Understanding Value-Based Contracting: Step Four - Improving the Contract
This is the fourth of our six-part series on the steps to demonstrate value for payers when engaging in a value-based contract relationship.
By Ian Duncan, PhD FSA MAAA, Chief Actuary at Arbital Health
In the first post of this series, we discuss preparations to take when considering engaging in a risk-based contract. Our second post deals with the ways to design the contract. The third post talks about ways to manage your contract. In this post, we’ll provide thoughts on ways you can improve contract performance.
In my previous post, we discussed the importance of continuously monitoring actual metrics against the plan to recognize forecasted savings. If consistent monitoring reveals that the desired forecasted results will not be achieved, it’s time to take corrective action to get back on track.
Get the Right Patients Into Your Value-Based Care (VBC) Program
One key area to improve your results is by accurately identifying the right patients. Failing to manage high-opportunity patients is often a primary reason for not achieving the desired outcomes.
Finding the "right patients" is important in a risk-taking program because managing patients requires scarce and costly resources. Providers want to focus on those patients who represent a potential return on their investment (ROI) to ensure efficient resource utilization and maximize program effectiveness.
Providers often face three common challenges in this area, they:
- Focus resources on high cost patients that will recover and regress to the mean.
- Spread the net too widely, believing that they can achieve savings based on volume of patients rather than focusing on high opportunity patients.
- Continue to manage patients past their "sell-buy" date, meaning that the patient is stable and no further opportunity for behavior change and utilization is likely to impact performance.
Streamline Your Operations
One of the ways to reduce the costs of managing VBC program analytics is to automate as much as possible through technology. Working with a partner like Arbital Health can provide you with the support you need without investing in expensive additional in-house resources that are not focused on managing your patients. This kind of partnership:
- Lowers the operational barrier to entry of VBC arrangements
- Accurately measures the financial outcomes of your contracts
- Helps you improve performance of your contract through an economic lens. This kind of strategy is built around avoidable spend and utilization tied to the nature of the intervention’s value proposition.
In Summary, Leverage The Data
Once you choose a healthcare technology partner, you'll gain additional valuable insights, including projections of shared savings and quality payouts based on your current contract performance. Analyzing these metrics is crucial for identifying early improvements.
By leveraging VBC advanced data analytics, you can uncover patterns, highlight critical information, identify high-opportunity patients for targeted management, and streamline your processes.
Once you have a technology platform in place, this will enable you to stay on track and achieve the savings you projected. The next step in the process is reconciling the contract performance with the parameters established at the outset of the contract with the payer. We discuss that in part five of our series (coming soon).
How Arbital Can Help
Arbital Health is a technology company focused on accelerating the healthcare industry's transition to value-based care. The company’s platform for value-based contract adjudication enables secure data sharing and contract adjudication among employers, payers, point solution vendors, providers, and Accountable Care Organizations that serve members within a value-based care arrangement.
Curious about mastering value-based contracting?
Download our webinar recording, "Value-Based Contracting 101: Avoiding Pitfalls & Exploiting Opportunities", and discover VBC strategies to ensure your success.
