WBB's Thought Leadership

Employers Health Plans are Moving Towards Value-Based Care

September 5

Across the US, many large employers’ healthcare plans will incorporate some component of value-based care. In addition, these large organizations are seeking plans with access to accountable care organizations (ACOs).

Excerpt: “The nation’s largest employers are moving quickly toward value-based approaches to contain health costs and improve quality, employers and health benefits firms say.

With the National Business Group on Health (NBGH) reporting that almost two in five – nearly 40% of employers are incorporating some "type pf value-based benefit design" into their workers’ health plans next year, it’s clear the shift from fee-for-service medicine is no passing fad.”

“In a value-based model, doctors and hospitals are paid to care for populations of patients making sure they get the right care, in the right place and at the right time. They are also measured on the quality of care they provide rather than the fee-for-service approach, which is based on the volume of care delivered no matter how it turns out for the patients.

“For employers, the value-based approach also means employees can pay a lower co-pay or premium if they ‘take steps to manage chronic conditions or obtain higher-quality or more efficient care,’ NBGH said in its newly released 2018 health care strategy and plan design survey.

“Employers are also working with insurers who manage their benefits to contract with value-based entities like accountable care organizations (ACOs), which are proliferating across the country. NBGH said 21% of employers plan to promote ACOs in 2018 but that number could double by 2020 as another 26% are considering offering them.’”

“ACOs put doctors, hospitals and a team of providers including social workers under the same umbrella to care for populations of patients. The ACO has a contract with Medicare, Medicaid, private insurers or employer-based plans to improve quality, lower costs and then keep any money saved from year to year based on the arrangement with the insurer.

“Other reports have supported the NBGH report. An Aon Hewitt benefits survey earlier this year had 11% of large employers offering ‘value-based reimbursement networks in key locations’ with nearly 50% adding them in three to five years. Half of employers are also implementing programs to guide their workers toward ‘centers of excellence’ for certain procedures that are ‘pre-selected’ by the company, Aon Hewitt’s report said.”


WBB Take: The growing pressure by Employer Health Plans on network providers to incorporate Value-Based Care components will result in changes to how network performance will be measured. In order to make the shift from Fee-for-Service, and prove that they are meeting Value-Based Care goals, Healthcare Professionals (HCPs) will need to adopt suitable quality metrics, and integrate them with their operational processes. To survive, HCPs making the transition will have to raise profit margins while deliberately lowering  per-subscriber revenue. In this context , simply adding metrics and new goals will be insufficient to achieve the savings, quality, and access goals that are necessary to make the shift to Value-Based Care. Successful HCPs will need to leverage technology, integrate services, and rationalize their workflow while avoiding sagging margins.

Those HCPs who are unable to harmonize quality and operational metrics with the workflow and revenue stream, may find that they have added goals that are incompatible with their financial health and the safety of patients. Early adoption of Quality Improvement (QI) methods may be an effective way to eliminate waste, and reduce risk as part of the migration process.

Cited by Rachel Condy.



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