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Journey Towards Value-Based Payments Part 2: Strategies to Drive VBP Implementation

Strategies for how to drive the future implementation of VBP as we move towards a more efficient healthcare system


May 11, 2023 – Value-based payment models have the potential to revolutionize the healthcare industry by improving patient outcomes and reducing overall healthcare costs. We know the benefits of VBP, but the transition has been slow.  

In our last blog, we looked at barriers to full-blown implementation of value-based payments. In this blog post, we’ll delve back into VBP models and outline key strategies for successful implementation in the years to come.

Strategies for Future Implementation of Value-Based Payments

In our last blog, we looked at the challenges in the way of widespread value-based payment expansion. With better understanding of the roadblocks, we are able to develop a road map for driving further VBP implementation in a way that promotes better health outcomes for consumers. Keep reading for a breakdown of some strategies that can be used to further the implementation of value-based payment models.

1) Streamlining Models and Incorporating Stakeholder Feedback

To drive the implementation of value-based payment models, the models being used needs to be limited. Too many models add layers of complexity to the industry that can reduce provider and payer buy in. It is also essential to foster collaboration between all stakeholders. This can be done by testing models. Currently, this is being done by CMS through the Center for Medicare & Medicaid Innovation. In testing models and engaging stakeholders, CMS can ensure there is alignment between payers and providers and that models provide results before implementing nationwide. The last thing CMS wants is to implement models that do result in better health outcomes, which is why it is important to test models and streamline the ones being implemented.  

2) Encouraging Providers Buy In 

While CMS is looking to move away from voluntary participation in VBP models, there are some cases where requiring participation in value-based payment arrangements is not possible. That is why CMS needs to look for ways to increase voluntary adoption of risk-bearing alternative payment models. One way to do this is by reducing the attractiveness of fee-for-service arrangements. FFS is attractive to providers because it rewards simply for the number of services provided with no focus on the quality or necessity of those services. By re-evaluating the current physician fee schedule and repricing billing codes to adjust payments based on actual work time, there may be more incentive for providers to voluntary enter into VBP arrangements.  

3) Investigating Incentives for Non-Medical Social Determinants of Health 

Value-based payment models emphasize the importance of preventative and whole-person care. By focusing on preventive measures and addressing the social determinants of health, providers can improve overall health outcomes and reduce the need for costly interventions. That means providers are making more money by providing less costly services, which is a win for consumers and providers. But how can this be done?  Unique incentives and quality measures need to be utilized that emphasize prevention and population health management to encourages providers to better manage chronic conditions and reduce healthcare disparities.

4) Encouraging Partnerships and Understanding the Shift to Privatization

Another important strategy for furthering the implementation of VBP models is encouraging public-private partnerships. Governments agencies like CMS and DHS can provide regulatory support, financial incentives, and resources, while private organizations bring innovation, expertise, and capital to the table. Collaborative efforts between the public and private sectors can create a supportive environment that may enhance the pace of VBP implementation. This is also where provider led entities come into the picture. These entities are formed by experienced providers that know what beneficiaries need and can meet the needs of individuals, and their collaborative efforts are especially important when dealing with the IDD and LTSS communities. By having provider led entities with specialized experience managing populations with complex needs, they can get the best care and see better health outcomes.  

Another thing to keep in mind is that as VBP gains momentum, organizations are recognizing the need to adapt to the changing environment. This has led to increased collaboration and strategic partnerships among human service providers, enabling them to harness economies of scale and streamline operations. For-profit companies and private equity firms are attracted to these opportunities, seeking to consolidate and optimize services to meet the demand for high-quality, cost-effective care. While in theory the influx of investment from these entities can drive innovation and foster best practices in human services, it is important to ensure that for-profit companies and private equity care about the health outcomes and not just the bottom line. That is where value-based payments comes into the picture. By paying based on health outcomes, for-profit companies are incentivized to support the development of new care models and technology solutions, that can lead to better health outcomes. In addition, the consolidation trend in human services can bridge the gap between healthcare and social services, which is essential for addressing social determinants of health.

5) The Payvider Trend 

The healthcare industry is experiencing the emergence of payviders, an innovative combination of payers and healthcare providers. Payviders represent a new approach and integrate the financial expertise of payers with the clinical knowledge of providers. This collaboration aims to enhance patient outcomes while maintaining cost efficiency. The payvider model fosters improved care coordination, streamlined communication, and reduced administrative burdens, all of which contribute to the overall goal of delivering better and cheaper healthcare. Transitioning to a payvider model is not without challenges as industry participants like Optum and CVS Health have faced difficulties in integrating assets into a payvider framework, but nevertheless, payviders are poised to play a pivotal role in shaping the future of healthcare. By focusing on collaboration and the pursuit of improved patient outcomes, payviders contribute to a more sustainable and efficient healthcare system and further the implementation of value-based payment models.

Together, these strategies create a comprehensive approach that can propel the healthcare system towards a future centered around value-based payments that improves overall health outcomes and reduces the cost of care.

Advocates Perspective

When we look to the future, value-based payments will play a big role. However, the path to healthcare transformation is a long one. By implementing these strategies, we believe that the road towards VBP can be accelerated. However, as VPB models are expanded, it is important to ensure that all consumers and their needs are accounted for, whether MCOs, payviders, provider-led entities, or for-profit companies are serving as administrators. This includes individuals with intellectual and developmental disabilities, as well as the aging population seeking care and support services that allow them to remain in the community and at home. With VBP models that focus on patient-centered care that addresses medical and non-medical needs, optimal health outcomes for all can be achieved.


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About the Author

Fady Sahhar brings over 30 years of senior management experience working with major multinational companies including Sara Lee, Mobil Oil, Tenneco Packaging, Pactiv, Progressive Insurance, Transitions Optical, PPG Industries and Essilor (France).

His corporate responsibilities included new product development, strategic planning, marketing management, and global sales. He has developed a number of global communications networks, launched products in over 45 countries, and managed a number of branded patented products.

mandy sahhar

About the Co-Author

Mandy Sahhar provides experience in digital marketing, event management, and business development. Her background has allowed her to get in on the ground floor of marketing efforts including website design, content marketing, and trade show planning. Through her modern approach, she focuses on bringing businesses into the new digital age of marketing through unique approaches and focused content creation. With a passion for communications, she can bring a fresh perspective to an ever-changing industry. Mandy has an MBA with a marketing concentration from Canisius College.