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Value-Based Care Stack Part II
How Value-as-a-Service vendors are lowering health care costs!
Value-based care is not easy - when I started writing about value-based care enablers, I quickly realized: I would never get all of them into a single post. So I split it into two, and this is part II. In my previous article, I wrote about how different companies support the setup of value-based care contracting entities and how analytics vendors are helping with identifying subpopulations and their savings potential. Now that an organization is ready to take on risk and knows what to do, they are prepared to act and serve their patients with high-value care.
That is easier said than done. Especially in the reality that many value-based care organizations operate in. Let's have a look, for example, at Medicare Shared Savings Program ACOs. In many cases, they are a loose collective of physicians and care providers that agree on implementing certain programs or technology investments to realize savings and better outcomes.
However, there are quite a few challenges that make this goal hard to achieve:
Lack of incentives: How much revenue do saving initiatives really bring for each ACO member? ACOs usually do not have much executive power over their members in what things to do or not to do. They must convince their members that a particular savings initiative is worth implementing. If a practice only has 10% Fee-For-Service Medicare patients (vs. Medicare Advantage patients and commercial patients) they are most likely not willing to make any far-reaching investments into new care protocols, retraining staff, or adopting new technologies. If the overall incentive for realizing savings is small, i.e., maybe $30k per physician per year, they won't make significant changes.
Lack of resources: Even for successful ACOs who realize annual savings and pay out a bonus, there is not a lot of wiggle room. Investments pay off only after a while and are uncertain; therefore, solutions need to have quite some clear ROI and scope. There is not a lot of experimentation budget, especially with the current condition of the capital markets (June 2022).
Competing interests with their members: As always in health care, many competing incentives make decisions more complex. These competing incentives are especially prevalent in hospital-led ACOs - for example. They might choose not to implement specific savings programs, as they would cannibalize revenue from their other divisions. For example, the hospital CFO would not want their ACO to send patients to providers outside their health system's network even if they would be more cost effective.
To succeed, the value-based care movement will need to overcome these challenges. A significant driver here is new products that help value-based care organizations look beyond the low hanging fruit and that help them realize savings, providing them with a clear ROI. Several vendors are trying to enable value-based care organizations to realize savings easily. Today, I want to look at them in the following categories:
Provider enablement - help the provider do what the data suggests
Patient engagement - help the patient do what the data suggests
Population programs - take care of a specific sub-population
Provider Enablement: help provider change their workflows
As I mentioned in the first part, analytics provides the foundation for value-based care. Analyzing EHR and claims data can identify populations and specific patients that need certain actions. But analytics needs to be actioned, and insights need to be leveraged by providers in their day-to-day clinical operations. Here is how different solutions are trying to solve this problem and enable physicians:
Point-of-care solutions: Several companies integrate with a provider's EHR to produce actionable insights during a visit. These tools surface the "most valuable" action a physician can take for a particular patient, given their medical record. These actions can include ordering a preventative screening, ensuring risk factors are appropriately captured, or, if the patient qualifies, they are assigned to special subpopulation programs, like chronic-kidney disease or hypertension programs. Examples of point-of-care solutions are Vim and Affirm Health. Modern EHR systems like Elation or Canvas can integrate this logic into the physician's interface without the physician having to change tabs, which further reduces the friction.
Incentive-based solutions: Some point-of-care solutions are taking it one step further. They not only surface the most valuable next-action but also reward the (attending) physician with a financial incentive. Quantifying the impact of a physician's decisions in a value-based care context can help drive awareness of the economic consequences their actions can take. Leading solutions include Stellar health and the Clover assistant, who reimburse providers based on their value-generating actions.
E-Consults: Primary care is often not much more than a triage in which the doctor decides which specialist they should send the patient to. They are taking on a much more prominent role in the value-based care paradigm. As specialist visits are expensive, value-based care providers are trying to equip their primary care doctors with the knowledge to take care of increasingly complex patients. E-Consult platforms, such as Sitka or RubiconMD, are an excellent way for primary care doctors to connect with specialists and get their advice on the next treatment steps or whether a specialist referral is actually necessary.
Referral workflow solutions: There are many non-trivial workflows in the value-based care paradigm where practices could use additional support. Great examples are outbound referrals or care transitions from one facility to another. Several companies are trying to make the hand-off between organizations easier. They allow physicians or front desk staff to triage the appropriate & cost-effective provider for their patient, transfer the patient with all the required medical records to the specialist, track the scheduling of the visit and close the referral loop. Examples here include Par8o, ReferWell, ReferralMD, and Preferwell (acquired by AristaMD).
Training & Education: Last but not least - provider buy-in and understanding of how value-based payment models affect their clinical outcomes and practice's bottom line is vital for any value-based arrangement to work. If providers are not changing their behavior, either out of lack of incentives or lack of knowledge and understanding, nothing will change. I have not seen any provider education companies here focussing on education and training, but I am sure there is a significant need for those.
One last thought on provider enablement: It's worth noting the different business models - some players are getting paid by the health plan (Stellar), and others are getting paid by the provider group (Affirm). As payers and providers have, in general, aligned incentives in a value-based model, however, given the patient mix of the provider, there can be differences in terms of adoption.
Patient Engagement: get the patient to do things
Doctors can only do so much to make their patients healthy. The patient's actions (or in-actions) play an enormous role in their treatment success and overall health. Engaging patients is an important activity for many value-based care organizations. Not only to detect unmanaged chronic conditions early but also to get their annual risk adjustment done. There are different channels for providers to engage with their patients:
Digital Patient experience: Digital patient outreach via e-mail, apps, text, or web portals is critical for providers to activate their population. Many people dismiss the effectiveness of digital channels for Medicare beneficiaries, who comprise most of the value-based care population. When listening to the Twitter crowd, one could think that 65+ are unable to use a smartphone or the internet. I believe this is a great myth! The share of people over 65 regularly using smartphones is increasing every month. 61% own a smartphone, and 45% are on social media. However, digital patient engagement tools need to be designed appropriately. For example, ensure that larger fonts in your mobile app do not result in endless scrolling. Lena, for instance, is successfully activating their Medicare members through a text-based chatbot, helps them set up appointments, and gives them helpful information about their patient journey.
