Value-Based Healthcare was the cover story in HFM’s October and November 2019 magazines. The authors cited experts with different perspectives, but FRG sees common threads in their advice. This article makes the connections.

In the November issue of HFMA magazine, Jennifer Carney of Beth Israel Lahey Health Performance Network was cited as saying resources, revenue and clear explanations are the three prerequisites for successful accountable care organization (ACO) planning.  Interestingly, in the October HFMA magazine, Sheila Fusé of Navvis Healthcare suggested a similar triad.  Her phrasing was more direct: having a team-based approach, HCC coding and data to support population health.  We see these two voices as providing parallel advice.

Human and Technical Resources

We see the reference to resources and a team-based approach to engagement in Value-Based Care as linked and similar structural components.  The complexity of delivering value means reviewing the population and providing service efficiently.  Building a team is expensive, and those resources scan, prioritize, and engage.  Providers are best deployed for the latter.  Analytical and managerial types do the first two by partnering with clinical mid-level clinicians and quality protocols.  The people, process and technology are linked into the structure and require resources.

Insurance Mindset

Fee for Service medicine, in which efforts are focused on demand-side scheduling and post-service payment capture, is in direct contrast to the focus on value.  Value-based healthcare contracts are fundamentally designed to bring costs down.  The target medical loss ratio, when it becomes the responsibility of a provider organization through a transfer of substantial financial risk, pushes individual primary care doctors to think like insurers and manage the unit cost and utilization of acute need by substituting lower cost preventive care and emphasizing efficient use of the provider network.

Revenue Adequacy

In the target medical loss ratio framework that is central to value-based care, revenue is the denominator.  In Managed Medicare, now called Medicare Advantage, and version of fee for service Medicare managed by ACOs, managing revenue is fundamentally about coding acuity so that future r