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Value-Based Care May Fund Our Field No Better Than a Fee-For-Service Model
Plans for value-based care (VBC) to replace fee-for-service care are still largely unrealized. Progress has been especially slow in behavioral healthcare, but enthusiasm remains strong. This may relate more to disdain for the status quo than any evidence VBC will improve our healthcare funding. There are no guarantees of adequate funding for behavioral care in the VBC model.
VBC broadly entails healthcare providers assuming financial risk while earning incentives for outcomes. It is a broad category with varying levels of complexity. For example, the VBC model is readily applied to behavioral programs of fixed duration and cost—payers may negotiate rates with no upside risk (UR) and have incentives tied to quality metrics. The VBC model is less straightforward for general outpatient care.
The challenge of fitting outpatient care into VBC contracts starts with the risk-bearing entity. Multiple specialties may be funded by the VBC payer, with behavioral care as one piece of the puzzle. Health systems (or VBC payers) may or may not want a robust behavioral network. Skeletal networks are attractive for cost control. VBC payers might want to prioritize containing behavioral costs above all else.
A Tale of 2 Corporations
Contracting is a 2-way street. Are behavioral companies negotiating favorable VBC contracts? We don’t know because negotiations are usually private. In terms of media reporting, most attention goes to mergers and acquisitions. We can find important clues in this M&A activity about what big health plans and health systems are thinking. Many prefer owning behavioral resources, not contracting for them.
What can we learn from 2 national companies focused on outpatient care, Refresh Mental Health and LifeStance Health? Refresh was acquired by Optum (i.e., UnitedHealth) in 2022 when it was operating in 300 locations across 37 states. LifeStance is an independent, publicly traded company with 600 behavioral group practice locations and approximately 6000 clinicians. What can we learn about VBC from them?
Refresh fits into UnitedHealth’s growing multi-specialty provider system. It is the largest employer of physicians in the country. As United/Optum implements VBC contracts, it will own and direct Refresh’s behavioral resources.
LifeStance wants integrated care contracts as well, but recent investor calls and its latest deals suggest only traditional contracting. For example, a new women’s health contract has no VBC hallmarks as it establishes typical referral relationships with physical health providers. Their focus seems mainly on adding clinicians for in-person and virtual care.
If VBC is the future vehicle for financing our field, independent companies like LifeStance may have little negotiating expertise. Health plans and health systems are acquiring our clinicians to service comprehensive contracts. A good model for independent behavioral contracting is lacking. We might best be served by relying on behavioral executives able to think innovatively about care delivery.
Expect CFOs to Minimize Our Clinical Value
Contract negotiations are often driven by 2 factors, the strength of one’s case and one’s power of persuasion. Our field has a good case but little power. Too many policy experts today are positive about VBC simply because it is a departure from discounted network rates. However, to repeat, VBC may fund behavioral health no better than fee-for-service care.
A part of this dilemma is utilization. The case for our participation in VBC likely includes the idea we will positively impact physical health outcomes and costs. This may hold little sway with risk-bearing entities. Why? Entities focused on total healthcare costs may simply prefer the guarantee of lower healthcare costs due to lower behavioral utilization. This is more certain than the promises of integrated care.
Behavioral leaders might be surprised by how crudely integration is understood by some leaders controlling VBC contracts. Healthcare leaders managing risk may care little about the presumed inseparability of mind and body or the nuances of integration. Putting a few behavioral providers in a medical setting “checks the box” if their top priority is to keep healthcare and administrative costs low.
Cultivate Your Secret Weapon
VBC is likely the wave of the future regardless of any misgivings expressed here. Making VBC work for our field will not be easy. We will have to fight for equitable rates, insist on building networks that scale to the size of the population, and promote primary care integration models that maximize health and cost outcomes. It can only be done if we have persuasive negotiators able to manage uphill battles.
While we may face some narrow-minded negotiators, behavioral care is the missing piece in many systems of care. Our contracting leverage is that physicians increasingly realize behavior drives health. We are needed both as a separate specialty and as part of primary care. Let us show payers our resolve to achieve funding levels on par with our clinical value.
This will not be achieved with statistics. Our best weapon is a physician leader, likely a PCP, who values expertise in behavior change. Such a person understands the depth of behavioral needs in healthcare. This is the secret weapon needed by behavioral executives in VBC negotiations. Payers believe their own experts more than behavioral ones. Start cultivating such a pivotal thought leader for your negotiations.
Ed Jones, PhD is currently with ERJ Consulting, LLC and previously served as president at ValueOptions and chief clinical officer at PacifiCare Behavioral Health.
The views expressed in Perspectives are solely those of the author and do not necessarily reflect the views of Behavioral Healthcare Executive, the Psychiatry & Behavioral Health Learning Network, or other Network authors. Perspectives entries are not medical advice.
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Editor's note: This article was updated on June 19, 2023, to change the listed number of clinicians employed by LifeStance Health.
