Building and maintaining successful value-based care arrangements is difficult and will require innovative thinking from leaders across the healthcare spectrum, according to Aetna's Southeast region president, Rich Weiss.
Mr. Weiss has worked in healthcare for more than 30 years and now oversees Aetna's operations across Mississippi, Alabama, Tennessee, Georgia, Florida, Arkansas, Louisiana, Virginia, Maryland, North Carolina and South Carolina.
He sat down with Becker's to share the building blocks of successful value-based care models and what payers can do to encourage more of them alongside providers.
Question: How do you and Aetna define a value-based care arrangement?
Rich Weiss: I'd say it's very hard to actually define what value is. It's more of how the system operates, the care that people get, and ultimately the results that we get from the system.
My personal opinion is that value is determined by better outcomes and having healthier patients, and patients being satisfied with their care and the interactions they have with providers. When there's more collaboration amongst providers to ensure seamless care for people, that's where the true value comes in.
Q: Why are more value-based arrangements needed today?
RW: The history of our healthcare system is really designed around fee-for-service. It's very transactional in nature and not focused on the holistic care of an individual. Today, there's really minimal financial incentive to do things that maintain the person's health; it's really all about providing sick care. Because of this, payer and provider relationships often become adversarial.
Value-based care really shifts the focus from the quality of services provided to the quality of the outcomes. It encourages providers to deliver the right level of care in the right setting to create that collaboration between payers and providers, which in many cases don't exist. And it helps to control costs, because instead of efficiency, it provides rewards to providers for keeping people healthy and ultimately avoids unnecessary procedures.
Q: How should payers identify and define key performance indicators to reward providers participating within these arrangements?
RW: I've been working on value-based care for most of my career and at the beginning it was really all about efficiency and success was defined by the reduction in costs. Now, in addition to lowering costs, the important thing that needs to happen is that value-based arrangements include both quality and member satisfaction, goals and metrics.
Q: What is the risk continuum in a value-based care arrangement? Can you give an example of what that looks like in action?
RW: There are many types of value-based arrangements, ranging from as simple as a pay-for-performance arrangement, all the way up to joint venture organizations between providers and payers.
Payment per performance is a good entry point for value-based care, which aligns incentives around quality and efficiency. It's easy to administer and easy to understand. A provider is really only responsible for the services they administer, and they don't have to worry about monitoring what others are doing or the referrals that they're making outward. An example of this kind of arrangement may be providing an incentive payment to a primary care doctor. That may look like the PCP achieving a certain vaccination rate for the patients, which will be a quality measure, and also achieving generic drug prescribing rates, which would be a cost measure.
In my opinion, the most impactful type of value-based arrangement is the patient-centered medical home, or PCMH. In these types of arrangements, a PCP really becomes the quarterback for a patient's care by coordinating all care, including monitoring chronic conditions, providing preventive care, and collaborating with specialists and others. This is most impactful because the PCP develops a long term relationship with their patients to truly get to know them and everything about their health. With this model, the total medical costs are compared to a target or a budget, and they're provided with incentive payments when quality standards are met and the cost of care is lower.
This could take many different forms depending on the relationship between the payer and the PCP: upside arrangements, shared risk and full risk. In an upside arrangement, a provider receives part of the savings when costs are below a target. For shared risk, the provider would receive a larger part of the savings when costs are below target, and would also take limited risk when their costs are above the target. Finally, there are full-risk arrangements where providers take full up and downside risks. This full-risk type of model has been working for over 40 years and is really the standard for many primary care groups today, particularly in the Medicare Advantage population. Companies like ChenMed or Oak Street Health are two examples of the organizations that operate within that model.
It's important for provider groups to take the level of risk they're ready for and comfortable with. This is not a one size fits all, so the key to success is really for payers to meet providers where they are in terms of their capabilities and risk tolerance to make sure that providers are incentivized to provide the right level of care, and then provide that ongoing support and information that's necessary to operate successfully.
Q: Many healthcare organizations are still focused on delivering the most services at the highest cost. How do you change an industrywide mindset?
RW: It's tough and ultimately will require payers and providers working together. The way to change that thinking is to align the incentives. Providers should have the incentive to deliver the right level of care without over or under utilizing services, and we also need to incentivize preventive care.
This really goes for payers as well. The payer community should remove financial barriers for people seeking preventive care, because ultimately, if they can't afford to seek those services, they'll get sick and need a lot of different types of service. We need to eliminate or reduce copayments and deductibles for people seeking care to stay healthy.
Q: What else can payers do to incentivize providers toward value-based care arrangements?
RW: For any of these types of arrangements to work, there really needs to be a partnership between a payer and a provider. There has to be an agreement in advance of what the measure of success is: What does success look like and how do we get there? As payers, we really need to work with providers with actionable data that they need to support population health management. Providers today are not really used to supporting a population — they're used to providing a procedure when somebody gets sick. And we need to continually help them monitor performance. The most important thing we can do is to help providers identify and engage at-risk members early by getting people into case management programs to help them manage people before they're sick.