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2020 Value-Based Care Trends That Could Tame Rising Health Care Costs

Health care costs in the U.S. continue to rise, and chances are that’s something are you already know from experience. But value-based care (VBC) models have an opportunity to slow this growth by charging based on the value of care provided — not merely the volume. This can lead to better outcomes at lower costs.

Let’s dig deeper into examples of how this model works and the trends to watch that could affect costs in 2020 and beyond.

Stratification and Population Health

Population health management is crucial to ensuring that patients get the most from their care. It draws on data to stratify patients by risk so that, for instance, high-risk patients with multiple chronic conditions get the extra attention and services they need. Those who don’t need specialized treatments won’t get them.This saves money, since high-risk patients get what they need to stay healthy and lower-risk ones avoid the expense of unnecessary medical services.

Trend to watch: Stratification is becoming more precise. Advances in precision medicine-led approaches will allow medical practices to more reliably separate patient populations and recommend treatment plans that are more likely to succeed in the long run. During the 2020s, industry organizations predict that analytics platforms will deliver actionable clinical insights to providers based on genomic, medical and lifestyle data. As data analytics improve, providers will gain better insights into their patients’ needs, improving treatment and reducing the need for expensive tests, procedures and medications.

Rethinking the Clinic

Stratification won’t reduce costs unless patients also have the right care team in place. In an effort to increase efficiency and better target each patient’s needs, VBC has changed the traditional 20-minute doctor’s visit. Physician assistants, nurse practitioners, diabetes educators, social workers and other providers are taking on more responsibility, allowing physicians to spend time on the most complex patients and procedures — even beyond the clinic walls, so that doctors can meet patients where they are.

Trend to watch: Telehealth adoption will increase. Telemedicine has been growing dramatically for the last few years. As connectivity improves, it may become commonplace.

Trend to watch: Post-op rehab exercise apps. These physical therapy exercise apps can make therapy possible at home, instructing the patient and delivering feedback to the surgeon in real time.

Controlling Pharma Costs

One of the ripest opportunities for savings is in medication. Prescription drugs account for a significant portion of the money insurers spend on health care — by some accounts, upward of 25%. Experts may debate the numbers, but none question that specialty drugs are the driver. In 2018, specialty drugs accounted for more than 45% of pharmacy spending but for just over 2% of volume.

One approach to value-based care, outcomes-based pricing, is starting to make a difference. These contracts tie prices to a drug’s performance in the real world. However, slow adoption makes it more difficult to identify best practices, a potential obstacle that also extends to another, less common approach: indication-based pricing. This allows health plans to negotiate coverage based on specific indications. For example, the same autoimmune drug may perform well for rheumatoid arthritis but be less effective for psoriasis. How — or even if — the medication qualifies for coverage would vary by condition.

Trend to watch: CMS involvement. This year, the Centers for Medicare and Medicaid Services will allow plans to introduce new formulary design based on these indications, and the agency is considering outcomes-based contracts for Medicare. (Some states already use it for Medicaid.) Although Medicare and Medicaid may not directly affect you, as more health plans enter these contracts it will become clearer which approach works best.

Back to Basics

Innovative reimbursement models and sophisticated technology lay the foundation for the adoption — and success — of value-based models. For you and your employees, finding the value in medicine means getting the right care in the right place at the right time, all the while controlling health care costs. All of this comes down to some of the basics of VBC: reducing unnecessary care such as preventable emergency visits and unneeded lab work, coordinating care, streamlining processes and, of course, rewarding value.