Centers for Medicare and Medicaid (CMS) initiatives have been one of the primary drivers for the adoption of value-based care payment systems. However, the impact of COVID-19 contributed to innovations that can translate to growth and success in value-based care.
The pandemic highlighted – in stark details – the benefits of value-based payment arrangements to maintain financial viability. When patient visits plunged in 2020 heading into 2021, risk-bearing providers were able to remain financially viable.
Now, providers have a distinct advantage in accelerating stable revenue streams, especially with the expected value-based care and risk-sharing market expansion.
The Global Value-Based Care Payment Market Report indicates that the market expects a compound annual growth rate (CAGR) of 49.5% over the previous year, increasing from $1.52 billion in 2020 to $2.27 billion in 2021.
The projected rapid growth is in part spurred by incentives within the COVID-19 relief bill that encourage provider participation in risk-bearing alternative payment models.
What does this mean for health systems and payors?
It illustrates the expected trend going forward and gives health systems and payors ample time to prepare to take advantage of the opportunities.
How can payors and providers prepare for the expected growth in value-based care?
Procedures went down during the pandemic, with elective procedures experiencing more drastic cuts than essential services. However, providers engaged in collaborative partnerships and risk-sharing arrangements enjoyed access to a steady cash flow which amounted to approximately $160 per member per month.
Even before the pandemic, CMS, through its Pathways to Success program, had prescribed the length of time ACOs could remain in MSSPs without assuming financial risk.
Therefore, expanded value-based care initiatives in response to the pandemic will not revert to pre-pandemic levels.
Payment reform within the healthcare system will continue to move in the direction of value-based models – over fee-for-service – since they are shown to improve patient outcomes and have positive impact on star ratings and MIPs composite score.
Preparing for the ~50% market increase in value-based care demands advanced analytics and real-time connectivity throughout a patient’s continuum of care.
The companies that will emerge at the forefront of this growth will be data-driven and engaged in partnerships. These strategic partnerships will allow for collaboration, risk reduction, and improvement of patient outcomes. They can also easily increase profitability and address shortcomings.
Providers and payors will be better positioned to enhance viability of their risk-based contracts by managing individualized healthcare at scale and expanding the convenient delivery of care.
Transitioning to a value-based care model
Transitioning to a value-based care model, especially for smaller independent practices, requires more than just changing traditional fee-for-service models. Providers will need to deliver proactive care and prevention solutions while working collaboratively in a supportive network.
This is also true for larger health systems – especially those in risk contracts with commercial payors.
When healthcare providers decide to take on downside risk, data analytics along with real-time connectivity and partnerships must play a critical role in the process.
Traditional payment models have proven to be unsustainable. Early adopters of the value-based care concept, with data to support them, are paving the way for those preparing to transition.
In preparation for this, providers should be able to:
- Monitor patient care in real-time
- Select and maintain a high-performing post-acute care network
- Implement care coordination and chronic care management resources to manage high-risk population
If you would like to learn more about adapting to the value-based care payment market and how Post Acute Analytics can help, let’s talk.
Or book a demo and see how using Post Acute Analytics’ advanced analytics and real-time EMR connectivity capabilities can help you succeed.