Value-based care models: Common traps to avoid and setting up for success

During a May Becker's Hospital Review webinar sponsored by HOPCo, Wael Barsoum, MD, the company's president and chief transformation officer, shared insights about the most common reasons VBC models fail and how organizations interested in implementing these models can reconceptualize them. 

Four key insights:

1. The need for VBC models that deliver savings is evident. U.S. healthcare expenditures are on an unsustainable path. There is a pressing need for vertically integrated platforms and capabilities that drive alignment between providers and payers via shared risk and savings.
   
   Value-based entities and models that embody the goal of integration include accountable care organizations (ACOs), clinically integrated networks (CINs) and bundled payments for care improvement (BPCIs).
   
   
2. Value-based models have common characteristics that explain their failures. Although these models have the potential to generate savings while also improving health outcomes, many have failed. Dr. Barsoum said the most common reasons are:
   • ACOs: ACOs did not have enough enrolled lives to take on risk, which increased the effect of variability within the total amount of risk and the probability that "you might win big, but you also might lose big," Dr. Barsoum said. The other reason ACOs have historically failed is they take downside risk.
     
     
   • CINs: CINs faced high barriers of implementation, including lack of access to high-quality data, lack of interoperability, lack of trust between clinicians and lack of collaboration between the finance, quality and other committees that oversee CINs. The other reason CINs typically fail is setting up a CIN requires considerable time and resources.
     
     
   • BPCIs: BPCIs did not enroll enough patients because the entry criteria were too strict, the providers overestimated the potential number of enrollees, patient classification and definitions around what services were included are too complex or there was a lack of clarity around distribution of financial rewards.
     
     
3. Downward pressure on costs further explains many of these failures. Another common thread among failed VBC models is a downward pressure on costs, which generates a "race to the bottom" because of cost-cutting being perceived as the predominant lever. "If you tie your value-based program to cost in a fee-for-service-heavy model, the likelihood of seeing success ... becomes minimal," Dr. Barsoum said.
   
   However, that perception may be misleading. "The driver ought to build something consistent, transferable, successful and based on quality — and you will find that the cost follows in a decreasing fashion as quality goes up," he added.
   
   
4. A broader focus and solid data infrastructure can reframe the VBC focus. Organizations can direct their focus on quality without losing sight of costs by broadening their understanding of the scope of opportunities that exist to achieve shared savings. For example, instead of concentrating efforts and resources on episodic care — the traditional focus of bundles — they can look at opportunities to improve quality across the continuum of care.
   
   Similarly, organizations ought to reinforce their data infrastructure so they can allow for appropriate data collection, analytics, reproducibility of clinical performance and results — and, ultimately, evidence-based management of VBC or population health models.

To view the full webinar, click here.

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