Making Contract Management Work in a Value-Based Care Environment

Value-based care (VBC) models aim improve clinical outcomes and reduce health care costs by proactively focusing on patient wellness. To make this preventive approach to individual and population care work, patients, providers, payers, and other stakeholders, such as community-based organizations (CBOs) that offer wellness-related services, must be able to collaborate.

For providers, the benefits of VBC models are that they emphasize preventive care and better management of chronic conditions, which results in a healthier overall population and a reduction in health care costs. Chronic conditions such as Alzheimer disease, cancer, diabetes, and heart disease account for 90% of health care costs in the US, according to the Centers for Disease Control and Prevention (CDC).

But providers need effective contract management, including payment capabilities, across all entities in the network to get the most from VBC models. Merely replicating how they have historically managed volume-based fee-for-service (FFS) contracts doesn’t work because FFS models are fundamentally different than VBC contracts in terms of how reimbursements are determined and made.

A VBC network simply cannot succeed for stakeholders without transparency around payments. The FFS claim-adjudication system used historically by providers and payers is not up to the task of navigating the complexities, scale, and many-to-many hierarchical relationships inherent in a “network of networks” that is part of a VBC environment. Transparency ensures a shared understanding and clarity around what performance metrics are being measured, how they are measured, and the terms of the VBC contract (which outlines how stakeholders are paid).

Analytics and Actionable Insights

To gain insights into performance under a particular contract, providers require a scalable analytics platform that can collect and synthesize data, including unstructured data, which accounts for 80% of all health care data, from disparate sources. Using this information, providers can conduct a clear, risk-based analysis of patient populations and their various cohorts covered under a contract model. Questions for which providers should seek answers in the data include:

• What does our overall population look like?
• What are our referral patterns?
• Which cohorts should we analyze?
• Who are the individuals considered polychronic and high-touch within those cohorts?

Enabling these kinds of actionable insights, however, requires a scalable, interactive platform that can process and digitize disparate data sets, allow users to model and build contracts using an easy navigation workflow, and allow sensitivity analysis for different outcomes.

The first step for providers in VBC contract management is to ingest, digitize, categorize, and store relevant patient data that impact risk. These include electronic health records (EHR), pharmacy records, demographic information, and social determinants of health (SDOH) data.

Modeling VBC Contracts

This structured data can be analyzed and used by providers to compile a longitudinal health record that is fed into a contract modeler powered by a rules-based engine and query-building capabilities. The modeler conducts a comparative analysis of different VBC models to inform the contract-building software, which can create contracts based on different use cases and scenarios.

Providers can store contracts in a digital library for easy reference and modification as they engage in more VBC arrangements. A smart contract library is a valuable resource for quickly accessing past performance metrics, exploring “what-if” scenarios, and facilitating rapid deployment of codified business rules for multiple stakeholders.

After a provider creates a contract through the data modeling process, the digital document can be distributed to all relevant parties for review and approval. Sign-off requires all stakeholders to understand and acknowledge terms of the VBC contract, including performance metrics and reimbursement amounts. This type of approval workflow, similar to software tools such as DocuSign, ensures complete transparency, auditability and compliance because different iterations can be versioned and tracked. Mutual clarity and understanding are necessary to the success of a VBC program.

Leveraging a powerful analytics platform with structured data paves the way for providers to perform risk stratification by analyzing different types of patients and the risks they carry. This allows for benchmarking and comparisons regarding overall cost and utilization. Providers also can use analytics to assess opportunity and “what-if” scenarios, as well as ad-hoc reporting.

Network Optimization

A key consideration for providers working to succeed under a VBC contract is understanding where referrals are going and the magnitude of leakage. Providers will have to optimize referrals to reduce leakage and control costs, while also ensuring access to care. This optimization allows for better control of spending patterns and efficient coordination of care—leading to better patient outcomes and satisfaction.

Though legacy infrastructures have been adequate for providers engaged in FFS contracts, they are unable to support a many-to-many network with multiple stakeholders. Further, supporting the hierarchical structures of multiple reimbursement models—not only FFS and VBC, but pay for performance and other alternative payment approaches—requires a cloud-based infrastructure able to segment contractual nuances while reporting outcomes and overall financial performance in a timely manner.

Conclusion

The success of VBC initiatives in attaining operational efficiency and meeting performance goals rests on a scalable digital infrastructure able to handle multiple reimbursement models (including FFS) and facilitate multiple payment streams across a network of networks. Such a digital infrastructure should enable multiple stakeholders, such as provider organizations, payers, social service agencies, and CBOs.

By combining powerful analytics with strong operational capabilities on top of a scalable digital infrastructure, providers can create a data and networking framework that drives the success of VBC contracts and improves network performance.