Value-based care week 1: Hospitals struggle to implement

Social factors and environment determine 80% of outcomes

By way of introduction, I am a partner with the Royse Law Firm and I am thrilled to contribute to Vator's upcoming event SplashX Health: innovating around value-based care in September. I am going to share weekly news updates on value-based care, essentially in real time, leading up to this event.

My objective is to help build a community of entrepreneurs, emerging growth companies and investors in health tech, encompassing value-based care and digital health - and, hopefully, these weekly updates will add to our collective knowledge, discussion and investment opportunities.

To start off, here's a pretty good piece looking at what value-based care might look like in the future.

The future of value-based care

The post points out that "according to a 2016 survey, 58 percent of payers are moving towards full value-based reimbursement, and 63 percent of hospitals were part of some ACO."  We're already moving toward value-base care adoption. But in five years, we may be at 100%.  

Read more. 

Hospitals struggle to fund, build initiatives

Deloitte Center for Health Solutions recently released findings on its survey of 284 US hospitals and value-based care and payment models.

A key finding was that "many healthcare executives still don't plan on having any value-based reimbursement initiatives and it's unclear how effective those models are at reducing healthcare costs and improving quality." Another key finding was that environmental and social factors impact health and determine 80% of health outcomes.

But, the hospitals in this survey said they didn't know how to integrate such factors into treatment. Deloitte offered a number of possible solutions, including (i) adoption of consistent metrics addressing social determinants of health, (ii) continuation of value-based care initiatives and (iii) finding methods to track health and cost outcomes. Read more. 

Patient-engagement terms shaping value-based care

In another article published this week, environmental/social factors were highlighted as one of five key "patient engagement terms" in value-based care models. It seems that these five terms may be helpful as metrics or methods to assess health and value-based cost outcomes. 

They include the following:

• chronic disease management defined as a range of medication reminder apps to motivational patient engagement and addressing patients' challenges to continue with their treatment plans
• patient experience, or an objective measure of a patient's interactions with the whole healthcare system, including access to care, access to their data and communication with their provider
• patient-reported outcome measures (PROMs), or patient reviews of how they are recovering
• risk stratification, or the practice of categorizing patient populations by their clinical or cost-related risk of care, which ties to patient engagement and prevention of chronic disease
• social determinants of health, including socioeconomic status, education, physical enviornment, employment, social support networks and access to healthcare

Read more.

Four things 'thwarting' value-based care

Healthcare organizations with revenue between $100 million and $500 million seem to be the furthest behind in implementing value-based care models. More than two-thirds reported no value-based care reimbursement initiatives in place.  

More than two-thirds reported no value-based care reimbursement initiatives in place. Slightly under two-thirds (61%) of healthcare organizations with revenue between $500 million and $1 billion have no value-based reimbursement initiatives, according to a survey of 700 CMOs, CFOs, and clinical quality executives, conducted by EY.  Value-based care models require an entirely different mindset and one that requires a more service-oriented attitude. One challenge implementing these types of models is workplace commitment. Only 12 percent of organizations surveyed said ancillary staff was engaged in supporting such models.  

Hospitals report a growing need for predictive analytics to help improve care

In a report released by Health Catalyst, almost 80% of hospital executives said that predictive analytics could help them significantly improve care, “yet only 31% have been using analytics for more than one year.” Based on this article, the top three reasons to use predictive analytics, and in the following priority, are: (i) alert providers and enable them to help prevent health declines with high-risk patients; (ii) predict financing outcomes, and (iii) improve providers’ ability to negotiate more favorable contracts with insurers.

The use of predictive analytics can help hospitals identify high-risk patients who are projected to be high-cost consumers of healthcare services in order to improve their lives and reduce costs of care. Should more hospitals use predictive analytics, this may be a helpful tool in the overall adoption of value-based care systems.

Read more.

Physicians with high-risk practices face challenges under value-based care

In contrast to low-risk practices, physicians with high-risk practices were more likely to receive a penalty under value-based care models. Based on a report released earlier this week, such physicians lacked the technological support (e.g., electronic health records), and accordingly, the performance data for the first year of the CMS' Physician Value-Based Payment Modifier Program, precursor and replaced by Medicare Access and CHIP Reauthorization Act (MACRA). The report found that 45.9% of these practices were penalized while only 20.8% of low-risk practices were penalized for not reporting data.

The authors of this report say that even if the data is reported, high-risk practices would still have a higher percentage of penalties as compared to low-risk practices because of low quality and high cost scores associated with high-risk practices that serve low-income patients with complex medical conditions. They suggest a potential solution is to develop measures that address social risk factors, as proposed by the National Quality Form last month.

Read more.