The Executive Suite: Lowering the “risk” in risk sharing

There is an active and healthy debate currently among healthcare professionals and policymakers regarding the future of payment model design for risk sharing across payers and providers. That debate ranges from comparing the merits of different risk-sharing payment models to whether certain dynamics are draining the Medicare Trust Fund while enriching private investors.

Risk-sharing payment models include Medicare Advantage (MA) plans, commercial employer-based risk contracts, Medicare alternative payment models such as Accountable Care Organizations and Direct Contracting, and managed Medicaid plans. These models are the future of a more sustainable and higher quality healthcare system, and it’s critical that the policy and payer-provider communities get the design details right over time.

Just as important as payment model design, however, is what support the provider community – particularly the non-hospital affiliated primary care community – needs in order to succeed under emerging risk-sharing models. Without the right tools, support, and partnership, independent providers accustomed to operating under a fee-for-service reimbursement model will struggle to adapt to sharing meaningful risk. These providers will be left out of the upsides of our system’s much-needed transition to value.

The characteristics and capabilities required for high-value primary care have been known for some time. These include decision support for evidence-based medicine, risk-stratified care management, careful selection of specialists, coordinated care, and balanced physician compensation.

Less understood is how payers and others with the data, capital, and influence to drive the healthcare ecosystem toward value can help independent providers attain these high-value primary care characteristics and capabilities. Primarily, in the absence of massive organizational change or capital spending, neither of which may be feasible for independent providers.

Process change is hard, and technology investments can be prohibitive even for large organizations. In a 2021 analysis of a Healthcare Financial Management Association (HFMA) survey of health system finance and managed care executives to determine risk-based healthcare trends, Guidehouse Center for Health Insights concluded that “data integrity, reporting, and the cost of technology is the No. 1 internal challenge for health systems pursuing increased levels of risk.”

High barriers to entry for independent provider groups to engage in risk-sharing arrangements jeopardize their ability to participate in and thrive under these models. Until we understand how to reduce these barriers and open the door to a broader subset of the provider community, concrete examples of primary care organizations achieving consistent success under risk-sharing models will remain the exception, not the norm.

Fortunately, two trends provide insights into how next-generation support models might help independent providers take part in risk-sharing contracts:

Non-traditional partnerships and investments by forward-thinking payers

Forward-thinking traditional payers – such as BCBSNC, BCBSM, Blue Shield of CA, and others – and innovative new entrants – such as Bright Health and Devoted Health – are investing in closer provider partnerships that extend supportive infrastructure from payers to providers and break down traditional barriers. The supportive resources that come with these partnerships go beyond traditional network and contracting relationships and extend into next generation models of supportive technology, enhanced data sharing, administrative relief, and financial investments. In another example, UnitedHealthcare is scaling its Point of Care Assist program, which embeds real-time data directly into provider EHRs. The goals of these various collaborations are to provide the infrastructure to support the capabilities necessary for the success of value-based care and make risk-sharing models more accessible for a larger group of providers. The health plans leading in this direction are on the right track, and others will surely follow suit.

Risk enablement by new entrants

Innovative organizations like Aledade, Privia, Vytalize, Navvis, and others are building high-growth businesses based on providing various levels of contracting, administrative, clinical, technology, data, and practice transformation support for providers looking to transition into value-based care. Founded and led by ex-policy leaders and former health plan and provider executives, these new entrants have recognized that community-based providers need a new category of supportive services and technology to thrive in value based care. The initial results and growth are encouraging. The central role administrative support, technology and data play in these models suggests that administrative simplification and enhanced data and technology resources are two of the most important elements for independent providers as they transition to risk.

These two trends offer a glimpse into what the future of provider enablement for risk sharing might look like. Critically, these flexible support models are effective under any risk-sharing arrangement because their focus is on providing the technology infrastructure to improve data sharing, care coordination, and operational efficiency. These improvements can help providers meet typical current performance-based incentives such as keeping hospital readmissions low and closing quality gaps and can also establish the foundation to move into future models of more advanced risk.

The emergence of the models described above is reflective of an exciting intersection between evolving payment and business models and significant advances in technology that are introducing new ways to extend data and support to the point of care. Though still in early stages, point of care technology to connect data to workflow and assist providers in value-based care success has never been more powerful. Independent providers can now have tools embedded into their electronic health records (EHRs) that allow them to close quality gaps, increase diagnosis accuracy, improve referrals to specialists, leverage digital scheduling to improve the patient experience, and establish and manage payer partnerships. These are among the drivers of high-value primary care and are essential to provider success under risk-sharing contracts, which reward quality, better health outcomes and lower costs.

Innovation is rapidly eroding the barriers preventing many independent providers from entering and flourishing under risk-sharing contracts. Now is the time for payers and providers to embrace alternative partnership and investment models and emerging technologies that help them take the risk out of risk sharing. The organizations that partner with providers to effectively harness this innovation will reap the greatest rewards under risk-sharing models, and the healthcare system will be better off for it.