Blog Post

The 2 words that get us in the most trouble with VBC

By Megan ClarkWes Campbell

April 4, 2022

    Words matter. Two terms doing us no favors in value-based care (VBC) are: risk and demand destruction.

    Acknowledging that we're probably too far gone on both to stop using them, the best we can do is be careful when we do by not assuming we have a shared definition and remember that they sound far from positive while we are trying to do the hard work of engaging large groups in transforming care delivery and payment.

    Blog post: Back to basics on VBC

    Risk—do you want to do something risky?

    There have been increasing mentions of how we tripped over the starting line on this one.

    Yes, we are talking about the transfer of financial risk. Health plans are now sharing the risk they once solely held with providers. Managing the risk shift requires a big mental shift from anyone deep in fee-for-service.

    Instead of "the health of my business is based on capturing volume," think "the health of my business is based on capturing more of the appropriate volume and less of the inappropriate volume." Asking folks to make that mental shift gets harder and harder the further away you are from how everything adds together (i.e. how well are we all doing together vs. how well is my piece of the puzzle doing?).

    This is especially tricky when we're saying "take on risk without great data" (we have data to get started, but there is room for improvement – a blog post for another time). So, we're also kind of saying, "navigate risk without a map, what could go wrong?"

    The good news, VBC incentivizes good care—preventive, coordinated, patient-centered. For many, it's the kind of care each segment of the industry is trying to make easier to deliver to each individual, every day.

    Without perfect data, we can move forward. And, by doing right by the patient, we should meet the cost and quality ambition that are actually behind we mean when we say "risk."  The data will be there so don't vacillate on the chicken and egg question.

    Demand destruction—do you want to something hard that destroys your demand for your services?

    There are big ticket items in health care that we want to change. By better taking care of a population, we hope to reduce disease burden and improve cost and quality outcomes. That includes things like unnecessary hospital stays or avoidable ED visits. Even saying we want to avoid unnecessary hospital stays or ED visits sounds better than lumping everything under the umbrella of demand destruction.

    There are two problems here: First, well-managed populations still have people that get sick and need the full complement of services providers offer. We are talking about destroying a specific type of demand—the demand for avoidable and preventable high-cost spending that is wasteful and not the best care we can offer for the population. This is the kind of care that consumes your resources without adding any value, which leads to the second point: not all demand decreases.

    If we get VBC, and especially population health right, we'd expect to see more of something like: screening, primary care, appropriate prescription utilization, physical therapy, treatment for mental health needs, and other valuable, generally low cost, often preventive services. While we saw less unnecessary, high-cost services, we created more capacity for patients who need higher levels of care.

    Parting Thoughts

    There are already so many times in VBC where we are on different pages.  Let's be especially careful with the terms that are easy to derail the important conversations required to get stakeholders engaged.

    Back to basics on VBC

    imageIs health care as an industry on the same page when it comes to value-based care?

    Advisory Board's Daniel Kuzmanovich thinks the answer is no, which is why he's outlining exactly what VBC is, how to do it successfully, and what the future of VBC looks like.

    Read more

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