At Invent Health: how do you define value-based care?

Steven Loeb · March 8, 2024 · Short URL:

Representatives from Sutter, Hill Physicians, United Healthcare and more weighed in at Invent Health

Value-based care, in which physicians are paid based on patient outcomes, rather than for simply performing a service regardless of what happens, is growing quickly, particularly in Medicare and Medicaid plans. Patients receiving care under value-based care arrangements grew by 2.3 million from 2013 to 2023, with 70% of Individual Medicare Advantage patients now seeing value-based care providers in 2022.

Yet, the actual definition of value-based care can depend on which type of organization is using it, be it a health plan, a digital health company, or a physician group.

This came up at the latest invent health salon in partnership with MIT Club of Northern California,  held last week, entitled "Value-based care — Are we there yet," with a panel moderated by Bambi Francisco Roizen (Founder and CEO, Vator) and Dr. Archana Dubey (Chief Medical Officer, United Healthcare).

Panelists include Afsana Akhter (Digital Health CEO); Dr. Edward M. Yu (Chief Medical Officer, Population Health, Sutter Health); Dr. Pamela Laesch (SVP, Clinical Services Hill Physicians Medical Group); Khanh Gia Nguyen (CEO, Cozeva).

Francisco kicked things off with by defining value-based care, noting that, "According to CMS, value-based care is a term that Medicare doctors and other healthcare professionals sometimes use to describe healthcare that is designed to focus on quality of care, provider performance, and yes, patient experience."

"Based on this definition, care delivery is not about services and procedures done but outcomes and the experience of the patient. There are many VBC models out there, like accountable care organizations, episodic based payments, and condition-based payments, capitation, which is like a monthly subscription," she said, asking each panelist to define what value-based care means to their specific organization, meaning what do they see most frequently used and what's most effective.

Dubey spoke first from the perspective of somebody who has seen many different side of the ecosystem: she's been a practitioner, an employer, a strategist, and now works at a health plan.

There's a difference is how employers and health plans view value-based care, as employees typically stays with an employer for more than five years, that means value-based care becomes extremely important as a commercial buyer of healthcare, she explained. 

"In my position with the large employers, value-based care was defined as the member experience first and then the cost and quality that comes as a result of member experience: engaging them, activating them in making decisions alongside providers, so that, collectively, they're making informed decisions and picking the right choice that is higher value, higher outcome, and an optimal cost utilization," said Dubey.

"For a health plan, which is a much shorter span, people typically stay on a health plan for two years, the value-based care definition focuses a little bit more on the cost because the return on investment becomes a little bit more. Member experience is still very important, because you want the member to stay engaged with the health plan, and then there's also quality. So, the ame three things, but the weightage changes."

Laesch, meanwhile, looked at it from the perspective of a physician organization, and specifically spoke about quality and cost and patient experience, of which there are two components, one being the provider experience.

"Obviously, everything is very outcome based, we want to have the best health for our patients. And the other one is health equity. We really need to make sure it is not one size fits all, that there is that shared decision making. There are different race ethnicities, different cultural differences, and there are definitely disparities around different types of cancer screenings, affordability of medications, access to services, that we all need to take into account," she said.

Nguyen brought the technology vendor view, which is that all of the perspectives different perspectives mentioned so far, including the employers, health plans, and provider organization, "are super important."

"How do we surface actionable data and insights, and real time performance reporting, so that care is being delivered at a higher quality, while being more cost effective, and layering in all the aspects of health equity and patient experience? As a platform, we enable all of that and we have operationalized all of that," she explained.

When it comes to value-based care, there are a lot of different variations, which can even be based on geography, for example NorCal is very different from SoCal.

"In Northern California it's a very highly delegated ecosystem, so the health plan delegates the care of the member to a provider organization, who then contracts with a network of physicians who actually deliver the care. In Southern California, we see delegation after delegation after delegation, meaning it's a health plan to another health plan to another health plan to a provider organization to a provider that is contracted with so many different players," Nguyen said.

Yu, meanwhile, decided to answer the question in a framework about how payment is flowing in healthcare: traditionally it's been fee for service, meaning the more you do, the more you get paid; the sicker you are, the more surgeries you have. That makes it a pay for volume perspective. With value-based care, on the other hand, from Sutter's point of view, you're really paying for the outcome.

"I tell our clinicians in our clinical teams that the mission in value-based care really boils down to two things: one is your mission is to improve the health of the population that you serve. So, in this paradigm, instead of waiting for that heart attack to happen, where we then put in a stent, and then put him in rehab and put them on a gazillion medications, in a value-based care world, you want to move this upstream where your promotion here is on health," he explained.

"How do you improve health? That's where we're gonna focus on prevention, screening for cancers, detecting them early, promoting vaccines to prevent preventable communicable diseases, for example. So, improving the health of the population that you serve. That's the quality part that my colleagues have mentioned."

Akhter was the last to answer from the perspective of the digital health company or the entrepreneur.

"Every digital health company needs to figure out where they fall in this ecosystem of value-based care. Are you a tool or are you a service provider? Because if you are a service provider of some sort, whether you're tech enabled or not tech enabled, if you are a provider that is offering your services to a health plan or a provider or an employer, in the eyes of value-based care you are now accountable for some outcome, quality metrics, and all the various other measurement metrics for value-based care," she said.

"If a health system is using a digital health company for diabetes or musculoskeletal or hypertension, they will push some of the accountability and the responsibility to those digital health vendors or providers."

However, if you're a tool, such as an electronic medical record, if you're able to show how you benefit outcomes and measurement, then there's a value proposition you have towards value-based care. But otherwise, you don't have to prove that outcome.

That means that, as a digital health company, or a startup in healthcare, you have to figure out where you fall.

See the video of the panel below: 

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