Discover how health tech startups can use value-based care to unlock growth opportunities for their business.
The Affordable Care Act introduced many innovations into the healthcare space with a design toward relieving existing costs and improving care on an individual and population basis. The multitudes of initiatives which have arisen in the thirteen years since its passing have done their part in redefining health care for current and future generations. Healthcare technology has evolved in tandem: the growth of AI, data management, utilization surveillance, and quality reporting have allowed a unique synergy to develop between legislation, insurers, providers, and technology creators. This broad, cross-industry pollination has given healthcare new tools to meet its objectives of growth, payment integrity, cost management, quality care, and naturally better patient outcomes.
Value Based Care (VBC) seeks delivery of quality care at efficient cost while shifting away from traditional fee-for-service reimbursement (FFS) which ruled healthcare delivery. If a patient can be proactively managed for their diseases or screened for future conditions, the forecast cost of their care could be lowered. VBC prioritizes a patient centered approach, where the holistic management of a patient is foremost in the priorities of the care team. Prevention, screening, disease management, and care coordination are some of the tools used to keep a patient healthier for longer, and manage their disease progressions in a cost-effective way.
This is of course interesting to insurers. Risk-sharing and other contractual arrangements have developed between insurance companies and providers which incentivize or penalize providers for their care delivery. Cost targets, benchmarks, and quality goals have all been developed to measure and evaluate a contracted provider’s patient panel against peer performance. The result is a symbiosis between insurer and provider - where each shares the risk of performance in positive or negative trends.
Groups of providers and/or healthcare entities who sought contracts with insurers in exchange for a shift from a fee-for-service care model gave rise of Accountable Care Organizations.
The American Hospital Association defines Accountable Care Organizations (ACOs) as: “...groups of clinicians, hospitals and other health care providers who come together voluntarily to give coordinated high-quality care [to] a designated group of patients” (1). In effect, these groups have a leverage point with which to negotiate with insurers. Generally these organizations receive financial incentives - as well as take on varying degrees of financial risk - for the quality and efficient management of patients across various insurance plans.
The need for data has likely never been greater, and its consumption never more meaningful for care provision in the United States. Hospitals, practice groups, ACOs, and individual providers all look to data-driven approaches for patient management and contract surveillance. The volume of data generated during healthcare transactions is immense and includes items such as:
Healthcare data must be transacted and delivered across the care platform - from specialists to primary care providers, from hospitals to care teams, from case management to community health workers. All of this requires an enormous level of organization and security, but also storage and connectivity. Healthcare startups may look to these needs to better engage with the VBC system and deliver their own type of value to the consumer. But once this data is flowing securely and efficiently, tools can be developed which leverage it in many ways. The rise of data-driven, electronic healthcare solutions is astounding, and events such as the COVID-19 pandemic have driven their adoption in accelerated ways.
For example:
Healthcare startups are well-positioned to enter a space where not only is so much information being generated and transferred, but also used in ever more ways. Given the risks taken on by providers and insurers in these new arrangements, participants in care delivery at many levels may have interest in engaging with new technologies and solutions to mitigate patient cost and improve care.
The time has come for health tech to consider embracing VBC models and those who are engaged with them. All levels of care delivery are seeking innovative ways to impact outcomes. The incentives are high in these new innovations; so too should health tech be persistent in their pursuit of positive outcomes for patients which will lead to better care delivery and better likelihoods of financial success for participant providers.
Health tech might also look to develop their own deep understanding of problems in their target populations. Engagement with clinical personnel is almost always essential when developing products used in any form of care delivery. If the aim is to manage specific disease states, it is intrinsic to build a solid understanding of the problems and pitfalls of the populations impacted. So too should health tech have a working knowledge of healthcare terminology and conversant aptitude of the current healthcare economic landscape. Providers and healthcare executives have an acute awareness of the problems they are trying to manage, it would behoove startup technologies to demonstrate a good comprehension of these problems outright.
Engagement with health systems, organizations, provider groups or even insurers is critical. Perhaps taking on a client who can champion the product to other providers or provide the critical feedback a health tech solution needs, or taking the time to network into various delivery organizations to see if the product they offer is valuable can provide beneficial insight toward creating a solution that will evolve with the ever changing arena of the industry.
Remaining apprised of laws, regulations, and other boundaries in care provision is just as essential. The nature of healthcare dictates a regulated environment which is safe, effective, efficient, and does not harm.
Finally, health tech may research how to involve themselves in contracting discussions directly with physician groups or insurance plans - especially if their product delivers care in a new and impactful way. Bundle payment models, alternative payment models, and other arrangements for managing cost while promoting value-based reimbursement might find a welcome partner in a product which serves these same aims.
We have almost certainly not seen the last iteration of how healthcare is delivered in the United States, but it could be assumed that some version of Value Based Care will be omnipresent in any future version. There is an enormous need for innovative, safe, effective healthcare technology solutions to achieve the aims of providers and insurers. Healthcare technology startups are uniquely positioned to develop these solutions at scale and deliver them through multiple means.
It is an exciting time in the industry and many great ideas are forthcoming.
Want to learn more about Ottehr? Schedule a Demo to learn more about our open-source EHR.
