Setting Stretch Goals - but Fair Goals - in Value-based Care

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Setting Stretch Goals - but Fair Goals - in Value-Based Care
Calendar06 September 2017

Most employers, and many providers, want to migrate to value based care arrangements so that providers are incented to provide the right care, patients have positive experiences, and employer purchasers get the value of the healthcare services being delivered.

A recent article in The Journal of the American Medical Association (JAMA)* is a good reminder that there’s still work to do in getting the incentives right. Investigators looked at the first year of the Medicare Physician Value-Based Payment Modifier Program and found as value-based payment programs continue to increase in size and scope, practices that disproportionately serve high-risk patients may be at particular risk of receiving financial penalties.

The study found that practices that served more socially high-risk patients were more likely to have lower quality and lower costs, and practices that served more medically high-risk patients were more likely to have lower quality and higher costs. These patterns were associated with fewer bonuses and more penalties for high-risk practices. These findings have implications for health plans and employers when discussing value- based care arrangements with providers. Key steps include:

  • Benchmarking: Evaluate the current status of the attributed population for a provider practice in order to understand the performance of the providers compared to national or regional norms.
  • Risk adjustment: Apply appropriate risk adjustments to the populations assigned or attributed to provider practices in order to develop appropriate targets.
  • Set appropriate targets: In order to incent provider groups based on these strategies of benchmarking and risk adjusting, set the appropriate target for the population the provider group serves.

Employers need to work with their carriers and with the health systems to evaluate the current state of care, adjust for the population being served, and then set targets that are stretch -- but not unachievable.

* JAMA August 1, 2017 edition entitled “Association of Practice-Level Social and Medical Risk With Performance in the Medicare Physician Value-Based Payment Modifier Program.”

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