The pivot to a value-based care (VBC) payment model—and away from fee-for-service—has been an ongoing effort in healthcare for more than a decade. Significant support exists for paying providers to deliver higher-quality care, but movement toward the model has been slow. Many independent physician practices wonder if they can achieve a return on investment (ROI) when they make the shift.
The answer is yes. Reaching a positive ROI takes some work, however, and there are challenges along the way. Fortunately, independent practices can take steps to minimize the impact of these hurdles.
There’s no question that VBC can be a complicated payment model. Unlike fee-for-service, it doesn’t link a provider’s reimbursement solely to the quantity of services delivered. Instead, VBC ties payment to improved patient outcomes due to more efficient, effective, and high-quality care.
It’s important to remember that payment is only one aspect of this model’s ROI. It can also include:
For example, between 2018 and 2020, physicians who were part of the VBC model had an average patient satisfaction score that was 0.6 points higher than providers who operated using other models.
Even though the structure and ROI are less straightforward, adoption of VBC continues to grow. By 2020, 68% of healthcare leaders had already reported up to 10% of their contracts were VBC. Further, over 60% of payments were tied to value. The COVID-19 pandemic pushed things further by decreasing the number of patient encounters and driving down reimbursements earned. In fact, in 2021, nearly half of these leaders indicated the pandemic had moved the needle further toward VBC.
Despite the clear benefits of VBC, several challenges may make some practices reluctant to abandon the reliability of fee-for-service. These obstacles stand in the way of clinicians feeling they can achieve an ROI with VBC:
The structure of the VBC model means practices can’t eliminate these challenges. Still, by implementing these strategies, they can navigate these obstacles and capture ROI over the long term.
Medical coding remains the bedrock of securing payment for services rendered. Practices looking to maximize reimbursements under a VBC system should use:
Population health management systems that include effective financial models can help practices achieve a positive ROI. In fact, 59% of practice leaders report adopting a health management system. These systems clearly organize data, helping practices avoid any rebilling to patients or payers for services rendered. Additionally, these tools make it easier for practices to secure any incentive payments that are tied to value-based reimbursement.
National quality monitoring programs, such as initiatives that monitor hospital visits after outpatient orthopedic surgery, are expanding their performance-based reimbursement. The possibility of greater ROI is growing alongside this burgeoning focus on quality within VBC. As the monetary benefit grows, independent practices may see more financial return from investing in initiatives that improve quality and efficiency, such as Innovista’s medical management program.
For example, in 2019, Blue Cross Blue Shield of Massachusetts revealed quality improvement efforts over eight years resulted in a 10% bump in patients who experienced quality management for their chronic conditions. This rise led to fewer emergency room visits and less unnecessary imaging.
By partnering with accountable care organizations (ACOs), practices can participate in shared savings programs. These initiatives, including utilization management efforts, expand provider networks, making it easier for clinicians to collaborate on and improve patient care. These efforts can both reduce the number of patient visits and lower costs.
Genovista Health is a joint venture between Genesis Physicians Group and Innovista Health. Genovista Health has helped numerous practices transition to VBC and optimize financial opportunities to support their private practice through quality performance, cost and utilization management, and HCC risk adjustment.
For example, one of Genovista’s larger practices has consistently achieved high quality scores across all the ACO contracts they participate in—including an impressive 100% care gap closure in the Medicare Shared Savings Program. They attribute their growth and success to the recurring engagement of their Provider Relations Specialist, who provides the necessary reports for their office to review and identify what level of care their patients need throughout the year.
In addition, this practice is a high utilizer of the Ribbon/POC tool, which shows key information within an EMR/EHR that assists in driving the highest quality decision making at the point of care. 360 Ribbon identifies and alerts the clinicians to gaps in patient care, allowing them to take necessary actions. They have developed workflows that incorporate staff, provider, and physician utilization and documentation in the tool to address care gaps.
By maximizing this value-based technology and engaging ACO staff, this practice has successfully achieved high marks when it comes to quality scores, annual wellness visit completion rates, and shared savings rewards. In performance year 2020, they earned over $91,000 in shared savings, making them one of the top earners for that year.
Although the move to VBC has lagged for some independent physician practices, examples like this show that a VBC model can offer significant long-term benefits to patients and providers. Practices can indeed experience positive ROI if they follow a plan to work around challenges.