to us virtually.” 

Year over year, practices are aggregating and analyzing data, and using it to learn the most accurate ways to risk stratify, the outreach strategies that work best for each risk level, and the preventive care services that make the most difference. True success in value-based care is impossible to achieve without a significant technology component.  

Operationalizing it all 

Almost all value-based care practices have shifted to a team-based care model with extensive care management support, and all have regular care management meetings to plan outreach and care. But exactly what that looks like differs by practice.  

Jersey Coast hired a nurse practitioner to coordinate all the care management. She does outreach to all high-risk patients based on need and perceived stability, and determines if they should be seen every three months or every six months. She also handles same-day and sick appointments, increasing patient access and reducing urgent-care and emergency department visits, says Kronhaus.  

At DTC, the focus is on who can build a relationship that will allow them to be successful in caring for the patient, according to Dudley. To save clinician time, simple outreach begins with the medical assistant, “but escalates quickly if the MA can’t figure it out,” moving rapidly up the chain from MA to physician assistant to physician to prevent adverse outcomes. 

CareMore is organized around interdisciplinary teams of clinicians, and neighborhood-based care centers with disease management programs. The programs co-locate all the services patients are likely to need — “pharmacists who do medication management, dieticians, wound care specialists, nurse practitioners who titrate medicines” — everything chronically ill patients would need, according to Jain. And if a patient does need to be hospitalized, CareMore assigns an “extensivist” to coordinate all inpatient and post-discharge care and follow-up. 

The bottom line 

Value-based care can look very different and should be tailored to each practice’s size, patient population, care approach, geography, and more. But the journey to value-based care begins with a vision of the kind of care the practice wants to provide and a commitment to change. 

All practices, even small ones, can make the shift. In fact, Jersey Coast’s Kenneth Kronhaus believes small practices are better positioned to make changes on the fly, refining and improving their approach as they go along.  

But [practices] do need to understand what they need to be successful, and what the tradeoffs are going to be. “If you're really good at chronic care management, then you're actually cannibalizing your own business,” CareMore’s Jain points out. But, he says, “if you’re a health system, you've got to be measuring the health of the community, the extent to which you're keeping patients at home, not the extent to which you're filling beds. Healthcare leaders need to step back and say ‘we are a health organization, not a healthcare organization.’”