Linking quality data to risk-based contracting success

#5in5_Blog_BannerWhat you don’t know might hurt you. That seems to be the fear plaguing health care executives eyeing a transition to contracts that put providers on the hook for financial risk.

Healthcare Informatics (HCI) reported on a survey from trade association American Medical Group Association (AMGA).

It asked health care executives about the biggest barriers to switching to fee-for-value contracts — those that reward outcomes rather than volume of services provided.

Some of the most popular answers focused on IT and analytics, including a lack of standardized data, sufficient infrastructure, data sharing processes and attribution methodology.

AMGA’s vice president of public policy, Chet Speed, told HCI the survey shows organizations are learning that simply collecting data is not enough to develop the knowledge and tools providers need to negotiate risk-based contracts.

“Nearly 100 percent of our members have EHRs (electronic health records) … but that’s just the start,” said Speed. “Then you have to hire analytics people to take all that rich data, which is increasingly becoming structured, and create predictive analytics structures to predict which patients will be admitted or readmitted to hospitals, or who will visit EDs.”

The link between analytics and risk-based contracts, described by the executives surveyed, did not surprise Elena White, vice president of Risk, Quality and Network Solutions at Optum.
She said knowledge about a provider group’s own practices — the kind strong analytics can provide — is crucial to negotiating a risk-based contract.

“Understanding the historical costs for delivering the services and the historical ways that payers have delivered the care is really important,” said White.

“It will give them critical information in determining how much capitation or reimbursement payment they need to take care of those services and it can provide insights into ways that the provider can deliver more cost-efficient care.”

Dr. James Holly, CEO of Southeast Texas Medical Associates or SETMA, echoed White in an interview with Medscape. He said the right data is key to value-based contracts.

“Before you know where you want to go, you need to know where you are,” said Holly.

To help determine where SETMA is, the group uses analytics to measure physician performance and shares results with doctors — letting them know if they’ve met clinical guidelines and quality targets for patients with specific diagnoses.

While SETMA first introduced value-based models nearly 20 years ago, other organizations may just be getting started on their journey.

“My advice would be that, as health care financing transitions to value, groups need to be ready with sophisticated IT systems and care management processes to manage a population of patients, and they need to partner with the payer community, so that they can have the tools they need to be successful in a risk environment,” Speed told HCI.

“When providers have a better understanding of the medical costs and the services they are responsible for, they are better positioned in negotiations,” said White.

White offers more information about negotiating risk-based contracts in this #5in5 interview. It’s five questions in five minutes to help you learn how to position yourself to succeed.


About the Author:

LH_low-resLeslie Cozatt currently serves as director of marketing, Optum Provider – Thought Leadership and Content Strategy.

She directs the development of content that spotlights the role of data analytics in health care — specifically the transition to value-based care, risk management and population health management. She brings to her role more than 20 years of experience developing B2B and B2C integrated marketing campaigns for companies, including ThreeWire, Eliance and 3M. Leslie attended the University of Minnesota and graduated from Wellington College with a BS in international business and communication.

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