Navigating Complexity and Innovation in Healthcare: VBC Commercialization and Contracting
The healthcare industry is experiencing profound transformations in payment structures, care delivery methodologies, and technological advancements. For startups aiming to succeed in this dynamic environment, a deep understanding of stakeholder dynamics and the complexities of value-based care (VBC) is essential.
This brief distills insights from a February 7th HiveTalk webinar featuring Reza Alavi and Alex Mohseni, who shared their extensive experience in navigating the shifting landscape within large value-based organizations.
Risk Delegation
Delegated medical groups, including the likes of Optum, ChenMed, or CenterWell, have emerged as central players in the VBC ecosystem. These groups assume varying degrees of risk from Medicare Advantage plans and are responsible for managing care for designated patient demographics. The complexity of their roles is underscored by the level of risk assumption (i.e. professional vs. total cost of care) and the delegation of additional functions, such as utilization management and claims processing.
Whether delivering care through direct employment or partnerships with network providers, these groups play a crucial role in shaping the healthcare landscape. Recognizing the subtleties of each care delivery organization’s operational and care model differences is essential for aligning business strategies with their dynamic needs.
Managed Care Operations
Value-based medical groups organize their operations around three pillars: Risk, Quality, and Affordability (RQA). Each has a distinct impact on patient care and financial outcomes.
Risk: Adjustment and documentation initiatives are designed to accurately capture Hierarchical Condition Category (HCC) codes, aligning reimbursement with patient case complexity.
Quality: Initiatives center on delivering exemplary care and maintaining meticulous documentation, with a focus on preventive services based on HEDIS measures, affecting star ratings and future funding. This underscores a commitment to superior care and patient satisfaction.
Affordability: Efforts aim to reduce the frequency and cost of unnecessary care, advocating for alternative care sites and specialty care programs to reduce unwarranted variations in utilization.
For instance, in diabetes management, a virtual tech-enabled solution can influence various outcomes. Stakeholders focused on quality strive to improve HEDIS measures like A1C control, while those emphasizing affordability aim to decrease unnecessary emergency department visits and hospital admissions. Often these stakeholders work within the same organization but in different silos, with separate clinical priorities, vendors, and integration timelines. Contracting may be most concerned with cost of solution, which may not be budgeted for till the following fiscal year or be compared to a miscategorized cheaper comparison.
5 Common Mistakes in VBC Sales and Contracting
Successful introduction and implementation of healthcare solutions hinge on identifying the right points of contact, optimal timing, and specific RQA elements prioritized by potential clients.
Lack of Understanding of the Customer’s Business Model: Failing to grasp how customers generate revenue, savings, and margin within VBC and the risk models they operate under can hinder successful engagement.
Overemphasis on Metrics: While metrics are important, overreliance on them can lead to skepticism. Building trust through social proof, scalability, and strategic timing is essential for gaining stakeholder confidence.
Underestimating Adoption Complexity: Anticipating buyer friction points and addressing end-user mindset and pain points are critical for ensuring solution relevance and uptake in a competitive landscape.
Overconfidence in Solution Efficacy: Conflating optimistic projections with reality can erode credibility. It's essential to ground contracting assumptions in the actual challenges of healthcare delivery and demonstrate a nuanced understanding of change management.
Patient Activation: Recognizing the proportion of risk lives to overall patient volume is crucial for understanding provider behavior and aligning solutions accordingly. Frontline providers are not always fully incentivized to activate or enroll patients at a timely rate.
Conclusion
Effectively navigating the complexities of value-based healthcare demands a strategic, informed, and nuanced approach. By aligning with the specific needs and priorities of risk-bearing entities and their care delivery partners, companies can position their solutions for successful adoption and implementation, contributing to the ongoing transformation and improvement of healthcare delivery.
AskTheHive empowers businesses to make smarter decisions faster by tapping into the collective wisdom of a diverse pool of healthcare experts. Quintuple Aim Solutions accelerates the path towards value by consulting, advising, and investing in innovative solutions. Interested in learning more?
Written By: Reza Alavi, MD, MHS, MBA and Shreya Jain, MBS at Quintuple Aim.
