Over the pandemic, the amount of private equity investment in value-based care companies increased more than fourfold. This is encouraging, but the healthcare industry still has a lot of unanswered questions to grapple with as it shifts its focus away from fee-for-service care.
Experts argued that value-based care is here to stay and will play a major role in the future of healthcare during the inaugural panel at MedCity News’ INVEST conference in Chicago. The session was sponsored by consulting and technology firm Jorie Healthcare Partners. The panel of four agreed that the success of value-based care depends on organizational commitment — it’s a quixotic mistake to think these alternative payment models can gain traction overnight.
In the current value-based care landscape, there are three distinct groups, said John Fryer, head of growth and market development at Lumeris. There are those that are committed to value-based care, those that are dabbling in such models, and those that are sitting on the fence and waiting to see how it all shakes out.
“There is a period of time when almost every organization can be a dabbler, but you can’t stay there. You reach a point where you have to flip the switch and actually make it core to your organization and core to your business model,” he declared.
In Fryer’s view, organizations that are sitting on the fence may be subject to fail in the next five or ten years. He thinks the shift to value-based care is gaining momentum, due in large part to the fact that these care models do a better job of addressing patients’ needs and desires than fee-for-service models.
It’s important to remember the ultimate goal of value-based care: to improve care coordination and achieve better whole-person health outcomes. In many ways, this goal seems to be incongruent with traditional fee-for-service care, Fryer pointed out. How can a provider continue to drive transactional activity at their organization while also taking risks to manage the health of their patient population?
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
“We’re incentivized to actually reduce the amount of care in a certain population, and it’s not about restricting access to care. It’s about making sure that members and patients are getting the right care at the right place at the time and reducing the amount of duplication that we all know exists in the space,” Fryer said.
Alvia Siddiqi, chief medical officer of enterprise population health at Advocate Health, agreed with Fryer’s remarks.
She said there is “this need to constantly remind everyone” to consider what kind of care models they would want to serve their own loved ones.
“What would you want for your mom or your child? I think we all can agree that even though readmissions may be potentially another fee-for-service revenue stream, that is not the right thing to do, and it is not the right care for patients,” Siddiqi declared.
Value-based care may be the more virtuous option, but that doesn’t mean it will be easy to move the healthcare system toward this way of delivering and compensating for care. Millions of patients throughout the country still face a reality where they have to see multiple providers for multiple health conditions and concerns, paying for each visit separately.
Eliminating this kind of care segmentation would make patients’ lives less complicated, but the healthcare industry hasn’t quite nailed down the economics that would come along with such a shift.
“One of the more important pieces of this is: whose patient is it? Is it the chronic condition company’s patient? Is it the medical transportation company’s? The diabetes company’s? And to whom do the dollars actually flow to manage and take care of that person?” Fryer explained.
The panel agreed that healthcare stakeholders need to come together sooner rather than later to answer these tough questions.
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