Value Based Care + Predictive Analytics: Letting The Light Shine In

“There’s a crack in everything, that’s how the light gets in.”

- Leonard Cohen

Value based primary care – revenue at risk

Value based primary care (VBC) agreements have been heralded as a step forward in reducing healthcare costs and improving outcomes. While that is certainly true, these agreements also represent a financial risk transfer from the insurance company to the primary care practice. Under a typical VBC agreements, primary care practices accept full financial responsibility for all medical expenses incurred during the plan year by the patients attributed to their practice in exchange for capitated monthly payments. Their responsibility is bookended by a defined set of CPT codes applicable to a primary care practice.

The insurance company pays a per patient per month capitation payment to the practice to cover all expenses within the defined scope of conditions. If the practice manages the total cost of care for all attributed patients below the capitation payment total, they keep the savings as margin. If they are unable to manage the total cost of care, they cover the overage out of the clinic’s budget. There are also often upside financial incentives offered when specific performance, patient experience, and health outcomes metrics are met.

The financial risk transfer occurs due to any number of reasons. Not all attributed patients will visit the clinic during the year, and some may only visit once or twice. The clinic is on the hook for medical expenses these people incur (within the defined scope of VBC conditions) regardless of lifestyle, health risk factors, medication compliance, or just plain ignorance. And primary care practices have limited tools at their disposal to engage and manage all attributed patients, not to mention finite financial and FTE resources.

Predictive and actionable vs retrospective and reactive

Healthcare today operates in a realm of retrospective and reactive data. Very few healthcare delivery organizations have predictive, data driven tools empowering them to conduct proactive outreach and interventions to avoid future health conditions and expenses.

It is fascinating to compare the sophisticated, targeted advertising algorithms swamping the internet with the archaic, retrospective engagement and outreach in the healthcare realm. If a healthcare organization were half as facile as a SEO optimized advertising campaign, they would be miles ahead of their competitors.

An opportunity to shine a light

There is a business opportunity to offer a predictive analytics tool leveraging machine learningand statistical algorithms focused on the key VBC performance metrics that result in financial incentives to the primary care practice.

A new tool like this must be an added resource to a VBC primary care practice as these clinics are already resource limited. It would need to include proactive digital outreach to supplement current outreach activities by clinic staff.

Importantly, to shift from retrospective and reactive to predictive and actionable the data inputs need to include sources beyond insurance company claims data and electronic medical record data. All of us now leave a broad trail of digital breadcrumbs in our daily lives. The healthcare industry is far behind other business sectors in leveraging these tranches of data to garner consumer/ patient insights.

No doubt there are companies like Skypoint AI working on products and platforms headed in this direction. The successful adoption of those offerings depends on how directly they drive actionable results targeted at the specific VBC performance metrics primary care clinics are striving for. And if the actionable results can be partially of fully achieved without having to add additional clinic resources to the effort, so much the better.

Peeking through the crack and find the opportunity

The world of VBC primary care is struggling in the darkness of retrospective data. Sometimes these practices muddle through successfully, or they simply demand reimbursement increases from insurance companies to cover the cost over-runs of the prior year. But with the right kind of predictive analytics tool, informed by data beyond the traditional healthcare EMR and claims data bases, a VBC primary care practice would be empowered to deliver better care, better revenue, and happier, healthier patients.

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20242itive is a Portland based consultancy founded by Erik Goodfriend, offering a unique combination of market intelligence, knowledge of healthcare payment systems and creative business strategy insights. Feel free to contact us at info@2itive.com