In-person Community engagement: With COVID cases falling, in-person engagement is making a comeback - to engage with patients, you have to meet them where they are, which is often in public, in their community. Cano health, for example, a value-based care provider in Florida, strategically selected their provider office locations in shopping malls and community centers frequented by their target population. These locations make it much easier for them to stop by their practice when needed. Another interesting approach is to engage patients at their barber shop or wherever they are in their community (churches, bingo events, etc.). Life Chair is a new Medicaid-focused company in this space.
Home visits: The patient's home is another essential space for patient engagement. If patients are too frail or it is inconvenient to come into their doctor's office, the value-based care organization might choose to visit their patient at their home for particular exams and treatment. A big player in the value-based home health space is Signify Health. Although recently, there has been some criticism around the practice of home health providers around risk adjustment - they would visit the patient to get a diagnosis code, but they won't provide much value add beyond that for the patient.
Remove barriers: Last but not least - you can engage your patient as much as you want, but as long as certain barriers keep them from scheduling a visit or following their treatment plan, you won't help them get better. That's why value-based care organizations focus on removing some of these barriers. This includes transport services to and from doctor appointments, child care during hospitalizations, access to food, etc. United Us is a great player here that addresses social needs and connects patients with social organizations in their community to improve their health and access to care.
Population Programs: Target specific patients
Several vendors specialize in initiatives for a specific subpopulation and offer this out-of-the-box service to risk-bearing organizations. They would use analytics (as mentioned in part one) to identify a population for which they can provide specific interventions. Here are a few great examples:
Post-Acute-Follow-up care: A "low-hanging" fruit for cost reductions are avoidable readmissions. Strong evidence supports that a follow-up visit with a primary care doctor within 14 days of hospitalization can significantly reduce the likelihood of a readmission. This is a common use case many ACOs are focussing their resources on. Ready Responders and Signify health have products that send a primary care provider to the patient's home as a follow-up visit.
Medication Management: Proper, holistic medication management is another compelling use case that can lead to value. Companies like Upstream and Lumi help value-based care providers conduct in-depth medication reviews for their patients and adjust their medications to the proper levels.
Subcapitation for specific populations: Certain costly patients warrant special attention by dedicated care programs. Some VBC organizations are developing their population health programs, while others partner with specialist providers to care for a specific subpopulation. Examples are Cricket & Strive for patients with kidney disease or Cityblock for patients with multiple chronic conditions. Aledade also recently launched its Care Solutions business, which helps its physician members take care of sick patients.
These "subpopulation" vendors are not always selling to the care provider but can also work with the health plans. This makes sense for ACOs with fewer resources that don't have the time to assign their members to the dedicated program.
Food for Thought
Value-based care is not an easy feat, and even with all these vendors helping, it requires excellent management and people to orchestrate all these solutions successfully. Here are some of my thoughts:
Don't two-class doctors or software: From most of my conversations with physicians, I learned that doctors don't like to have different treatment plans for different health plan populations. When they purchase a new software tool, they want it to work across all of their patients. Adjusting their toolkit to each person based on their payer is another thing that occupies their already busy brain space. You can solve this problem in two ways: either you provide software and tools that are payer/ population agnostic and that provides value for any patient (or a sufficiently large group of patients). Alternatively, you have physicians/ practices focus on specific populations - that's why I firmly believe Medicare-only ACOs will succeed in their quest to improve patient outcomes and lower costs. They will have the focus required to tackle all the challenges mentioned.
Where are the microservices?: Reviewing so many vendors in this space, it is interesting how much overlap there is in the marketing messages and features of the different solutions. The software engineer in me is complaining: "Everyone is trying to be a monolith. Where are the microservices?" For those of my readers who don't know what that means, here is a quick definition:
Microservices - also known as the microservice architecture - is an architectural style that structures an application (= care delivery) as a collection of services (= software tools) that are
Highly maintainable and testable
The microservice architecture enables the rapid, frequent, and reliable delivery of large, complex applications (= patient journey). It also allows an organization to evolve its technology stack.
I wish more vendors would focus on what they are good at, really focus on their strengths and solve the problem, and build robust APIs or easy-to-deploy integrations with other services. This would allow providers to mix and match their care stack to their needs. Given the lack of engineering resources in many provider organizations, I understand that there is a market pull for monolithic, one-vendor solutions, but this leaves us with many jack-of-all trades and few jackknives.
Adjudication & Subcapitation: Every vendor in the value-based care space seems to pursue the business model of shared risk (vs. a SaaS fee or enterprise contract). From a business point of view, this makes sense, as this is a great way to capture a part of the value they are creating. However, this makes attribution a nightmare when more than 2 or 3 solutions are deployed simultaneously. For example, what if a person has kidney disease and diabetes and is enrolled to Strive and Omada at the same time? How will you figure out capitation and saving attributions? And what if that person then has a hospital visit where a third vendor is providing follow-up care? This becomes quite a complex problem without strict separation on a population level. Even if you can separate populations, managing several subpopulation providers as a provider organization can be quite daunting and organizations might not be ready for it.
With the growth of value-based care payment models new problems and opportunities for new products are arising, and even existing solutions are ripe for disruption with well focused products. If you are a risk bearing entity evaluating new vendors or a startup building in this space - let’s chat!