Making the Transition to Value-Based Specialty Care

If there’s one hot theme emerging from conferences in 2024, it’s the evolution of value-based care (VBC) in the specialist care space. Physician leaders at virtual specialty care companies have taken the stage to discuss how novel alternative payment models are expanding into more medical and traditionally surgical subspecialties, and accelerating the move to value. 

My past experience within a national health plan and now having conversations with other commercial payers is reinforcing the urgency of this topic. We’re in for a bumpy ride near term, but value-based specialty care (VBSC) is coming and – if done right –  has the potential to transform how we care for millions of patients to deliver the outcomes we all expect from our healthcare system. 

Early signs of life for VBSC

VBC has taken root within the primary care space and has shown its ability to deliver better outcomes and savings over time. But the reality is that 60% of low-value care is delivered outside of primary care.

Key to VBSC is assigning accountability, outcomes, and risk properly. We see early examples of VBSC working in kidney disease and oncology treatments, respectively. Much of this is because there is a clear sense of patient attribution, or the assigning of risk and outcomes to a lead physician or care team for those conditions. 

In more complex areas like gastroenterology (GI), musculoskeletal (MSK) and cardiometabolic care – where risk, outcomes, and even symptoms can be overlapping between specialties and primary care physicians – VBSC models are still coming together. But there is a real and growing drive to deliver on these models so that we can enable scalable access to outcome-driven care that will lower the total cost of that care across the entire health ecosystem.

This drive for VBSC is going to be amplified by employers and health plans seeking accountability in the commercial insurance market. Employers are increasingly under economic pressure and will, in turn, apply that pressure to traditional networks to find and affordably access effective primary and specialty care providers for highly prevalent and costly conditions like GI, MSK, etc.

Challenges to VBSC

The application of VBC in specialist care has been slow thus far, however the desire is there. 

Any move to expand VBC into speciality care – whether by employers, commercial payers or Medicare – is fraught with unique challenges not faced in primary care. On some level these can all be traced to the underlying reality that every specialty is different, but the impact of one specialists’  care will  often be interconnected with other conditions and specialities. 

Specialties exist because it takes unique training, experience, and expertise to treat the nuances of each condition category. However, for payment, it is extremely difficult to properly attribute responsibility, and credit, when improving a patient’s diet and weight for their diabetes, also helps their heart disease (and vice versa). Due to this difficulty, it is often easier for a payer to pay FFS than to untangle who deserves the credit.

GI particularly stands out for its complexity in diagnosing and treatment. Today, most practices and clinicians are reimbursed FFS based on the time and intensity of a service. This often means more is paid for procedures versus lower intensity, but proven interventions that require more 1:1 patient time to develop iterative treatment plans. For example, access to a multidisciplinary care team to guide dietary changes and teach gut-brain techniques are proven to contain symptoms. Unfortunately, the existing system of incentives leaves many traditional brick-and-mortar clinics hamstrung, with outdated coding systems that hide valuable data and insights that might otherwise lead to faster, better outcomes. When you consider that two-thirds of Americans suffer from some type of GI symptom, the cost and complexity caused by these gaps in care is overwhelming. 

As a result, most traditional brick-and-mortar GI clinics have neither the bandwidth nor incentive to try new value-based approaches because they are often overwhelmed managing existing case loads with limited staff and resources. That means few groups, even larger, well-resourced ones, are focused on VBSC approaches. 

A foundation for VBSC

So how do we properly align incentives so VBC can take root and prosper within specialty care? Care cannot be done effectively by point solutions, it needs to be done by a provider who is accountable to outcomes, so a patient ends up with the right medications, treatments, and navigation to care for them holistically. In the early iterations of VBSC, we should prioritize simplicity, focusing on proven models and value leavers and leveraging  commonly tracked metrics for measurement.  If we can do these little things right, we can create a highly motivated population of providers and practices willing to embrace VBSC. 

Here’s three strategies for fellow specialty care providers leaning into value over volume: 

1. Align on data for credibility and trust – The payer and the provider need to be aligned on the data and parameters for measuring value. We all know FFS is broken, but it is so ingrained in our system and thus hard to identify the opportunity of a VBSC. In GI, this could be applied by examining costs within a specific illness-related index event, such as a visit with a GI, and the surrounding episode of care (i.e. ER visits, procedures, imaging, prescriptions, etc.). This can lead to a more representative estimate of cost of care and establish a baseline for episode costs that both the payer and provider agree on.
2. Payment should be meaningful but simple – Structuring payment around accountability to the patient and surrounding them with all meaningful interventions (dietary, behavioral, procedures, and medications) helps patients gain control of their conditions. On the payer’s end, monitoring and managing a VBC arrangement takes resources. Keeping payment structures simple and easy to monitor or automate is critical. One way to do this is to align payments to care milestones using a combination of utilization KPIs, patient reported outcomes (i.e., symptom control) and validated claims runout compared to baselines. With appropriate data sharing in place, as value is demonstrated, the provider and payer can transition towards a shared savings model.
3. Improve support for claims analysis – Claims are not a monolithic endeavor, and there are both misunderstandings that result in miscoding and perverse incentives for miscoding. Specialty care providers should invest in claims analysis and guidance to build a fuller picture of their specialty for their payer partners. There is also value in matching clinical and actuarial teams to examine the underlying assumptions in claims data. 

The main goal of early value-based specialist contracts is to build trust through aligned data, reporting, and performance measurement that create a guidepath for organizations transitioning to VBSC. Ultimately, by deploying best practices gained in early VBC models alongside creative, common-sense approaches that account for the unique challenges of these specialty conditions, we can create beachheads and incentives for VBSC that will lead to a more sustainable framework for patient attribution. 

Done right, that will help realize better patient outcomes, improved population health, and lower healthcare costs for the 60% of low-value care currently delivered outside of primary care. 

Photo: Nuthawut Somsuk, Getty Images

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