Navigating Managed Care
A Look at the Future of Value-Based Contracting

In today's rapidly evolving healthcare landscape, managing cost of care and improving patient outcomes are crucial priorities. One approach that has gained significant traction in recent years is value-based reimbursement, a system that aims to coordinate and streamline healthcare services while controlling costs. Central to the success of managed care is the adoption of value-based contracting, a payment model that aligns provider reimbursement with patient outcomes.

In a recent Netsmart webinar, a panel of leaders with experience across payer and provider organizations gathered to talk about how to get started with value-based arrangements. The panel included:

• Bruce Greenstein, Chief Strategy Officer, LHC Group
• Amy Kaszak, Executive Vice President of Strategic Initiatives, Curana
• Hank Watson, Chief Development Officer, American Health Partners
• Devin Woodley, Vice President of Managed Care Contracting, VNS Health

All their organizations started as provider organizations and learned how to take on risk in different forms. In some cases, the risk premium they manage now is larger than their provider revenue. It is something more organizations will need to think about since the Centers for Medicare and Medicaid Services announced it wants to move all Medicare members to some form of value-based care by 2030.

“Creating value for a whole population through post-acute care is tricky and it’s not been the highest agenda item for large health plans,” Greenstein said. “There’s sort of a Steve Jobs moment for post-acute care. And that is, our customers don’t know what they want until we show them. We have maybe one to three years to be able to say, ‘here are examples in the way that we can create value for you.’”

Value-based care can mean a lot of things to different people, sometimes based on the specific group of patients or populations being managed. Kaszak said to create a winning, value-based payment strategy they learned they had to align their goals, teams and outcomes.

“When I think about value-based care, we want to reduce the use of expensive low-quality care and replace some of that with high quality preventive care and services,” Kaszak said. “At its lowest level, that is what value-based care is.”

As far as establishing value-based contracts and getting paid for driving value, American Health Partners approach is “move up the food chain.” Watson said the quickest way you can do that is by becoming a Medicare Advantage (MA) plan. While it may be the quickest, it is not the easiest.

“It’s difficult, you have to have the capital, the scale, the clinical execution,” said Watson. “When you elevate yourself, you own that premium dollar. You manage the folks that you have clinical control and an impact on.”

“To start now, I would say you would want to partner with another organization, especially the payviders, because we’re empathetic towards the provider side,” Woodley said. “We understand what providers are looking for and where they are trying to go…that’s the best place to start in order to take those steps in the right direction because there are a lot of pitfalls.”

Kaszak added that your first step does not have to be full risk, there are other ways like MA plans or Accountable Care Organizations (ACOs).

“You can take some risk off of somebody else’s risk and that might be a good baby step into this,” said Kaszak. “You can get the benefit maybe of expanded primary care. That’s going to be important for you to take on more risk in the future.”

LHC Group owns one of the largest ACO management companies that provides services for hospital-based and independent practices. In their partnership with hospitals, assets are jointly owned by the hospital and LHC Group which are then governed in a 50-50 relationship.

“That allows us to be able to provide new and innovative programs for the hospitals,” Greenstein said. “That’s been a great source of both innovation and addressing true value-based care.”

Advancements in technology are also reshaping the landscape and opening new opportunities for success. These technologies enable real-time data collection, analysis and decision-making, which are essential for effective value-based contracting. VNS Health had clinicians working in several different platforms where everything was manual before it transitioned to a Netsmart care management platform.

“Now all our data exchanges are fully automated. It’s all one system that everything’s being fed into,” Woodley said. “That has been the biggest change for us.”

No matter which routes an organization chooses on its way to value-based care, navigating managed care requires a deep understanding of the various models and effective collaboration among stakeholders.

“One thing I would challenge organizations on is if you engage in something passive you might not see any results,” said Watson. “If you want to do it you have to have skin in the game in some form or fashion to influence change.”

To access the webinar “Navigating Managed Care: A Look at the Future of Value-Based Contracting” click here.

About the Author

Kevin Scalia, EVP, Corporate Development

Kevin oversees strategic planning, mergers and acquisitions as well as business development. Kevin also plays a significant leadership role in federal legislative and public policy advocacy and is responsible for developing alliances with industry associations. Kevin joined Netsmart in 2002 and has been instrumental in the company’s rapid growth, serving in a variety of leadership roles across the company. Kevin was also an advisor to former President George H.W. Bush, representing small businesses on issues related to national defense transformation. Kevin is a founding member of the Long Island Software and Technology Network and a member of the College of Engineering Advisory Board at State University of New York-Stony Brook. Kevin graduated from Rochester Institute of Technology with a bachelor's degree in electrical engineering.