How to scale value-based care to a sustainable business model

Providers can leverage the Medicare Shared Savings Program (MSSP) to build a sustainable foundation that strengthens and scales their overall value-based care infrastructure, improves care delivery for patients across the continuum, and better positions them to expand their value-based care work across lines of business. During a recent webinar, leaders from Inspira Health, Summit Healthcare, Tanner Health System and Signify Health explained the full benefits of MSSP and how to scale the infrastructure to support other value-based care initiatives.

1 Value-based care isn’t going away

The federal government has been consistently pushing providers toward value-based payment contracts through Medicare and Medicaid for about a decade. CMS expects all Medicare beneficiaries to be supported with an accountable care relationship by 2030. The agency also recently made changes to MSSP to promote more participation in the program among providers. Additionally, some states are moving toward a site-neutrality framework for hospital payment, and commercial health plans are encouraging providers to be part of value-based payment arrangements. These recent developments demonstrate the maturation of value-based payment as a growing expectation and competitive advantage for providers.

2 The size and diversity of an ACO is important

Data shows that large accountable care organizations (ACOs) are more likely to experience shared savings and far less variability in performance in MSSP than small ACOs. From 2017 to 2021, ACOs with 20,000 lives or fewer under management were less likely to experience savings than ACOs with 80,000 to 100,000 covered lives, according to data from CMS. Less variability and higher likelihood of savings also increases providers’ comfortability participating in contracts with downside risk. Given this, providers should consider participating in a collaborative ACO model that brings providers together to share in the risk and work together on population health initiatives.

3 Align your value-based care strategy

Providers are facing pressure to improve quality and cost metrics in contracts with commercial insurers and Medicare Advantage plans. Providers should align their value-based payment programs with a scalable and adoptable foundation supported by proven strategies that improve patient outcomes and reduce expenditures. Establishing a sustainable foundation for all value-based contracts simplifies the process for providers which increases the likelihood of success.

4 Scale your value-based care model into risk

Implement a two-year action plan tailored to population health activities that are best suited for your organization’s unique patient needs and that will drive high performance. In the first year, build a core technology infrastructure and scope of prevention and wellness services in preparation for risk. Increasing patient attribution to the MSSP, strengthening the relationship between providers and the health system, and expanding best practices are also important activities within year one of implementation. In year two, providers should be ready to move to a higher risk track, with deeper care management initiatives.

5 Value-based profits can replace lost income

Health systems should view their value-based care work as an opportunity to achieve cost savings and manage it like they do any other service line. By partnering with a company like Signify Health to share in the risk, the opportunity to generate savings increases in contracts with downside risk because partners will share in covering operating costs, billing and other services such as data analysis and reporting. Assuming savings of 6% in a high-risk MSSP track, an ACO with 5,000 attributed lives, clinicians can reasonably achieve $450 - $500 in net annual income per member per year, leading to $2.4 million in additional revenue.