Why The Next Three Months Is Your Window To Move To Value-Based Care

“Rapid change” and “outcomes before profits”: two phrases rarely used to describe the U.S. healthcare system. But the pandemic has required the healthcare community to change its axis. It has required it to consider the whole patient’s needs and not just the medical. To prioritize patient convenience and engagement. To prevent rather than wait to treat. The pandemic caused us to focus more on doing what makes sense for the patient instead of optimizing for reimbursement.

As we begin to ease out of the pandemic, providers and payers risk returning to their old and stodgy ways. They should instead leverage the pandemic’s lessons and the aura of open-minded change it generated to build momentum toward a different model of care, one centered on value-based principles and more equipped to deal with social determinants of health and address health inequities. But before I underscore the case for value (and highlight some actions you can take right immediately), let’s briefly review some of the promising developments over the past year.

Here are a few of the “silver linings” in healthcare induced by the pandemic:

  • Hospitals and health systems collaborated daily with public health
  • Home-based and virtual care flourished, enabled by state and federal payment and regulatory changes
  • Health inequities were tracked to sub-populations and public health messaging was deployed to address behaviors in culturally-specific ways
  • Payers and providers reached out to members and patients to give them what they needed most, including food, transportation, sanitation supplies, social isolation support, services not stated in benefit plans or with a reimbursement code

The speed at which these changes took place was astounding. The healthcare industry has a well-deserved reputation for glacial change. But in the last 12 months, we have seen an acceleration of advancements many health reformists have sought for years with nominal progress. And now we have evidence that these reforms can work!

Our dominant method of paying on a fee-for-service is structured to resist such quick pivots, which is partly why it took a pandemic to see them realized at scale. In fee-for-service, treatment is valued more than prevention and high intensity services are rewarded more than lower ones, even if the outcomes are the same. The pandemic, however, showed that fee-for-service is not only inflexible for dynamic needs, but also unreliable. And here is where I return to value.

Many of the provider groups that fared best under the pandemic were delivering care under pre-determined value-based payments. Whereas many traditionally compensated physicians saw revenue plummet during the pandemic as their patients avoided medical facilities, providers under value contracts sustained their revenue and were financially incentivized to jump into preventative activities. And they already had the tools and infrastructure to do it. They were equipped with data to identify high-risk patients, telehealth platforms, and care teams ready to deliver the medical and social services their patients needed most. I even heard of a team member at a value-oriented provider organization delivering toilet paper to a patient!

Now that the world has experienced the advantages of value-based care, will providers and payers flock to it in the impending “new normal”? I fear that despite knowing it’s a better way, they don’t. Not unless they take action right now. The pandemic is ending faster than many of us expected. In our March 2021 paper (linked here), we projected a 40% likelihood that herd immunity would be reached by July, despite a growth of variants. We have recently adjusted our model due to the effectiveness of even one dose of Pfizer and Moderna vaccines and the Johnson & Johnson vaccine (despite setbacks), and we now anticipate a significantly higher chance of meeting that benchmark. But that means the emotional motivation of these great lessons may soon become a faded memory. And changes in healthcare do not come without full, intentional effort.

These two factors—the gravitational pull of the old ways and the relatively quick dethaw of the limitations COVID-19 has imposed—means that providers and payers wanting someday to pursue value to proactively bolster and accelerate change right now. If you want to orient your organization to a world of value, this is the time to act, while the inertia of people and old structures has been temporarily disrupted.

This is likely not the time for rolling out new major initiatives. People are still stretched and exhausted. But what can you do now, in the next few months, that will have a lasting change?

  1. Revisit your mission statement. Revise it with the lessons of the day. Is your organization committed to doing truly what is best for the patient, both medically and financially?
  2. Collect and analyze data. Quantify what you learned during the pandemic. What happened to your revenue? What would have happened if under value-based care contracts? Collect the data to demonstrate that there is a better way.
  3. Get the perspective of employees, patients, and customers. Measure the willingness for something new. Conduct surveys and focus groups. Find out from your staff, patients, and even board members what could have gone better and provide education on what a value-oriented system would look like.
  4. Talk with your partners about the future. Many providers and their commercial payers have been through a war together and are more trusting than ever. While the goodwill is high, discuss ways in which you can work in more collaborative ways to advance value.

Patients, partners, employees, and boards are at their most openminded state to consider a new way of delivering care. Where you have found dead ends in the past, you may now find wind at your back. If ever there was a time to start or accelerate your move to value, this is it.

Leavitt Partners works with payer and health system executive teams to build out their value strategies. This includes evaluating the tools, people, and other resources needed to successfully execute a strategy. Contact Us to start a conversation around how we can help your organization transform to value.