Greetings from sunny (and warm) Clearwater Beach, Florida where we just kicked off the first day of our 2019 OPEN MINDS Performance Management Institute. We spent the day focused on all things metrics—performance-based compensation, prepping for value-based reimbursement (VBR), key performance indicators, performance optimization, and much more.
I opened the day with the results of the 2019 OPEN MINDS Performance Management Executive Survey. On reviewing the results, I was reminded of the Bill Gates adage, “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don’t let yourself be lulled into inaction.” The changes in specialty provider organizations’ involvement with VBR remains glacial—moving, but slowly (see Preparing For The Very Glacial VBR Rollout In Some Markets).
Of the many survey results, one finding that struck me is the proportion of provider organization revenue now coming from VBR arrangements. Nearly 60% reported some revenue from VBR arrangements. Of those, 16% have 20% or more of their revenue through those contracts. For those organizations, the need to manage their organization’s performance—and population health—will be increasingly important for their sustainability. Looking ahead, I think we’ll see this revenue “gap” increase. A limited number of provider organizations will end up with most of the VBR contracts and most of the revenue.
Working on the ground in the implementation of VBR arrangements between health plans and specialist organizations, I see impediments to a smooth process on both sides. We’ve written a lot about the challenges for provider organization management teams, particularly around getting contemporary performance data to manage these contracts. And, there is also the issue in making the shift in clinical culture to use decision support tools and manage population health (see Why So Little Measurement-Based Mental Health Care? and Moving Out Of Your Comfort Zone: The VBR Technology Continuum).
There are also some problems on the health plan side of the equation that need to be addressed to make VBR a working reality for serving consumers with complex needs. First, there is the issue of consensus on performance measures. Currently, the most-used measures are follow-up after hospitalization and readmissions. But there is not broad consensus about performance measures across health plans (though at the OPEN MINDS Health Plan Partnership Summit yesterday, it appears that there is movement toward consensus—see Health Plan Contracting Opportunities – More Consistency Emerging). However flawed, it would be great if health plans could have an intra-organizational compact on the measure set.
The second issue has to do with health plan’s own structure and priorities. In many health plans, it is difficult to determine who “speaks” for the health plan on non-typical contracting. The provider organization management teams I’m working with are investing significant amounts of time developing relationships with health plan managers—often with little financial result.
A few examples? Recently, after a year of negotiation (and many meetings) on a case rate, the health plan managers turned over and now the provider management team was told they need to start the process all over again. In a second example, which is fairly typical, a provider organization I work with took on a small VBR pilot (too small to make money) with the understanding that if the VBR pilot has positive results they would be able to expand the money-losing pilot in order to make a reasonable margin. Now they can’t get the health plan to review the results and expand the scope and are facing terminating a successful program because of the continuing red ink.
In a recent discussion about the challenges of proposing value-based contracts to health plans, my colleague had this observation: “To negotiate a value-based arrangement with a health plan you really need to have their contracting lead, their clinical lead, and a financial lead in the same room. Otherwise it’s almost impossible to make sure the clinical and financial goals come through in the contract terms.”
I think to best serve consumers with chronic conditions and complex support needs, the health plan manager and provider organization management teams need to work together. Provider organizations executive teams need to get their performance management “house in order” and realize that there will be a degree of financial risk attached with any alternate payment model. Health plans managers need to get internal agreement and then communicate with the provider community about what they are looking for and where—and the process for contracting. Perhaps creating requests for proposal for specific markets would bring clarity.
Moving the reimbursement system for the 17.9% of the U.S. GDP that is for health care certainly can’t be done overnight. I think that, if well done, VBR types of models will serve consumers well and can stabilize the service delivery system. But there are number of issues to be addressed between where the system is now and where it needs to be to move from “volume to value”.
The full results of the 2019 OPEN MINDS Performance Management Executive Survey are available online now to all readers, courtesy of Credible Behavioral Health Software.
For more on performance management and value-based reimbursement, follow our live coverage of the The 2019 OPEN MINDS Performance Management Institute this week on Twitter @openmindscircle – #OMPerformance.