September 21 2017 | 0 Comments | 168 reads Average Rating: 3

Making It Real: 5 Practical Contract Considerations in a Value-Based World

by David Hom and Dr. Kevin Keck in Health Analytics

Value based care – where healthcare providers are paid for the quality of care outcomes achieved not merely the volume of services delivered – is finally coming to fruition and becoming a reality across healthcare. Payers and providers are rapidly entering into outcomes based contracts that directly support the industry’s much coveted triple aim: improved care, enhanced patient experiences and reduced costs.

However, such contracts don’t need to be pompous academic tomes. Instead, they should be simple, understandable and doable. Here are 5 practical considerations to take into account:

1. Include easy-to-grasp directives. Strategies outlined in contracts need to be simple enough for physicians, charge nurses, administrators and others to understand and explain them. For example, the strategy should not state that “lung cancer patients should live two years if we treat them.” Instead, the contract should focus on something more specific such as requiring providers to deliver ionizing radiation on diagnostic imaging of the brain.

2. Realign compensation for employed physicians and owned practices. To change physician behavior that supports better care outcomes and patient experiences, compensation needs to be aligned around patient outcomes. This means payments should be directly tied to such changes. For example, if providers need to perform about four hours of work to produce better outcomes or improved patient satisfaction, then the contract should link a targeted payment, such as a $1,000 bonus, to cover this behavior change.

3. Be capable of change over time. As value-based care programs mature, contracts need to mature as well. For example, as value-based care becomes the dominant form of care delivery, contracts should start to link a more significant portion of physician income, say 40%, to encourage the behavior change needed to support the new model. Overall, value-based contracts need to have the ability to expand and subtract various elements – as they strive to ultimately raise the performance bar over time.

4. Call for the use of data to empower success. Providers must be provided with pristine data that can be relied on to provide a 360-degree view of patients that can be used to manage both clinical and financial risk, impactability and gaps in care.

5. Require the use of advanced analytics to deliver insight into high value-opportunities. By employing predictive and prescriptive analytics, healthcare organizations can determine where interventions will have the greatest impact; what conditions and subsequent intervention represents the highest opportunity value; who is at risk to undergo avoidable surgeries; and which programs will have the most significant impact on members or patients. For example, analytics can be leveraged to predict if a patient is on a pathway to require a spine surgery. If the patient is on this path, providers can prescribe interventions and work with the patient to avoid the surgery. They might enroll the patient in a medical back clinic or physical therapy program that could nullify the need for the surgery. As such, they could use this insight to provide effective care at reduced cost – and succeed under the value-based metrics of the contract.

These are just a few best practices that could lead to value based contract success for both providers and payers.

To learn more about succeeding under value-based agreements, check out our Webinar entitled Outcomes-Based Contracting: Empowering Providers to Create Tailwinds during Paradigm Shift.

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Author
David Hom
Chief Evangelist

Dave is an internationally-recognized expert in the field of consumer engagement through programs such as Value Based Benefits and Employee Wellness.

Read full profile and other posts |

Author
Dr. Kevin Keck
Chief Medical Officer

Dr. Keck is SCIO’s Chief Medical Officer and leads the Clinical Analytics development team. His responsibilities include assessing the leakage and the impact of quality and cost in Provider Analytics.

Read full profile and other posts |

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