Six Critical Drivers That Determine Success or Failure in Value-based Care

by Debbie Zimmerman, MD Corporate Chief Medical Officer, Lumeris and Essence Healthcare

The U.S. healthcare system’s ongoing transition to value-based care represents the most significant change in a generation in how health systems are reimbursed for the services they deliver. As a result, health system leaders across the country are searching for insights on how to improve performance under value-based arrangements.

At Lumeris, through historical data analysis and predictive modeling, we have categorized the following six critical drivers of value-based care success that account for 95% of the performance outcomes under our approach. For a full view of each drivers, please see Critical Drivers for Success in Value-based Care

  1. Aligned Incentive Contracting: Value-based contracts between payers and provider entities must include patient-focused incentives that encourage providers to improve quality and access while managing costs. Over time, these contracts should evolve to increase risk assumption by providers and include sufficient opportunity to reward medical groups and individual providers, and to enable reinvestment in value-based care initiatives.
  2. Effective Physician Compensation and Incentives: Compensation metrics should align with value-based goals of the group and system while balancing individual and group incentives. In addition, metrics must be credible and measurable, with incentives that are meaningful and promote behavior change.
  3. Physician Mindshare: Value-based care’s success hinges on physicians’ willingness to undertake the hard work of changing their practices to improve quality and rein in costs. Gaining buy-in requires having enough value-based lives in a physicians’ own patient panels to make the effort worth their energy, which can be facilitated by starting with select high-performing providers.
  4. Ideal Leadership and Organizational Structure: The cultural shift that enables a successful value-based care transition requires an effective governance structure—one that has physicians as its focal point but also incorporates the broader care team and staff. As physicians are promoted into leadership roles, they will need education and training around value-based care principles as well as dedicated time to drive these initiatives. And all providers in value-based contracts need to participate regularly in best practice sharing, mentorship, and performance feedback.
  5. Powerful technology and information: At a minimum, technology and analytics should: 1) provide timely and actionable information; 2) exhibit the transparency of cost and performance across the care continuum; and 3) identify improvement opportunities for the population, provider and patient. However, technology alone is not sufficient to drive change. It must be applied in the context of total system transformation and operations to be effective and useful.
  6. Practice Transformation & Accountable Primary Care Delivery: To deliver accountable primary care, providers must change the way they interact with patients, utilize support staff, and run their practices. Providers will need support as they take on new, often unfamiliar tasks associated with managing a patient population on cost and quality. Role-based playbooks and interconnected technology tools enable the entire care team to understand their daily, weekly and monthly routines. In addition, training, on-the-ground support and clinical mentoring facilitate change.

Each of the six key drivers requires an immense amount of complicated work, often outside of health systems’ areas of expertise. Healthcare organizations that want to avoid the steep learning curve can work shoulder-to-shoulder with an operating partner that has a track record of moving provider entities to value using proven methodologies.

Not sure where to start? Talk to one of our advisors.

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