Value Based Payment

Case Example: A Large Medical Group Transitions to Value

April 28, 2017 12:15 pm

The process of transitioning to value-based care is in many ways exemplified in the experience of one large Southern California medical group that recently made a strategic move toward value, implementing a global-risk, population health approach. The multispecialty medical group assumed global responsibility for its patients’ health with a focus on preventive care, outpatient visits, wellness, and chronic care management to avoid more expensive patient stays. The group built its model around a care team approach, forming a collaborative network of specialists, inpatient service providers, and hospitalists tasked with managing patient care to address patient issues and needs and prevent unnecessary admissions. address issues, and coordinate with a care team to reduce cost and risk for the patient. The team was committed to performing proactive patient interventions, including preventive screening, effective medical management, and delivery of services—including emergency services—at the best points of care to achieve the lowest-cost outcomes.

The group’s stated objective was as follows: “Secure the right treatment, at the right place, at the right time, with the right set of professionals to provide the best value and promote the best possible quality outcomes.”

The business model involved assuming total ownership and global risk for a specific patient population. The group then would identify patients with known issues, stratify them according to risk, and negotiate carve-outs and exemption case in contracts with insurers.

IT support for the effort would involve a set of systems that would ensure access to each patient’s clinical and financial information and facilitate strong care coordination at any point in the care cycle—and from any service location. Global budgeting, analytics, and IT expertise were deemed essential.

Design considerations. The medical group set out to clearly define the patient population it would manage and the specific care steps it would assume at-risk. For example, the group determined it would manage cardiac patients, but only to provide screening, wellness, and chronic cardiac management while contracting with another organization for cardiac surgical procedures and catheterizations.

The medical group entered into contracts based on the full delegation of risk. The group was the primary contractor to manage the members’ health and wellness needs based on key criteria in the medical management process, including age, gender, comorbidities, contract cover, services required, materials used (drugs, prostheses, durables, and devices), likelihood of complications, predicted outcome, and risk associated with care plan. Subcontractors with similar values were identified and partnerships created to build the optimal provider network.

Contracts were based on outcomes and measuring associated risks. Clarifying costs of services and tracking financial performance for each designated patient population were prerequisites to ensuring effective performance under the contracts. The medical group also considered the potential impact on its brand from the new partnerships and joint ventures. Ultimately, the group negotiated shared savings agreements with health plans to increase revenue.

Patient engagement. It was determined that all individuals involved in the care delivery process who could potentially influence patient satisfaction—including clinicians, care managers, CDI, coders, and billers—would work within an interoperable environment, with easy access to patient data. To promote patient engagement, a centralized portal was created where patients could view all their data in one place and interact with their providers.

The group’s leaders acknowledged that this approach aligns with the direction of industry and its response to the concept of bundled payments for episodic care coordination aimed at delivering a better, more economical outcome—i.e., the fundamental premise of value-based care.


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