Five common areas where provider-based risk can falter

There is no single path to success for provider organizations who want to learn how to take on patient risk. Hospital/physician gainsharing, patient-centered medical homes, bundled payments, shared savings models and global payments all vary in the level of risk managed by the provider, as well as in their ability to bend the cost curve.

Typically, the more risk that a provider can reasonably take on, the more costs are saved and the more organizations are financially rewarded. But just as risk has an upside, it also has a downside. As Optum has worked with providers who have tried to bear risk, we’ve seen issues in five common areas.

Financial Discipline: Providers are finding that there is often a disconnect between cash flows from their current contracts and the risk-bearing infrastructure in which they are investing. We help them develop a sequenced investment plan that takes into account the balance that needs to happen between the current fee-for-service environment and their future fee-for-value contracts. We also recommend they work aggressively to remove costs through streamlined administration and improved revenue cycle management.

Aligned incentives: Delayed shared savings payments are hindering provider incentive programs for their clinicians. They’re also not paying enough attention to developing incentives that focus more on productivity through relative value unit (RVU) reimbursement models. To help align incentives, we recommend organizations pilot simple and limited quality/efficiency reimbursement bonus programs with RVUs as a basis.

Coordinated care: One of the more common mistakes we see being made in care coordination is organizations putting their focus exclusively on ambulatory/primary care workflow redesign. While the ambulatory focus is necessary, we’ve found that also focusing on greater alignment with skilled nursing facilities (SNF) and home health organizations yields more immediate returns.

Activated patients: Organizations understand that motivating patients to be actively involved in their own health is a challenge. In fee-for-value, patient activation is a necessity. And while there is understanding among providers that some patients are more motivated than others, there is not much knowledge about how to motivate patients. A mindset change is in order; integrated patient care doesn’t happen in a 15-minute E&M visit. It takes a team of people that includes professionals with experience in human behavior. Social workers are often part of care management teams. They can help institute behavioral/attitudinal interventions.

Actionable Data: The right data is crucial for success in value-based care. But there is a difference between the “right” data and “perfect” data. Organizations shouldn’t assume that only perfect data can lead to action. We often recommend that organizations take a pragmatic approach to data. Use it to find and focus on the meaningful few and actionable opportunities that will show the greatest improvement in future outcomes.

Optum’s Risk and Quality Solutions’ team members, Deb Davis, SVP and West Region Leader, and Elena White, VP, Solution Development, will present more on this subject at the upcoming 2014 National Accountable Care Congress in Los Angeles. They will give their presentation, “Health plan and provider convergence: Preparing for the transformation,” during a concurrent session Tuesday, November 11, at 4:15 p.m.

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