News | Value-Based Payment

What’s the blueprint for taking on risk?

News | Value-Based Payment

What’s the blueprint for taking on risk?

  • It is important providers find health plans with which they can partner, not just negotiate, on risk-based contracts.
  • Providers can give health plans insight on significant components of their rich data.
  • Start risk models with a focus on a high-risk cohort and carefully consider effective steps.

Although the healthcare trend is shifting risk to providers, health plans have important roles to ensure both parties succeed.

Although provider risk needs include a blueprint to prepare and engage in risk-based contracts, health plans can help determine success by sharing knowledge and insight with them, said Meredith Duncan, executive director and COO of Aetna’s Texas/Oklahoma/New Mexico health plan.

Duncan’s comments came Sunday in a session titled “Building the Blueprint to Support Risk-Based Contracts,” during the HFMA 2019 Annual Conference.

Daniel Marino, managing partner for Lumina Health Partners, who co-presented the session, said providers moving into risk need to focus on the key drivers of success, including:

  • Negotiating and partnering on a risk-based contract with a health plan — not just negotiating terms
  • Finding ways to align all of the terms

Duncan, who has worked for providers as well, said sometimes it helps to ensure the other party understands your perspective and objectives, which can help both parties work toward a collaborative agreement.

What providers need

Marino emphasized the need for providers entering risk to have the longitudinal analytics to begin to understand what’s occurring with the population. When looking to impact the population’s health, analytics become very important.

Although both health plans and providers can have strong analytics, the ability to combine their analytics informs not only what’s occurring with the population but why it occurs, Marino said.

Additionally, care management also is key in risk models.

“If you’re truly going to be successful, it can’t just be care management that is done in the back room on the provider side, it needs to be integrated with the payer,” Marino said.

Health plans typically have strong care-management capabilities that they could combine to provide more insight, such as when the patient is going outside the network.

“The provider doesn’t always know that, so then collaborative case management becomes really important,” Marino said.

Duncan said providers know health plans have the potential to provide a lot of rich data.

“What might be interesting to a physician on a provider side might be something that health plans don’t typically look at,” Duncan said.

Finally, managing the network takes on greater importance.

“Having an organized system of care and managing patients within that network really becomes important,” Marino said. “That’s what’s going to optimize the quality outcomes and give you the best opportunity to manage the costs.”

Duncan said risk contracts are not typically structured to focus on a very specific outcome, such as the health of diabetics.

“But that might be an outcome that you look for” in addition to better management of diabetic-quality indicators and better cost control of the diabetic population, Duncan said.

Implementation keys for contracts

Success in such an arrangement usually starts with mutually agreeing on a problem that both parties want to start to solve, Marino said.

He urged providers and health plans to focus on a high-risk cohort, and consider the problem the providers and health plan are trying to solve.

Another implementation key is to ensure the incentives are aligned and there are areas of accountability.

“If the health plan and the provider come together and they have aligned incentives and aligned goals, and then have accountability to manage those goals — everything from care management, how to begin to manage the network and being able to reduce medical spend or cost of care — then, your opportunity for success goes up dramatically,” Marino said.

About the Authors

Rich Daly, HFMA senior writer/editor,

is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

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