Shifting Left in Value-Based Care

An idea whose time has come cannot be stopped.
-Victor Hugo

The healthcare industry’s transition from fee-for-service (FFS) to value-based payment (VBP) models presents a prime opportunity for innovative thinking. According to the Healthcare Payment Learning and Action Network (HCPLAN) 2023 APM Measurement report, 41.3% of U.S. healthcare payments are now tied to alternative payment models. While this transition hasn’t been without its challenges, forward-thinking organizations are already looking toward the next phase of the value-based evolution: shifting left in their VBP strategy.

Why Shift Left?

The concept of “shifting left”—originally borrowed from software development—involves making critical analyses and decisions earlier in the process. In the context of VBP contracts, this means leveraging historical data and advanced analytics to make more informed decisions before contracts are designed and implemented.

This approach addresses a crucial question: Can organizations use their accumulated experience to better inform their VBP approach and improve outcomes? The answer is a resounding yes, provided they have the right technology and strategies in place.

The Complex Web of Value-Based Payments

Compared to traditional FFS models, value-based payment contracts are more complex and require meticulous coordination across multiple areas of an organization. Value-based contracts also demand a strategic focus on collaboration, data-driven decision-making, and proactive care management to achieve the goals of value-based care; namely, improved quality, cost efficiency, and better patient experiences.

These agreements involve a range of intricate processes, including:

• Pre-contract payer-provider negotiations to define terms and metrics
• Historical analysis of cost, quality, and utilization trends
• Cross-departmental coordination between operations, actuarial teams, quality assurance, finance, provider networks, and analytics
• Evaluation of organizational data capabilities and alignment of care management resources
• Population assignment to contracts and calculation of savings, losses, and risk distribution
• Selection of VBP models tailored to specific provider groups
• Development of data-sharing systems to enable transparency and collaboration between payers and providers
• Continuous monitoring of key value metrics, such as cost, quality, and patient experience
• Provider engagement and education to ensure clear understanding of contract terms, expectations, and performance metrics

This level of complexity demands robust infrastructure, sophisticated analytics, and seamless collaboration between payers and providers to deliver on the promise of value-based care.

Technology as an Enabler

Artificial intelligence (AI) and machine learning (ML) are the driving forces behind the shift-left strategy in value-based care. These technologies enable the creation of essential feedback loops that guide the design and implementation of value-based programs. For instance, claims and member data can be analyzed using episode bundling engines to pinpoint the most promising opportunities for bundled payment programs. Many healthcare organizations, particularly in Tennessee and Ohio, are leveraging open-source episode definitions as foundational frameworks.

By integrating robust, actuarially sound, episode-based bundled payment methodologies, payers and providers can collaboratively analyze their data to identify episodes with the greatest potential impact on total cost of care. Advanced technologies and processes further enable the creation of provisional risk profiles even before final claims data is available, supporting earlier interventions and more precise decision-making.

Such sophistication empowers healthcare organizations to achieve significant improvements in cost efficiency and patient outcomes, ultimately accelerating their journey toward value-based care success.

Making Data Work Harder

We have the data we need to accelerate value-based contracting. To successfully implement the shift-left approach, organizations must harness the full potential of their data. This is essential to effectively measure current performance, as well as to generate actionable insights that can inform future contract designs. Key areas of focus include:

• • Identifying optimal payment models for different provider groups
  • Setting achievable benchmarks and incentive structures
  • Incorporating risk adjustments for population health
  • Analyzing social drivers of health
  • Predicting potential cost savings

Provider Engagement: A Critical Success Factor

The shift-left strategy also has the potential to significantly enhance provider engagement. By leveraging historical data to establish realistic benchmarks and define achievable goals, organizations can offer more compelling value propositions to their provider partners. Providers need clear and unambiguous pathways to success when participating in VBP arrangements, and payers can utilize real-world data to guide providers towards revenue-maximizing opportunities within VBP contracts.

Looking Ahead

Value-based payment is no longer just an aspiration—it is rapidly becoming a necessity, driven by both industry trends and policy initiatives from public and private payers. The shift-left strategy in VBP contracts is the logical next step in this evolution, enabling organizations to leverage historical insights and predictive analytics to optimize healthcare spending and achieve the quadruple aim: improving quality, reducing costs, and enhancing experiences for both patients and providers.

To seize this moment, organizations must invest in advanced technology platforms and analytics capabilities. Organizations that prioritize these investments today will be well-positioned to navigate the complexities of VBP models and help lead the industry towards the future of value-based care.

The shift to value-based payment has taken longer than initially expected, but with better tools and more sophisticated approaches, healthcare organizations can accelerate the transformation to more effective and efficient care delivery.