Why Collaboration is Essential for Successful Value-Based Contracting

A Consumer-Centered Health System Story March 12, 2018

The traditional fee-for-service model of healthcare delivery has made way in recent years for value-based payment models that incentivize quality over quantity. For decades, costs have been based on the number of services someone received, often ignoring the value or quality of the care. But now we’re in the midst of a shift across the industry to value-based reimbursement agreements that put the consumer at the center of high-quality care. Such value-based payment contracts often translate to better care and lower costs, as well as greater efficiency for care providers—despite the short-term costs associated with transitioning from a fee-for-service model. Ultimately, the healthcare system at large stands to benefit. 

The Relationship Between Payers and Healthcare Providers

Value-based payment reform puts a heavy amount of responsibility on providers to lead these efforts. But the payer-provider relationship is changing. As payers have implemented value-based contracts, their relationships with providers have evolved to be more collaborative – and they must – because one-size-fits-all approaches to value-based contracts don’t work. It’s important to share information and data that enables care providers to help people find high-quality care. Payers can better serve and work with care providers by providing a menu of options that allow providers to tailor payment models to the needs of their patient population.

Working Together on Value-Based Care Models 

We must engage all healthcare stakeholders in the evolution and ideation of payment models. Consumers, employers, providers, and others should be brought into the development process early on for value-based care and reimbursement agreements to work. Payers need to ask thoughtful questions of care providers and others to create successful value-based contracts that are flexible enough to meet the demands of a changing healthcare environment. Value-based contracts also need to meet the evolving needs of consumers who are becoming more engaged in their care and conscious of their healthcare dollars. This is all part of a reimagined health system that is more interconnected and capable of addressing health holistically, moving the facets of health out from their current silos. Integrating data and insights from varied sources, the system can help payers and care providers understand the full picture of a person’s whole health and personalize their experience.

Aligning Incentives

As the healthcare system moves to value-based contracting, payers must work to ensure different value models are being deployed and integrated in a way that enables them to function cooperatively. In recent years, Accountable Care Organizations (ACOs) have formed, payers and care providers have implemented bundled payment models, and new networks are forming—but in many cases these efforts are happening independently. As value-based care evolves, we need to align incentives, apply lessons learned across different models, and work to find a balance between flexibility and common measures of quality, so that all value-based models can be knit together and engage the entire healthcare community.

The move to value-based care won’t happen overnight, but the work is already in motion. “We need to look for opportunities to create new models that incentivize value, deliver health for people, and reward care providers,” said Bryony Winn, president of Health Solutions for Elevance Health. “In virtually every other sector, incentives correspond with high-quality service. We need to move in a direction where healthcare is not an exception. The more we evolve from fee-for-service toward value-based care, the more we will incentivize positive behaviors that drive health.” We’re doing this work to empower people to be active participants in their health and to deliver a simpler, more personalized consumer experience. 

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