Can specialized models tame
the “value-based care” giant?

From traditional to specialized: The evolution of VBC archetypes

Traditionally, ACOs (Accountable Care Organizations) focused on broad population health management in the primary care setting has been the most widely used template for VBC programs implementation. We have seen large national Payers continue vertical integration & VBC programs focusing on primary and outpatient care across the board – Centerwell, Optum Health, Carelon and the likes. While traditional VBC models have contributed to improved care coordination and cost reduction, they often faced challenges in addressing the complex needs of specific patient populations. Recognizing these limitations, the industry is shifting towards specialized VBC models focused on specific diseases or conditions. Beyond the physical health-focused specialties, we are seeing growth in Behavioural health and Pharmacy administration spaces as well. 

Here are few of the many archetypes thriving in this new era of value-based care:

Risk-bearing primary care groups – Fairly widespread arrangements that deliver care via primary (home & alternate) care for a broader patient population and shared financial risk. Few examples include Landmark Health, Oak Street Health, and many more.

Risk-sharing hybrids – Innovative models which combine technology, analytics, and care networks to drive value-based care programs. Within these model Payers are partnering with -

1.    Physician enablement platforms like Agilon Health and Pearl Health 
2.    Care networks and population health organizations - Tandigm health, Signify Health etc. 
3.    Pharmacy administration – Evio, CarelonRx etc. 

Risk-bearing specialty groups – Fast evolving model where specialists are delivering care on the value-based care framework for chronic conditions with high cost of care. Several organizations are successfully driving programs to reduce cost and improve care.

• Nephrology - Panoramic Health, Cricket Health
• Oncology - Oncology Care partners
• Cardiology – CardioOne, Story Health
• Orthopedics - Healthcare Outcomes Performance Company (HOPCo)
• Endocrinology/ Diabetes – Valendo Health

Specialized VBC models offer several advantages:

• Deeper risk pool segmentation - Enables finer-grained segmentation based on specific diseases or conditions, allowing for more precise risk adjustment and tailored interventions.
• Improved patient outcomes - Specialists bring deep expertise in a specific condition/disease allowing for the development of highly specialized care protocols and treatment pathways.
• Enhanced care co-ordination - Specialty VBC models involve closely knit networks of specialized providers, facilitating efficient communication and collaboration, reducing care gaps, and improving patient experience.

Despite the advantages, the VBC "fit" and approach of these models may vary by specialty. Models focused on conditions with standardized and time-bound interventions (e.g., orthopaedics, cardiology, OB/GYN maternal care) may see faster and more sustainable growth compared to chronic or indeterminate-length conditions (e.g., oncology, nephrology).

Navigating the specialty VBC landscape

While promising, specialty VBC models present challenges. Rise of speciality groups will create a very complex multi-player eco-system including Payers, Providers, Other Risk bearing entities etc. This necessitates intense focus on Interoperability while building robust integrations and interfaces for seamless data exchange and collaboration.

Accurately attributing the patients and associated financials under specialized models can be complex, especially for population with multi-morbidities and may require care within variety of models. Advanced analytics tools and ML models are inevitable to enable more sophisticated risks stratification & transparent attribution methods.

Addition of speciality groups in the VBC mix is only going to reduce the size of “pie” to share in VBC landscape and lead to razor thin margins. To maintain profitability in this competitive landscape, organizations must prioritize operational excellence. Automation and generative AI can potentially streamline processes, reduce costs, and enhance efficiency.