Every health system and provider organization entering into risk-based contracts needs to focus on the types of providers they want in their network. The type of providers they want will depend on the services they provide and the geographic coverage they need. However, a network should not be static as providers take on additional levels of risk in their payer contracts. A good network strategy will align an organization’s financial and quality requirements with their payer and employer contracts.
All risk arrangements will use essentially the same levers of cost, quality, efficiency and patient satisfaction to accomplish the goal of the value-based contract. However, as your organization is creating its clinically integrated network, you need to understand your risk equation and understand why you’re bringing certain providers in and why you’re excluding others.
Let’s look at three general fee-for-value arrangements, and briefly discuss contracting considerations for each:
- Fee-for-service plus incentives
- Shared savings with upside risk only
- Shared savings with upside and downside risk and capitated models
In a fee-for-service plus incentives arrangement, focus on quality. Why? Because you’ll likely be measured and incentivized based on quality, so your number one priority should be to contract with high-performing providers. The key to identifying these high-performing physicians is coupling great data with advanced analytics.
In a fee-for-service plus incentives arrangement, most of your organization’s provider networking efforts will be upfront — identifying high-quality physicians, contracting with them and sharing evidence-based guidelines and care protocols.
If you choose to take on more risk, your emphasis will be less on contracting and more on managing. Part of managing your network is knowing how to get performance data into the hands of your physicians.
In shared savings with upside risk models, you’ll add cost control to your emphasis on quality. Costs won’t overtake quality as your main focus, though. In fact, the emphasis on quality will likely increase since high performance on quality metrics can drive better performance for medical cost of care management.
Managing your network in upside risk requires a focus on including those providers that adopt your same philosophy for managing medical cost of care and meeting quality standards. A focused network panel of providers with a track record of collaborating for better cost efficiency and quality outcomes may mean that the network is less broad.
Shared savings with upside/downside risk and capitated risk models require a higher level of accountability among network providers. Every clinician needs to feel a sense of ownership in the organization’s success. Network providers and physician reimbursement terms need to be aligned to your payer contract terms and new payment models may be required to ensure the network providers are financially incentivized to manage the population. Physician engagement by your organization will become even more important in sharing critical population management data such as gaps in care, in-network referral usage, performance of medical cost of care management and other key information that will arm the providers to better manage their patient populations. Making quality data, outcomes and evidence-based data widely available to clinicians, with strategies for helping outliers and average performers improve will drive better outcomes for your organization.
For more insight on the stages of developing provider networks under risk-based contracts, check out the article Designing a provider network with your vision for value-based care in the Fall 2015 edition of RISKMATTERS.
About the author
Elena White currently serves as Vice President of the Risk Quality & Network Solutions division for Optum. She has over 18 years experience leading network optimization initiatives, network development and expansion, business planning, provider reimbursement development, transformation to risk based arrangements and medical cost management strategies for both health plan and provider organizations.
Elena holds a Bachelor’s Degree from University of California at Riverside and Master’s Degree in Business Administration from Loyola Marymount University.