Creating an Analytics Pathway to Evolve with Risk, Value-Based Care

Value-based care is reaching its inflection point as more providers and payers agree to share risk and manage population health at scale.

In 2018, over half of federal revenues and 28 percent of commercial revenues came from a value-based care model with some degree of financial risk, AMGA recently reported. And providers anticipate their federal and commercial dollars to increasingly come from more advanced value-based care models — such as an accountable care organization (ACO) or a population-based payment arrangement — in the near future.

As payers and providers continue down this path, they need to enhance data and analytics and advance patient management techniques to maintain profitability while taking on risk for entire patient populations. Even providers already engaged in value-based care models stand to significantly lose money and care quality points under more advanced models.

Creating a combined financial and clinical view of populations and performance will be crucial for organizations that aim to thrive in the evolving value-based care environment, as referenced in the e-book, Fast-track your health system performance.

Enhancing population health management

Primary care physicians play a foundational role in collecting patient data and clinical insights that can inform cost-effective decision making. This data can also be used to benchmark individual, organizational, or network-level performance.

Not all physicians practice in a uniform manner, however, which can lead to undesirable variations in care or unintentional referrals outside of the health system. Addressing care variations alone could save hospitals up to $29 million annually, paving the way for shared savings and other performance-based incentive payments, the Advisory Board recently found.

Equipping providers with the information they need to understand their own performance — and how their work compares to their peers — can increase uniformity, prevent leakage, and create a highly competitive, tightly integrated network.

These same data sets also allow the health system to better understand its attributed populations and the utilization patterns of targeted patient groups. Population health management is an essential strategy to stay competitive in the value-based environment, where long-term outcomes directly affect revenue.

Executive leaders now have the chance to examine utilization patterns and measure the revenue impacts associated with specific population segments. Providers can track utilization and behavior patterns to identify opportunities for engagement and keep individuals on the path to better health.

Understanding these patterns allows organizations not only to adjust for risk, develop tailored preventive care programs, and ensure comprehensive management for all patients but also to identify markets in which employers and payers are engaging in risk and where patient populations can benefit from more advanced value-based care.

Combining all data sources to produce actionable insights

Synthesizing clinical data and financial intelligence ensures that providers have the tools they need to make cost-effective, evidence-based decisions every time.

Providers need to start integrating more than EHR and claims data to move the needle with value-based care. They should work to integrate data from all available sources, including practice management systems, laboratory systems, pharmacy claims and adjudicated claims data to develop comprehensive portraits of patient activities.

Painting a complete picture of a patient allows providers to coordinate care across the entire care continuum, resulting in reduced readmissions, emergency department visits and other costly, preventable events that can jeopardize shared savings or incentive payments. It also helps providers develop sustainable revenue streams based on wellness and gain a competitive advantage.

Hierarchical condition category (HCC) coding can take data integration a step further. Developed by CMS, HCC coding creates risk scores that help providers anticipate patient complexity and acuity and identify specific disease states and their severity.

Providers can use HCC coding to understand their attributed populations better and develop targeted population health management programs that will materially improve outcomes and reduce costs for their patients. Accurate HCC coding also translates to maximum reimbursement from value-based care models that use the risk scores to determine provider reimbursement and financial benchmarks.

Using artificial intelligence, such as natural language processing, can also help providers extract the data needed for accurate HCC coding and risk scoring that can significantly improve visibility into impactful patient factors, including the social determinants of health.

Integrating the insights from advanced data analytics tool into the EHR will also make the information actionable, enabling providers to improve care coordination, strengthen patient-provider relationships, and help leadership track key performance measures.

Understanding new revenue patterns in the value-based ecosystem

With a clear understanding of patient utilization patterns and provider performance, healthcare organizations can then chart a path forward into financial success.

Value-based care is likely to cause changes in financial patterns across the healthcare system. For example, inpatient revenue may fall as providers focus more on moving care upstream to primary care providers. However, revenue from outpatient and primary care services is likely to significantly rise under value-based contracts, especially those containing financial risk.

Using data analytics tools that integrate claims, clinical, and patient data can help providers proactively move certain services into the lower-cost, upstream venues without sacrificing revenue and quality. Care coordinators can also direct patients to the appropriate care setting and prevent costly, avoidable events.

Providers can also use data-driven insights to explore the potential of adding new initiatives, such as an urgent care facility, to best serve patients and have a positive impact on the bottom line. Urgent care center utilization increased 1,725 percent in the last decade, FAIR Health reported. Being able to respond to recent changes in utilization and treating patients outside of the inpatient setting is critical to covering a large patient population and maximizing revenue under value-based contracts.

Value-based care models with financial risk are the future of healthcare, and organizations that want to thrive in a value-based world will need to develop advanced analytics competencies and strategic partnerships that will allow them to move quickly and easily down the path to financial and clinical success. Relying on analytics to support population health management programs and potential new lines of business is a fundamental shift for most providers, but it’s a critical component of mastering risk.

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Optum works across the health system to drive high quality, sustainable outcomes and manage the total cost of care. Download our e-book, Fast-track your health system performance to read about strategies to support value-based care and improve performance with a  clear, complete view. Learn how your peers are making an impact with innovative strategies powered by data and analytics solutions. Visit optum.com/data-analytics or call 1-800-765-6705 to learn more.