Actuarial Notes

Value-Based Care Framework: A high-level overview exploring topics under the VBC umbrella

By Jay P. Hazelrigs · Society of Actuaries · 2020

Study guide: Exam GH-301

An April 2020 article in The Actuary magazine, the first in a Society of Actuaries web-exclusive series on value-based care (VBC). It introduces the concept and a framework of VBC capabilities as the basis for two subsequent articles, viewed from the perspective of a provider actuary.

On the syllabus

  • Exam GH-301 — Provider Contracting and Reimbursement, outcome 1d; the whole article.

VBC Defined

  • A single definition of VBC has been elusive; it may be easier to describe it as an ideal with ambitious objectives, most analogous to the Triple Aim: improving the patient experience, reducing per-capita medical spend and improving the population's health.
  • The components needed to achieve these objectives include payment reform, provider and member engagement, population health management, advanced analytics, interoperability, systems integration, high-performance networks and partnership models.

VBC Models

  • VBC can be seen as risk-transfer models from payer to provider along a continuum of financial risk and transformation, from models with no downside performance risk to fully delegated insurance risk (Figure 1).
  • In reality providers contract with payers using multiple arrangements from the continuum, often simultaneously.
  • A VBC capabilities framework gives guidance for any VBC model, from strategy to operations excellence (Figure 2).
  • Strategy sets the vision and foundation; high-performing networks, population health management and enterprise financial risk management should then be addressed in combination.
  • The CMS Bundled Payments for Care Improvement Advanced (BPCI-A) model is used as an example of a high-performing post-acute care network, population health management and actuarial modelling of bundles.
  • Figure 3 summarizes eleven capabilities: value-based care strategy; high-performance network management; population health management and quality; enterprise risk and financial management; data management; consumer engagement; analytics and reporting; enabling technology; business operations excellence; product leadership; and organizational change and talent acceleration.

Sources