*Contributions to this blog post were provided by Rahul Lakhanpal, Chief of Staff at SpectraMedix, and Sean Kelly, Senior VP, Growth and Business Development.
I hope everyone reading this blog had a relaxing and enjoyable holiday season. Keeping up with an annual tradition, I’d like to share with you my value-based care (VBC) predictions for 2024, exploring some of the most relevant themes in VBC for health plans and risk-bearing providers alike in the year to come. These predictions stem from multiple discussions with senior executives at health plans and health systems, our clients, consultants, growth investors, private equity firms, and RFPs we were invited to participate in in 2023.
A friendly reminder that changes in healthcare take many years. Predictions are directional trends that continue to progress and evolve and, as such, many of the predictions we discussed last year still hold true for 2024. We have elaborated on a few of these past predictions based on new findings in 2023 while also introducing new ones. As always, I welcome healthy discussion and feedback on any of our predictions.
1. Government funded programs (Medicare and Medicaid) will continue to lead the charge in VBC adoption.
Different “Saturation Targets” and APM (Alternative Payment Model) frameworks like HCP-LAN are proposing VBC adoption in the 30-60% range by 2025 and the 50-100% range by 2030 for Medicaid and Medicare respectively. Certain states have even more ambitious goals for VBC adoption, especially with shared risk and capitated models. Health plans that have platforms, technologies, and processes in place to demonstrate greater VBC adoption stand to benefit during the RFP process. Many health plans have created VBC Centers of Excellence, recognizing the financial importance of an effective value-based care strategy.
2. It’s all about the data.
Currently, healthcare data (quality, utilization, risk adjustment, financial performance, and other data sets including behavioral health, SDoH, and health equity) is siloed in health plans, health systems, and payviders (payers + providers). Both health plans and health systems will continue to invest significantly in integrating these disparate data sets (sometimes derived from more than ten processing systems) and ensuring substantial data quality and completeness. This is sorely lacking today and is a critical component for financial success in value-based arrangements.
3. Provider enablement will remain a key focus for 2024 and beyond.
Both health plans and health systems have come to the realization that providers (especially independent practices, affiliate providers, FQHCs, etc.) need to be empowered with analytics and process improvement capabilities so they can be successful in current value-based arrangements and are comfortable taking on greater risk. Multiple strategies for provider enablement must be invested in by payers and payviders to ensure that successful providers are financially incentivized. Then only they will be able to achieve their goals discussed in the first prediction.
4. Health systems will start to reach a critical mass in their value-based contract volume, and therefore start to seek out better financial performance monitoring that is integrated with existing practices and VBC arrangements.
Quality and risk adjustment initiatives will encompass a stronger understanding of financial performance against value-based care. Health systems will focus on expanding their value-based contracts and start to look at splitting contracts into groups best suited for more upside reward/downside risk, and those who are not (i.e. create high-performance networks of providers that have demonstrated success in shared savings arrangements and can now advance to shared risk arrangements). From their initial emphasis on MSSP and MA (Medicare Advantage) VBP contracts, health systems will also venture to engage commercial payers with VBC arrangements.
5. Additional investments in specialists’ adoption of value-based care will gain traction.
All risk-bearing entities (payors, providers, payviders) have and are continuing to optimize VBC programs for primary care providers. However, without the participation of specialists, their efforts to lower the cost of care and improve quality will not succeed. Efforts have ranged from “Specialist Referral Efficiency”, wherein the cost and quality matrix is calculated and provided to referring physicians, to growth equity firms investing in capitated models for specialists, and to startups enabling specialists to take on greater risk.
6. Behavioral health and social determinants of health (SDoH) will continue to see greater adoption in value-based care contracts.
We have come a long way from behavioral health being a carveout to now getting included in P4Q and total cost of care arrangements. In Medicaid, we are seeing agreements being adopted that include SDoH and health equity initiatives as part of the arrangement. Community-based organization (CBO) aggregators are contracting on behalf of CBOs to deliver on SDoH management initiatives. As health plans develop VBC strategies, we believe this will continue to be a significant focus in 2024.
7. Commercial health plans will begin to focus more on their value-based arrangement strategies in 2024 as an effective point of differentiation.
As stated in prediction no. 1, many government programs are well on their way with a value-based strategy. For commercial health plans, 2024 will be a big year to define VBC strategies. From discussion with commercial plans, we have realized the scale of VBC varies significantly from plan to plan. At SpectraMedix, we have segmented commercial plans into a crawl, walk, and run bucket. We are excited to help guide and grow VBC with our commercial health plan partners.
8. Health equity will continue to be a big focus.
There will be an increased focus on solutions to measure and promote health equity given increased federal and state emphasis to enable managed solutions for the Medicare-Medicaid dual population and CMMI’s commitment to ensure all of its models directly address health equity. HCP-LAN did a great job in their "Multi-Payer Alignment Blueprint" executive summary illustrating State Transformative Collaboratives (STC) advancing health equity guidance. 2024 should be a year where 1) defining what health equity means to stakeholders and 2) establishing standards to collect health equity data will be critical.
9. AI/ML will likely remain a buzzword but will yield only incremental improvements for VBC in 2024.
2025, or more likely 2026, is when we start to see serious applications for AI. Generative AI is beginning to show promise in building well-defined use cases for VBC and process optimization.
Takeaways
In conclusion, the landscape of VBC in 2024 is dynamic and promising, building on previous momentum. Government-funded programs remain pivotal, setting ambitious adoption targets for Medicare and Medicaid, although commercial plans are poised to have a significant role in VBC as they further define their strategies. Data integration, provider enablement, financial performance monitoring, and the growing roles of specialists, behavioral health, and health equity are key focuses, reflecting the industry's commitment to successful VBC implementation. Overall, 2024 stands as an important year in shaping the future of VBC, inviting ongoing collaboration and discussion.
To reiterate what I said above, I welcome and encourage any feedback you wish to share on these predictions or any of your own for 2024. Feel free to email me at raj.lakhanpal@spectramedix.com to share your thoughts.
References:
- HCP-LAN APM Framework. https://hcp-lan.org/workproducts/apm-refresh-whitepaper-final.pdf
- HCP-LAN Multi-Payer Alignment Blueprint. https://hcp-lan.org/workproducts/STCs/Multi-Payer-Alignment-Blueprint.pdf
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