Success in Value-Based Care for Academic Medical Centers: 4 Key Strategies

January 12, 2016

At a recent forum, Seth Frazier, Evolent’s Chief Transformation Officer, presented our findings on value-based care for AMCs. Through our most recent work with our Academic Medical Center partners in five states, we have been able drive important clinical and economic benefits from their value-based strategies under a very specific set of conditions. They have:

  1. Leveraged the right financial vehicle
    • Started with health system employees (i.e., established a population to manage and capture full value of clinical improvements and in-system utilization opportunities. With multi-facility strategies, aggregating employees across participating health systems can enhance integration and provide an even greater covered-life base for scaled-operations through a common value-based services organization).

    • Pursued government programs to minimize risk to underlying commercial fee-for-service rates. Carefully considered the starting utilization as well as cost benchmarks for MSSP/Next Gen programs. Some low cost markets are actually high utilization markets suggesting hidden opportunity.

    • Pursued payer partnerships that evolved to two-sided risk with delegated CM and UM based on historic benchmarks.

    • Considered provider-sponsored health plans in the context of large vertically integrated networks.

  2. Built broad and well-structured networks
    • Partnered with community providers to achieve network adequacy, lower cost venues and sufficient scale.
    • Optimized network organizational form, taking into account the AMCs relative position within the market.
      • Created meaningful governance rights for network participants (i.e., real voice in clinical program design, distribution of physician incentives)
      • Considered opportunities to limit capital requirements for non-AMC network participants (e.g., AMC loans, dues-based membership model)
  3. Insulated AMC networks from high AMC cost structures
    • Pursued government programs (e.g., Medicare Shared Savings Program) where market rates are more consistent across providers; prioritized Next Generation ACO over Track 3 or Track 1 if:
      • Organization has experience managing downside risk
      • Risk Adjustment coding capabilities were in place
      • Organization had a high degree of confidence in its ability to motivate participating providers behind Next Generation ACO objectives
      • Next Gen discounts for high cost (both absolute and relative to regional benchmark) were not too punitive
    • Conducted capitation-based reconciliation to accommodate rate differences and potential volume shifts
  4. Established a high performing value-based operational core leveraging integrating technology
    • Created a separate, dedicated entity to manage the value-based business including care management, targeted quality metrics, network development, RAF, UM, network performance management, analytics and risk contracting.
    • Leveraged an integrating (as opposed to point solution) technology to drive the business that:
      • Provided a 360° view of patient through integrating clinical and claims data
      • Drove accurate stratification of high risk patients
      • Powered reliable, high impact care management workflow
      • Incorporated reporting on provider performance, care management performance and program effectiveness. Established feedback loop to enhance stratification and work flow.
      • Combined out of the box content with business level configurability
      • Integrated all value-based functions (Care Management, UM, RAF, Care Gaps, etc.)
    • Reframed early pilot successes into scalable operations

The transition to value poses real challenges both within an AMC and between an AMC and its community partners. Those that have been successful in the transition have found a way to thread the needle against these four dimensions to enhance quality, expand their networks, earn returns from their value business and drive appropriate in-system utilization. To learn more about partnering with Evolent Health to achieve a successful transition to value-based care, please contact partner@evolenthealth.com.  

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