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Deloitte's Life Sciences & Health Care Blog

Taking the temperature of value-based care: A healthy transition?

“I am in favor of progress; it’s change I don’t like.” Attributed to Mark Twain.

Twain wasn’t a doctor, but he could be speaking for countless physicians who – faced with a growing emphasis on measuring and reimbursing for value rather than volume – may still be a little uncertain about the shifting new world of health care. So far for most, their journey to value-based care has been an uneven ride. While some physicians are starting to embrace alternative payment models, many remain concerned about compensation, financial risk, and developing relationships with other stakeholders that effectively meet new industry demands.

Those issues were top of mind at Health Data Management’s recent “Best Practices in Value-Based Care” conference in Dallas, attended by executives and administrators across the spectrum of physicians, hospitals, health plans, and life sciences companies.

My key takeaways were:
• Innovation is real and occurring across the industry.
• Some industry leaders are ahead of others and experiencing positive results.
• Data, tools, and technology are in great demand to enable effective value-based care.
• Effective value-based care can’t happen in silos – to get to future success, collaboration across the industry is crucial.

Increasingly, many health care providers are innovating: Physician groups are working directly with payers, hospitals are partnering with post-acute care providers, and all are looking for ways to better collaborate with pharma and medtech companies.

One particular innovative group featured during the conference was Oak Street Health, a physician group that is financially-backed by venture capital investment and is opening clinics in lower-income urban communities. By taking on capitated payments with full financial risk for a Medicare Advantage population, Oak Street Health focuses on their health and well-being. The care delivery model includes social workers, care coordinators, and support staff to help build strong relationships with patients and their families. Patients also have the opportunity to use door-to-door transportation options for their appointments. With this model, Oak Street Health has been successful in lowering both admissions and readmissions at local hospitals for their patients.

Another innovative medical group is a clinically integrated network (CIN) Catalyst Healthcare. StratiFi Health, the managing entity of Catalyst Healthcare, is an organization that enables independent physicians to remain independent while offering them resources and tools to partner with major payers and practice value-based care. Catalyst Healthcare is now partnering with Blue Cross Blue Shield of Texas for a physician-led accountable care organization (ACO) finding success with reducing readmissions, cutting the cost of care, and improving outcomes.

While we’re seeing success and innovation with value-based care, many physicians face challenges with its adoption, as found in our newly released Deloitte 2016 Survey of US Physicians. Many physicians agree with value-based care in concept, but they’re not yet being financially incentivized to see the benefits. In our survey, 86 percent of physicians reported being compensated under fee-for-service (FFS) or salary arrangements.

Some hesitance is about risk exposure. How physicians are compensated, and how much financial risk for care delivery they must absorb, are key considerations that will likely need to be resolved within this model. And unfortunately, tools and capabilities to support value-based care are still in short supply for many physicians. Our survey found that while three in four physicians have clinical protocols, only 36 percent have access to comprehensive protocols (i.e., for many conditions). Also, only 20 percent of physicians receive data on care costs.

As the innovative examples of value-based care in action show, there can be successes through efforts led by physicians and organizations partnering with physicians. Our survey suggests that other industry stakeholders – and physician organizations themselves – can effectively work with individual physicians for value-based care. They should partner with physicians and consider the following:

• Link physician compensation to performance.
• Give doctors the proper resources to meet performance goals.
• Invest in technology that can bring change to life.

In the vein of another quote often attributed to Mark Twain, “the secret of getting ahead is getting started.” Applying these three objectives in building a superior value-based model may be a pretty good place to start.

Author bio

Wendy is an experienced research, eminence, strategy, and health care professional. In her role at the Center for Health Solutions, she conducts primary and secondary research to understand marketplace trends. Her focus is with Health Care Providers. Prior to joining Deloitte, Wendy worked in various roles of increasing responsibility in strategy, planning, and business development at a health system. She also previously worked in research at a health care industry information solutions organization. Wendy holds a BBA from the University of Michigan and an MA in Health Policy from Northwestern University.