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Primary care long has been at the center of value-based contracts. But as the health care industry looks to expand value-based payments, questions are swirling about how to best incorporate specialty care into accountable care models.

At 2023 Health Evolution Connect, executives from across the industry came together to explore the future of specialty value-based care. In a conversation titled “The Next Chapter of Value-Based Care: Navigating the Intersection Between Primary and Specialty Care to Advance Accountable Care,” moderator Bill Nordmark, CEO, Enlace Health, and discussion leaders Adam Boehler, CEO, Rubicon Founders; Brad Smith, Founder & CEO, Russell Street Ventures; and Sukanya Soderland, SVP & Chief Strategy Officer, Blue Cross Blue Shield of Massachusetts, examined how leaders can better engage specialists in value-based payment models, and how leaders must collaborate to progress value-based models for specialty care.

Embracing Value-Based Specialty Care

Kicking off the conversation, Nordmark noted that although the United States’ health care system has devoted significant resources to advancing value-based primary care, primary care accounts for just about 40% of total care costs. “60%-65% of the cost is managed by specialists, and yet the ‘risk-model’ for specialty care is broken,” Nordmark said.

As a result, Nordmark said, the United States is “stuck in neutral” when it comes to furthering value-based care adoption. He encouraged leaders to explore “how we get out of this neutral place” by incorporating more specialty care into value-based payment models. “We need to look beyond primary care. It’s time to be more ambitious,” he said.

Rethinking Incentives Amid Consolidation

But leaders noted there are challenges to advancing value-based payments in specialty care. “As we think about where specialty care models go, we need to be realistic that value-based care is hard, and we need to be thinking about how we really make sure that the new models we’re creating are going to drive real value,” Smith said.

Leaders cited increasing consolidation in the health care industry as one of the toughest obstacles to increasing value-based payments for specialty care. Nordmark said standalone specialists are poised to be “the real movers” in the shift to value-based contracts, because they are unhindered by the constraints of large health systems.

However, leaders remarked that ongoing consolidation in health care means there aren’t many independent specialists in some markets, making it difficult to incorporate specialists into specialty-focused value-based care models.

“We need to get the actual incentives to the frontline physicians and clinicians,” Soderland said. But, she explained, “right now, incentives are typically being offered at the system level,” and “systems aggregate incentives received across payers and determine where and how to allocate them, which may not always be focused on the type of value-based care that we’re talking about at the specialist level.”

To address this issue, Smith called on policymakers to create incentives for specialists to remain independent. He said implementing site-neutral payment policies could help. “I think site neutrality is really, really important as you think about slowing down or potentially rolling back some of the consolidation that has occurred,” Smith said.

Boehler and Soderland agreed. “I think we’re getting to a point where if we don’t do something very different, if we don’t find ways to incentivize very differently, we’ll just have more of the same,” Soderland said.

Boehler contended that value-based payment incentives could help to create “a next generation of high-quality specialty networks.” He explained, “The good thing about risk—whether it’s taken from the federal government, Medicare Advantage plans, or others—is that it creates a real incentive to identify specialists who perform really well,” because although payers “can do a lot in primary care,” they’re not going to see substantial savings without engaging specialists.

Boehler said those incentives can come from both “a government perspective” and “a plan perspective.”

Need for Collaboration and Long-Term Thinking

Leaders said cross-industry collaboration and a shift toward long-term thinking are essential to overcoming challenges and implementing more value-based payment models for specialty care. Leaders underscored the importance of government entities, providers, and payers working together to create new models that promote value-based specialty care, noting that progress can’t be achieved in isolation.

“We are getting to a point where any given payer and any given provider in a negotiation on their own are not going to be able to solve for this. It needs to be more systemic, and I do think the government can play an important role,” Soderland said.

As part of that collaboration, executives in the industry must shift their thinking away from short-term goals and instead focus on achieving longer-term transformations and return on investment, leaders contended.

Siezing Opportunities: Medicaid and Direct Contracting

Leaders also emphasized the need for executives across the industry to seize opportunities where value-based specialty care models could make an outsized difference in patient outcomes and total cost of care.

Leaders pointed to Medicaid as an example. While there’s been a lot of focus on implementing value-based care contracts for primary care in Medicaid, there is growing recognition that the program needs to expand the scope of value-based payments to encompass more complex patient populations and specialty services, leaders said.

For instance, Medicaid programs often cover patients with high-risk pregnancies, and those patients typically require care approaches that extend beyond primary care. As such, there is opportunity to implement a value-based care model that focuses on providing and managing specialty care for high-risk pregnant patients under Medicaid, leaders said.

Direct Contracting models also offer opportunities to expand value-based payments in specialty care, leaders noted. Smith explained that Direct Contracting models aim to align payments with innovative care solutions, like those being tested in Medicare Advantage, that can “save a lot of money.” In fact, CMS recently released data showing Medicare’s Global and Professional Direct Contracting Model saved CMS $371.5 million and saved direct contracting entities $484.1 million during Performance Year 2022.

Reimagining the Specialty Care Landscape

The need for evolving health care payment models isn’t new, but the health care industry’s continued cost increases are adding more pressure to create real change. While a great deal of progress has been made within primary care, “at the end of the day, if we’re still paying fee-for-service in specialty care, we’re not going to get very far” in building a more value-driven health care system, Nordmark said. “Something drastic needs to change,” he added.

Leaders contended that the future of specialty care is at a crossroads, and they called on executives across the industry to reimagine what the specialty care landscape could look like with more value-based models. The industry needs to incorporate risk models that help identify and reward high-performing specialists, and those models must be implemented with a long-term view that welcomes evolving health care technology and supports collaboration across all participants.

Nordmark concluded, “Payers, primary care providers, and specialists are already overwhelmed, and our consumers—our patients—are feeling the struggles of our inefficiency. Systemic change is possible with all players at the table and with an ecosystem that puts value-based specialty care at the center of a truly patient-centered health care world.”

Ashley Antonelli

Senior Manager, Executive Communications

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