Video
Dr Richard Snyder Offers Key Features of Value-Based Agreements
Richard Snyder, MD, executive vice president of Facilitated Health Networks and chief medical officer at Independence Blue Cross, discusses key features that payers should include when implementing a value-based agreement.
Richard Snyder, MD, executive vice president of Facilitated Health Networks and chief medical officer at Independence Blue Cross, discusses key features that payers should include when implementing a value-based agreement.
Transcript
For payers looking to implement value-based agreement, what are some key features you would recommend they include?
We’ve followed a policy of engage, enable, and empower. The engage part of that is the contract itself; it has to be fair, it has to reward providers who are willing to transform the way care is delivered for that energy that they’re expending and their collaboration and cooperation with the payer. It’s critically important that there not be only downside risk but upside opportunity in the contract itself, with limits, because obviously state to state the laws vary. But in the state of Pennsylvania, we are not permitted to pass full risk to a health system. So, the actual downside risk is fairly limited.
The other thing we’ve done, and I think is a really important feature is it’s not all about cost; it’s about cost and quality. So, we’ve actually linked the 2 together, and if you save a million dollars in the course of a year in treating a bunch of patients and you don’t improve quality, you get nothing. If you improve quality, you can actually beat your anticipated share of savings.
The enable is the data exchange. What’s critical to deciding how you structure a value-based contract, which episodes of care you initially set up and work with, is initially dependent on the data, and the data comes from both the health system and from the payer. Analytics are applied to it, and together we sit down and decide what we’re going to tackle first—which episodes of care for what duration of time, etc. And those analytics are incredibly informative, not only at the outset in planning but also in actually implementing interventions that make the value-based contract effective.
And finally, the empower part of it. If you’re a provider, you have to have a payer that is willing to co-invest both time, money, technology, data, effort into making it a success. It’s not a handoff of risk without any kind of supportive cooperation and collaboration. That’s incredibly important, and we’ve set up things called joint value committees, where we together decide what we’re going to invest in together to make the value-based contract effective and we sit at a table and walk through those opportunity buckets selectively, identifying the individual projects we are going to do, assign people from both the payer and the provider to work on it, and report back at some point in the future.
But, it’s collaborative; it has to be collaborative. If you don’t have those 3 elements, it’s going to be a little risky to take a value-based contract on.
