Looking beyond the financials to create health care value

Value-based care goes beyond financials

For years, using financial incentives with care providers has been one of the primary ways our health care system has tried to reduce spending and improve health, and those incentives have largely been two-dimensional: one set of rewards for improving quality, and another set of rewards for lowering costs. 

However, a new Harvard study reveals the industry may be overlooking a key third dimension – the non-financial incentives known as “infrastructure supports.”

These incentive-based models are known today as value-based care (VBC) and this approach plays a crucial role in the long-term sustainability of U.S. health care because it shifts the focus of how we coordinate and pay for people’s care to actual outcomes rather than how many tests or procedures are done.

Dr. Alyna Chien of Harvard Medical School and Professor Meredith Rosenthal of the Harvard School of Public Health explored this third dimension of infrastructure supports and the role they play in VBC programs in their study, “A 3D Model for Value-Based Care.”  

Care providers commonly receive infrastructure supports from payers, and it may include things like data sharing, technical assistance and training, and access to care management tools. When care providers were interviewed about the study, they all agreed that financial incentives are helpful, but are only half the story. Being able to effectively transition from a fee-for-service model, based on the volume of services delivered, to a value-based model, focused on patients’ health outcomes, requires care providers and payers to work together in new ways.  

“This issue is not whether financial incentives work, but rather what else needs to be in place in addition to the financial incentives to support the change process going on inside the organization,” said Niyum Gandhi, executive vice president and chief population health officer, Mount Sinai Health System in New York.

Harvard’s research evaluated six different types of infrastructure supports and how often they were being used in VBC programs:

  1. Analyzed data or reports on spending, quality and key measures (92% of programs)
  2. Technical assistance to help build new capacities including training, consultants, knowledge sharing and learning collaboratives (83%) 
  3. Raw, unanalyzed administrative and claims-based data (63%)
  4. Infrastructure payments in the form of in-kind financial supports not based on performance (50%)
  5. Risk management support to protect participants from large losses (33%)
  6. Access to care management support, such as personnel or tools to assist with patient care and coordination (29%)

Researchers then used this data on the prevalence of infrastructure supports to create a 3D model that illustrates the strongest combination of quality incentives, spending reduction incentives and infrastructure supports for effective VBC programs.

Based on this review, Harvard has five recommendations for care providers and payers to help accelerate the impact and adoption of value-based programs:

  1. Use the full 3D model to design VBC programs – do not rely on financial incentives alone.
  2. Build stronger payer-provider relationships based on organizational alignment and data sharing.
  3. Align how VBC is measured across different payers – there is too much inconsistency today.
  4. Increase the share of provider reimbursements tied to value-based payments to create more shared risk.
  5. Better align individual physician incentives with the value-based contract incentives negotiated by their leadership.

Harvard’s research ultimately reinforced that moving to value-based care is not a simple change in the contract, but rather a wholesale shift in culture and mindset that is not possible without close partnerships between payers and care providers.

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