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4 signs your VBC arrangement isn't a true partnership

By Sophia HurrKatie Everts

January 20, 2023

    Everybody claims they're partnering on value-based care (VBC). But our recent conversations with plans and providers revealed that leaders would only consider 20-50% of their contracts to be true partnerships.

    So, what distinguishes a partnership from a contractual arrangement? Here are four signs your partnership may be in name only.

    1. You're only changing your payment model

    Changing a FFS contract to a risk-based contract is a necessary first step in operationalizing VBC, but it's insufficient without alignment on fundamental, long-term goals. While a risk-based contract lays out many necessary details—it establishes a network, a covered population, cost benchmarks, and quality measures—it doesn't always outline a fundamentally new strategy. This may explain why nearly 80% of leaders don't think plans and providers are aligned toward achieving shared VBC goals, according to a 2019 survey.

    VBC partnerships require alignment on growth goals, population health goals, and shared investments. See examples below:

    • Growth goals such as increasing the number of lives under risk-based arrangements, disrupting status-quo broker and employer relationships, or increasing enrollments in a shared health plan.
    • Population health goals such as better care coordination, better outcomes, and commitments to evidence-based practices.
    • Shared investments such as new data exchange platforms (like Epic's Payer Platform or Point Click Care's Collective Platform), data warehouse systems, or staff investments (like care coordinators).

    If your goal is true partnership, focus on aligning your goals and investments by capitalizing on each other's strengths. This conversation may be best suited when developing new contracts.

    2. Your arrangement is upside-only with no stated plans to move into downside risk

    Most providers engage in upside risk with the intention to move into downside, but it's easy to stall in upside-only. Unfortunately, an arrangement that is upside-only, with no explicit plan of transitioning to downside risk, will not have the same effect on quality and costs.

    Successful partnerships must include the possibility of both shared reward—and shared risk. This way, both parties will have a clear incentive to make more transformative changes and maximize the arrangement's chance of success.

    If your goal is true partnership, both providers and plans must design contracts with downside risk or capitation as the ultimate goal. Health plans can support this transition by providing bonus increases, advance payments, and preferred network status. Both partners must have some sort of skin in the game (i.e., the risk of paying penalties) for true partnership to happen.

    3. You're hesitant to share data with each other

    Data exchange is one of the single biggest headaches for providers and plans alike—that's not surprising. But even once infrastructure is built to encourage data sharing and integration, there may still be some reluctance around sharing sensitive data, such as financial benchmarks or claims.

    For example, some health plans hesitate to share full commercial claims with sites of service and provider information because they fear providers may uncover their fee schedules. Financial performance data also fluctuates heavily which causes providers to distrust their partners—and even consider acquiring their own actuarial consultants to validate the data.

    If your goal is true partnership, build contracts that include defined data accountability and communicate the purposes and intentions behind using certain data. Improving the culture and processes around data exchange can help organizations mitigate distrust in their partnership.

    4. Your staff isn't fully invested.

    Throughout your partnership, financial and clinical changes will impact your staff's workflow, focus, and responsibilities.  And while leaders are often the ones driving these changes, they won't be properly implemented unless those that are involved in the day-to-day are also engaged.

    For example, a provider taking on utilization management responsibilities from a plan partner will need to invest significant time in educating their clinical staff on the new review process to make it a smooth transition.

    If your goal is true partnership, focus on enacting organization-wide cultural changes. Arm staff members with the information they need to be succesful and update them on how the partnership is progressing against its key goals. By employing change management strategies like involving staff early on and overly communicating, plans and providers can collaborate more effectively.  

    Parting thoughts

    While not every risk-based contract may be a true partnership, that's not necessarily a bad thing. Simply working with other organizations is a step in the right direction towards VBC. But being able to identify your true partners is important in helping to prioritize limited time and financial investments.

    We've identified five plan-provider partnership models in commercial risk and why they may be the right or wrong path for your organization. Read here for a landscape of these models and their individual goals, benefits, and tradeoffs.

    Deep dive: 5 partnership models in commercial risk

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    Payer-provider partnerships will play a significant role in the future of VBC. This is especially true for commercial risk, where there is no central body (like CMS) charting the course for clinical and payment models. Without a prescribed roadmap, payers and providers working in the commercial space have a great deal of flexibility to work together on their value-based care goals.

    Read on to learn about five payer-provider partnership models being applied to commercial populations and why they may be the right or wrong path for your organization. Each model comes with its own business goals, benefits, and trade-offs.

    Read more

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