By Lynn Carroll and Rahul Sharma

More than a decade after the passage of the Affordable Care Act, value-based care (VBC) is gaining momentum as providers and payers seek to improve patient outcomes while gaining control of runaway healthcare spending in the U.S. According to the latest Alternate Payment Model (APM) Measurement Report by the Health Care Payment Learning and Action Network (HCPLAN), 40.9% of U.S. healthcare payments flowed through two-sided risk payment models in 2020. Furthermore, an overwhelming 87% of health plans surveyed believe APM activity, including value-based contracts, will grow in the coming years.

The long-term success of healthcare providers and payers hinges on making a successful transition from traditional fee-for-service (FFS) payment models to VBC. Making VBC work, however, requires the ability to reimburse all participants in a VBC network for their services. And therein lies the challenge.
A VBC network first must have an infrastructure that ensures data can be shared by participants upstream and downstream, which may necessitate a technology investment to free up traditionally siloed data and capabilities. Second, a VBC network needs to accommodate a large variety of evolving payment methodologies that fall under the VBC label, each of which may have different incentives, performance metrics, and payouts. The spectrum currently includes shared risk arrangements such as accountable care organizations (ACOs), bundled payment programs, full and partial capitation, and the Medicare Shared Savings Program with upside and downside risk.

Finally, providers and payers, i.e., whomever holds financial risk, increasingly recognize that social determinants of health (SDoH) play a huge role in health outcomes and healthcare cost management. VBC networks must be able to integrate nonmedical and community-based organizations (CBOs), and in doing so, enable them to share SDoH and other data, offer services, and play their roles in the joint care coordination plan.

The data sharing and payment allocation required for VBC cannot be supported using legacy claims and clinical workflow systems designed for FFS. Successful administration of VBC programs requires a fundamental change in infrastructure.

Ontology mapping, longitudinal health record vital to VBC
Creating an infrastructure to support effective value-based administration starts by extending critical existing legacy systems to enable many-to-many relationships between VBC stakeholders and their counterparts, including insurance carriers, ACOs, clinically integrated networks, primary care, social service networks, CBOs, and more. This effort requires digitization as well as co-relation of data to create a Longitudinal Patient Record (LHR) to support outcomes-based reimbursement decisions, as well as the reporting of VBC contract performance.

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